MONALISA PRADHAN,BHUBANESWAR vs. ITO WARD-3(1), BHUBANESWAR

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ITA 184/CTK/2025Status: DisposedITAT Cuttack23 July 2025AY 2016-17Bench: SHRI GEORGE MATHAN (Judicial Member), SHRI RAJESH KUMAR (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that granting only one day to respond to the show-cause notice violated the principles of natural justice. Therefore, the quantum appeal was restored to the AO for re-adjudication.

What were the facts?

The assessee purchased a flat for ₹51,00,000/- and took a loan of ₹40,80,000/-. The AO issued a show-cause notice regarding the balance ₹10,20,000/- and granted only one day for response, subsequently treating it as unexplained money under Section 69A.

What were the issues?

Violation of principles of natural justice due to insufficient time for assessee to respond to show-cause notice regarding unexplained money and consequential penalty.

Which sections of the Income-tax Act were involved?

Section 69A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “CUTTACK” BENCH, CUTTACK

Before: SHRI GEORGE MATHAN, JM & SHRI RAJESH KUMAR, AM

For Appellant: Shri Niranjan panda, AR
For Respondent: Shri Nishanth Rao B, DR
Hearing: 23.07.2025Pronounced: 23.07.2025

O R D E R PER PENCH: These are the appeals filed by the assessee against the order of ld. CIT (A), NFAC, in appeal no. ITBA/NFAC/S/250/2024- 25/1072675235(1) dated 29.01.2025 for A.Y. 2016-17. ITA 184/CTK/2025 is the quantum appeal and IA is the appeal against the penalty levied and confirmed under Section 271(1)(c) of the Income-tax Act, 1961 (the Act).

2.

Shri Niranjan panda represented on behalf the assessee and Shri Nishanth Rao B, represented on behalf of the Revenue.

Learned AR that the assessee is an individual who is a research assistant with the Rice Institute. It was a submission that the assessee had purchased a flat for ₹51,00,000/- and had taken a loan of ₹40,80,000/- from the bank. It was submission that in the

4.

In reply, the learned DR submitted that the assessee became aware of the issue only when the rectification application had been rejected. It was submission that he had no objection if the AO examine the issue.

5.

We have considered the rival submissions. As it is noticed that the AO in the course of NaFAC proceedings, the assessee had been granted only one day's time to respond to the show cause notice issued by the AO. We feel that there has been violation of the principles of natural justice. This being so, in the interest of justice, the issue in this appeal in respect of the amount of ₹10,20,000/- is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity of being heard.

6.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

8.

We are of the view that as the quantum has been restored in quantum appeal and assessment has been restored to the file of the AO, the foundation for the levy of penalty under section 271(1)(c) of the Act, no more survives and consequently, the penalty as levied and confirmed under section 271(1)(c) of the Act, stands deleted.

9.

Liberty is granted to the ld. AO to initiate fresh proceedings under Section 271(1)(c) of the Act, if so require as per law in the set-aside proceedings.

10.

In the result, the appeal in is allowed and ITA 184/CTK/2025 is partly allowed for statistical purposes.

Order pronounced in the open court on 23.07.2025.

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