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Facts
The assessee filed a return of income which was processed. Later, the AO issued a notice under section 148, and the assessee declared a higher income representing their share in a land purchase. However, the source of investment was not corroborated. The AO completed the assessment by adding the investment amount to the total income.
Held
The Income Tax Appellate Tribunal held that the CIT(A) confirmed the addition made by the AO without giving the assessee an adequate opportunity of being heard. The tribunal set aside the order of the CIT(A) to meet the principle of natural justice.
Key Issues
Whether the CIT(A) erred in confirming the addition made by the AO without providing an adequate opportunity of hearing to the assessee.
Sections Cited
143(1), 148, 143(2), 142(1), 147, 144B
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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: S/SHRI DUVVURU RL REDDY(KZ) & RAJESH KUMAR
O R D E R Per Bench The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NAFC), New Delhi NFAC), Delhi dated 07/03/2025 in Appeal No.NFAC/2017-18/10085214 passed for Assessment Year 2018-19.
Brief facts of the case are that the assessee is an individual and filed his return of income on 28.8.2018 declaring total income of Rs.5,79,620/-, which was processed u/s.143(1) of the Act. During the course of P a g e 1 | 4 Assessment Year : 2018-19 assessment proceedings, the Assessing Officer noticed that the assessee had purchased land for consideration of Rs.2,13,90,000/- on 15.12.2017. However, the assessee had reported his total income at Rs.579,620/-. Therefore, the AO issued notice u/s.148 of the Act dated 31.3.2020 to the assessee. In response to notice u/s.148 of the Act, the assessee filed return of income on 30.6.2020 showing income at Rs.5,79,620/-. Subsequently notices u/s.143(2) and 142(1) were issued to the assessee, to which, the assessee has responded stating that the assessee’s share in the land purchased is Rs.71,02,440/-, which was accepted by the Assessing Officer. As the source of making such investment in the land was not corroborated with documents, the Assessing officer completed the assessment year 147 r.w.s 144B of the Act adding Rs.71,02,440/- to the total income of the assessee. Aggrieved, the assessee carried the matter in appeal before the ld CIT(A)..
The assessee did not respond to various notices issued by the ld CIT(A) as is evident from the order at page 5 . Considering the non- compliance, the ld CIT(A) confirmed the addition made by the Assessing Officer.
At the time of hearing, ld. Counsel for the assessee stated that the ld CIT(A) has dismissed the appeal without giving adequate opportunity of hearing to the assessee. He prayed before the Bench that the impugned
P a g e 2 | 4 Assessment Year : 2018-19 order be set aside and remitted back to the file of ld. CIT(Appeals) for deciding it afresh.
On the other hand, ld Sr DR supported the orders of the lower authorities.
We have heard the rival contentions and perused the material available on record. A perusal of the impugned order clearly shows that as there was no response to the notices to substantiate the claim with documentary evidences and submissions, ld CIT(A) confirmed the addition made by the AO. Before us, ld AR undertakes that the assessee will cooperate the proceedings, if the matter is restored back to the file of the Assessing Officer as the assessment has been made u/s.147/144 of the Act. Considering the facts and circumstances of the case, we are inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of the Assessing Officer with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the AO, failing which the AO shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes
P a g e 3 | 4 Assessment Year : 2018-19
In the result, appeal of the assessee stands allowed for statistical purposes.
Order dictated and pronounced in the open court on 2/7/2025.
Sd/- Sd/- (RAJESH KUMAR) (DUVVURU RL REDDY) Accountant Member VICE PRESIDENT Cuttack: Dated 02 /07/2025 B.K.Parida, Sr. PS (OS) Copy of the Order forwarded to : 1. The Appellant : Sanjib Kumar Mohapatra Gandhi Mandir Road, Gandhi Mandir Road, Dhenkanal, 759001 2. The Respondent : ITO, Dhenkanal Ward, Dhenkanal 3. The CIT(A)-, 4. Pr.CIT- 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order