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Facts
The appeal was filed by the assessee against an order for Assessment Year 2013-14, which arose from an order by the Assessing Officer (AO) under sections 147 and 144 of the Income Tax Act, 1961, concerning unexplained investment. The AO made an addition of Rs. 49,71,000/- under section 69 of the Act for the purchase of immovable property.
Held
The Tribunal noted that the assessee had failed to comply with notices issued by the lower authorities and did not attend hearings. However, considering the assessee's submission that they were not informed about the hearing, the Tribunal set aside the order of the lower authority.
Key Issues
Whether the addition for unexplained investment was justified, and whether the assessee should be given another opportunity to present their case before the lower authority.
Sections Cited
147, 144, 69, 139(1), 148A, 142(1), 69A
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI, AM. &
आदेश / O R D E R
PER DINESH MOHAN SINHA JM;
Captioned appeal filed by assessee pertaining to Assessment Year 2013- 14, is directed against order passed by Commissioner Of Income Tax (Appeal), vide order dated 19/08/2024, which in turn arises out of an order passed by the Assessing Officer dated 25/02/2024 u/s 147 r.w.s. 144 of the Income Tax Act, 1961. Page | 1
GROUNDS OF APPEALS:-
The order passed by the Ld. CIT (A) is against law, equity & justice.
The Ld. CIT(A) has erred in law and on facts in upholding the validity of reopening of assessment though it is bad and illegal as the case has been reopened on incorrect facts.
3. The Ld CIT(A) has erred in law and on facts in upholding the validity of assessment order passed by the Ld. A.O. though it is void & illegal as the order has been passed without providing materials on which reliance has been placed for reopening of assessment.
4. The Ld. CIT(A) has erred in law and on facts in upholding addition made by the Ld. A.O. by making addition for purchase of immovable property of Rs. 49,71,000/- U/S 69 of the Act.
5. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.
Facts Of The Case as recorded by The Ld CIT(A)
"Appellant is an individual and has filed her return of income for the captioned assessment year under PAN AGTPT1603P on 16.09.2019. Notice U/S 148A(b) was issued by the Income Tax officer, Ward-2, Surendranagar (here in after referred as JAO) on14.03.2023. An order U/S 148A (d) was passed by the JAO stating PAN BMFPT2701K
Notice U/S 148 of the Act was issued by the JAO on 22.11.2018. stating PAN BMFPT2710K, Notice U/S 142(1) of the Act was issued by the assessing officer, NEFC (herein after referred as Ld. A.O.) on 24.07.2023
In response to said notice appellant has submitted as under. (1) There was two PAN numbers of appellant (i) PAN AGTPT1603P & (ii) PAN BMFPT2701K. (2) Appellant has made application for cancellation of PAN BMFPT2701K on 22.11.2018. Copy of said application was furnished to the Ld. A.O. during the course of assessment. (3) Appellant and her husband had purchased unit in the scheme of M/s Reeva Corporation. Sale deed was executed on 5.4.2019 for total value of Rs. 25,00,000/-. Share of appellant was 50%. Appellant submits that reopening of assessment is made merely on incorrect fact and any cogent evidence on records. Appellant has purchased said property with her actual PAN AGTPT1603P, with joint ownership of her husband Mr. Kamlesh Thakker (PAN AANPT1296Q) in the ratio of 50%- 50% Purchase deed of the same property was provided to the LD. AO in respective notices's reply. Though appellant has shown correct PAN in purchase deed, reopening of assessment made on PAN cancelled by the appellant.
The Ld. AO has issued notice U/S 142(1) of the Act dated 24.07.2023 and notice U/S 142(1) of the Act dated 05.02.2024 calling for details regarding the matter for purchase of immovable property from M/s Reeva Corporation. Appellant submitted response to the captioned notice submitting the details called for on 07.08.2023 and 10.02.2024 by providing the purchase deed and stated that other details called by the Ld. AO.
Subsequently the Ld. AO has issued SCN dated 14.02.2024 proposing addition to the income of appellant on the basis of unexplained investment during the year U/S 69 of the Act. In response to SCN appellant has filed detailed reply vide letter dated 19.02.2024. Property was purchased at 25,00,000/- as mentioned in purchase deed and other than that appellant has not paid any single rupee in cash to anyone Payment made by the appellant has already mentioned in purchase deed The appellant has filled the ITR in her new PAN AGTPT1603P and has submitted the ITR for the captioned assessment year as asked by the Ld. AO The Ld. AO has passed the Assessment order U/S 147 r.w.s 144 of the Act by making addition as unexplained investment. The Ld.A.O. has passed order U/S 147 r.w.s 144 of the Act dated 25.02.2024 making addition of Rs. 49,71,000/- as U/S 69 of the Act as unexplained investment. For your kind reference, the sections are quoted below. Sec. 69 of the Act read as under Unexplained investments.
Where in the financial year Immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the of the assessee of such financial year.
The appellant has provided the proper explanation regarding the transaction between appellant and M/s Reeva Corporation, and it is not consider as investment of the appellant under this PAN as appellant has applied for cancellation of PAN card before the said transaction. Therefore it is crystal clear that the above section is not attracted in the case of appellant."
3.1. That the Ld AO make an appeal with under observation 1. Income as per return of income filed u/s 139(1) 2,96,580/- 2. Add: Unexplained investment of Rs. 49,71,000/- 49,71,000/- 3. Total income determined as per the above addition 52,67,580/
That the assessee filed an appeal against the order of assessment before Ld CIT(A). That said appeal was disposed of with following observation.
"From the conduct of the appellant, it is inferred that Assessee has nothing to state against the action of the Ld AO and also not willing to pursue the appellate proceedings any more. Therefore, considering the facts and circumstances, the ground raised by the appellant are treated as baseless. Accordingly, the ground Nos 2 to 4 raised by the appellant is hereby dismissed accordingly."
In the result, the appeal of the assessee is hereby dismissed.
That the assessee field an appeal against the impugned order date 15.05.2024 before us.
(i) During the course of hearing the Ld AR has submitted that the assessee could not comply with the direction of the notice issued by Ld Page | 5
CIT(A). That Ld AR further requested that an opportunity to explain the case before the lower Authority may kindly be granted. (ii) On the contrary the Ld DR has relied on the order of the Ld CIT(A) Ld Sr DR has submitted that number of notice was issued to the assessee, due opportunity was provided to the assessee. However Ld DR has not objected the request of the assessee.
We have heard both the representative of the party and perused all the material available on record before us.
We note that before passing the order the Ld CIT(A) had issued notice on 02.04.2024, 19.07.2024, 30.07.2024, 07.08.2024 all the three notice remain uncomplied with and the assessee has not responded. The Ld CIT(A) has observed in the order that no infirmity or illegally was found in the order of Ld AO and confirmed the action of the AO about the unexplained investment u/s 69A of the Act. Besides this the Ld CIT(A) has dismissed the appeal of the assessee stating that assessee is not willing to pursue the appeallate proceedings anymore.
We note that the assessee could not attend the hearing because the consultant of the assessee did not inform about the notice. We are of the view that assessee deserve for an opportunity to comply with the appeal. We are of the view that the request of the Ld AR asking for one opportunity to present the case before the Ld CIT(A) is accepted. We there for set-aside the order of the lower authority and the matter remit back to the file of Ld CIT(A) to adujudicate the matter according to law after giving due opportunity to the assessee to submit his case.
In result the appeal of the assessee allowed for statical purpose.
Order pronounced in the open court on 07 / 03 /2025.