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Facts
The assessee's return for AY 2012-13 was processed u/s 143(1). Reassessment proceedings u/s 144 r.w.s. 147 were initiated based on information regarding unexplained investment in property, STCG, and cash deposits, leading to an ex-parte assessment. The CIT(A) dismissed the assessee's appeal ex-parte, despite multiple opportunities, due to alleged improper service of notices, as the communication details belonged to her ex-husband. The assessee claimed unawareness of financial dealings managed by her ex-husband and sought another opportunity for hearing.
Held
The Tribunal observed that notices were sent to the ex-husband's email and contact details, resulting in improper communication and non-compliance by the assessee. Upholding the principles of Natural Justice, the Tribunal set aside the ex-parte appellate order. The case is remanded back to the CIT(A) for a fresh hearing, granting the assessee a final opportunity to present her case on merits.
Key Issues
Whether the ex-parte assessment and appellate orders are valid given the alleged improper service of notices and violation of natural justice. Whether the additions for unexplained investment, STCG, and cash deposits are justified, and the validity of reopening the assessment.
Sections Cited
Section 144, Section 147, Section 143(1), Section 132(4), Section 250
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar
Date of hearing : 15-01-2026 Date of pronouncement : 16-01-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the exparte appellate order dated 25-09-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte reassessment order passed under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2012-13.
Brief facts of the case is that the assessee is an individual filed her Return of Income for the Asst. Year 2012-13 on 05-03-2013 declaring total income of Rs. 3,00,000/- under the head salary. The return was processed u/s. 143(1) of the Act on 14-06-2013. Information received from ACIT, Central Circle-2(4), Ahmedabad pursuant to a search conducted at J P Iscon Groups on 25-02- 20216 wherein assessee said to have purchased H-304 Flat by paying on-money Rs. 61,53,500/-which was recorded in the statement of Shri Manish Kalindi S. Shah, Sales Manager of J P Iscon Pvt. Ltd. u/s. 132(4) of the Act. Therefore notice u/s. 148 was issued on 31-03-2019 to the assessee by Speed Post. The assessee did not replied to the notices, which has resulted in passing exparte assessment order by making following addition: Unexplained investment in property of Rs.77,08,500 STCG from sale of property Rs. 35,50,000 Unexplained cash deposit in bank Rs. 6,20,500 and determining the total income as Rs.1,21,79,000/- and demanding tax thereon.
Aggrieved against the reassessment order, assessee filed an appeal before Ld. CIT(A) which was also dismissed after giving 15 opportunities of hearing.
Aggrieved against the exparte appellate order, the assessee is in appeal before us raising the following Grounds of Appeal: “1.1 The order passed u/s.250 on 25.09.2025 for A.Y.2012-13 by NFAC CIT(A), Delhi (for short "CIT(A)" by upholding the additions aggregating to Rs. 1, 18,79,000/- is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in making ex parte disposal of the appeal when there was a sufficient cause for alleged A.Y. 2012-13 Page No 3. Annie Hemendrakumar Khatri vs. ITO
non-compliance to the notices of hearing so that the appellate order is liable to be struck down. 2.2 That in the facts and circumstances of the case as well as in law, there was no valid, proper & legal service of e-notices, communication etc., so that there could not be any compliance to the same. Thus, there was gross violation of the principles of natural justice. 2.3 The Ld. CIT(A) has grievously erred in law and or on facts in not appreciating that there could not be any compliance to the notices of hearing issued by FAO for the reasons stated in detail in the statement of facts so that there was gross violation of principles of natural justice. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding the additions aggregating to Rs. 1,18,79,000/- as under: a) Unexplained investment in property Rs. 77,08,500/- b) STCG on sale of property Rs. 35,50,000/- c) Unexplained cash deposit in bank Rs. 6,20,500/- 3.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously erred in upholding additions aggregating to Rs.1,18,79,000/- as detailed above. 4.1 Without prejudice to above and in the alternative, the CIT(A) has failed to appreciate that the appellant did not own Flat No. 304 of Tower-H at ISCON Platinum nor had she made cash payment of Rs. 61,53,500/- 4.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously failed to appreciate that the appellant had not made any cash payment of Rs. 61,53,500/- and the booking of the said flat was already cancelled by her ex-husband. The appellant was not supplied any material relating to the alleged said cash payment. 5.1 Without prejudice to above and in the alternative, the CIT(A) has failed to appreciate that the entire sale consideration of Rs. 71 lakhs (Rs. 35 lakhs towards appellants alleged ½ share) so that the addition of Rs. 35,50,000/- was illegal and unwarranted. It is therefore, prayed that the impugned appellate order should be quashed or in the alternative the additions aggregating to Rs. 1,18,79,000/-made by the FAO should be deleted.
Ld. Counsel for the assessee submitted that the assessee got married in 2001 and mutual consent diverse from her husband by decree passed on 05-01-2022. The entire financial matters and other transactions, investments etc. were managed by her ex-husband, A.Y. 2012-13 Page No 4 Annie Hemendrakumar Khatri vs. ITO hence she was not aware of both the financial dealings and investments made in her name. This has resulted in passing exparte assessment order and appellate order before the authorities. On 07- 01-2025, a letter dated 30-10-2025 from the Income Tax Department was received by the neighborhood of the assessee, which is outstanding demand and recovery notice in her name. On verification of the same, she came to know about the exparte appellate order passed by the department. Immediate thereafter, she filed the present appeal before this Tribunal and request one more opportunity of hearing be given to the assessee to argue her case. The assessee also raised the additional Ground of Appeal, which goes to root of the matter of validity of reopening of assessment. Thus Ld. Counsel pleaded one more opportunity be given to the assessee.
7. Ld. S.R. D.R. appearing for the Revenue submitted considering the peculiarity of the case, the exparte order be set-aside back to the file of Ld. CIT(A) by giving one more opportunity of hearing to the assessee.
We have heard rival submissions and perused the materials available on record. It is seen from Form No. 35, the email id – “hemendrak936@gmail.com” was given, with Mobile Number and postal address which belongs to her ex-husband. Though 15 opportunities of hearing be given by Ld. CIT(A), the assessee is not communicated the same, which has resulted in passing exparte appellate order. The assessee also claims that Unit No. H/304 at Iscon Platinum is not in her name and bank statement with ICICI Bank has no transaction in the relevant period, which the assessee need to place on record before the First Appellate Authority (a paper book running to 64 pages placed on record), also would look to raise the A.Y. 2012-13 Page No 5 Annie Hemendrakumar Khatri vs. ITO jurisdiction of reopening of assessment. Therefore in the interest of Principle of Natural Justice, we deem it fit to set-aside the exparte appellate order passed by Ld. CIT(A) with a direction to grant one more opportunity of hearing to the present address namely M-1404 Maher Homes-4 VIP Road, Shela, Ahmedabad, Gujarat - 380058, Mobile No. 9824696486/9228226177 and Email Address anniekhatri81@gmail.com of the assessee and decide the appeal on merits and in accordance with the provisions of law. Needless to say, the assessee should make use of this final opportunity and file all relevant documents pertaining to the transaction for passing order on merits.
In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose.
Order pronounced in the open court on 16 -01-2026