NAEEMAKHTAR FANIBAND,BELAGAVI vs. ASSESSMENT UNIT, INCOME TAX DEPARTMEWNT, DELHI

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ITA 271/PAN/2024Status: DisposedITAT Panaji05 March 2025AY 2015-16Bench: SHRI PAVAN KUMAR GADALE (Judicial Member), SHRI G D PADMAHSHALI (Accountant Member)5 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the CIT(A) passed the order due to the assessee's lack of proper compliance despite adequate opportunities and notices. The assessee also failed to participate in the assessment proceedings. The CIT(A) rejected additional evidence for non-compliance with Rule 46A(1). While acknowledging the assessee's procedural lapses, the Tribunal, considering the principles of natural justice, decided to provide one more opportunity. The assessee is directed to pay a cost of Rs. 2,000/- to the Income Tax Department within one month and produce proof of payment. The order of the CIT(A) is set aside, and the disputed issues are remitted to the CIT(A) for fresh adjudication on merits, with an adequate opportunity of hearing to the assessee, who must cooperate. The grounds of appeal are allowed for statistical purposes.

What were the facts?

The assessee, Naeemakhtar Faniband, filed an appeal against the order of the NFAC/CIT(A) for Assessment Year 2015-16. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 as the assessee had not filed a return of income. Information indicated a difference between the property's market value and the sale consideration. Despite notices under Sections 148, 143(2), and 142(1), the assessee failed to comply. Consequently, the AO made additions under Sections 69A (Rs. 3,45,41,777), 56(2)(vii)(b) (Rs. 1,22,20,000), and 69 (Rs. 1,42,00,000), assessing total income at Rs. 6,09,61,777 under Section 147 r.w.s. 144. The CIT(A) dismissed the assessee's appeal, rejecting additional evidence due to non-compliance with Rule 46A(1). The assessee appealed to the ITAT.

What were the issues?

1. Whether the CIT(A) erred in confirming the Assessing Officer's action by overlooking information during assessment proceedings, and in rejecting additional evidence filed in appellate proceedings? (Question of law and fact, concerning assessment and appellate procedures). Assessee's contentions: The CIT(A) erred in confirming the AO's action and rejecting additional evidence. The assessee claimed a good case on merits and sought an opportunity to substantiate with material evidence before lower authorities. Revenue's contentions: The Ld. DR supported the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 250,Section 148,Section 143(2),Section 142(1),Section 69A,Section 56(2)(vii)(b),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI BENCH

Before: SHRI PAVAN KUMAR GADALE & SHRI G D PADMAHSHALI

Hearing: 03.03.2025

सुनवाई क� तार�ख/Date of Hearing 03.03.2025 घोषणा क� तार�ख/Date of Pronouncement 05.03.2025 ORDER

PER PAVAN KUMAR GADALE, JM:

1.

The appeal is filed by the assesse against the order of NFAC/CIT(A) passed u/sec 144 r.w.s147 and u/sec 250 of the Act. The assesse has raised the grounds of appeal

challenging the order of the CIT(A) sustaining the additions made by the Assessing Officer.

2. The Brief facts of the case are that, the assessee has not filed the return of income for the A.Y.2015-16. The Assessing Officer (AO) based on the information found that the assesse has purchased the property and there is Naeemakhtar Faniband.. difference in the market value as per sub registrar Belgavi and sale consideration mentioned in the sale deed. Hence the A.O has reason to believe that the income has escaped the assessment and has issued notice u/sec148 of the Act and there was no response. Further the A.O has issued notice u/sec 143(2) and u/sec 142(1) of the Act and the explanations were called to substantiate the sources of investment and cash deposits in the bank account and there was no compliance. Since, no explanations/details were filed, the AO considering the information available on record has invoked the provisions of Sec. 144 of the Act and made addition (i) under section 69A of the Act of Rs.3,45,41,777/-(ii) under section 56(2)(vii)(b) of the Act of Rs.1,22,20,000/- and (iii) unexplained investment u/sec69 of the Act of Rs.1,42,00,000/- and assessed the total income of Rs.6,09,61,777/- and passed the order u/sec147 r.w.s 144 of the Act dated 25.04.2023.

3.

Aggrieved by the order, the assesse has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no proper compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has rejected the additional evidences as the assessee has not fallowed the provisions of Rule 46A(1) of the Income Tax rules 1962 and the CIT(A) has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order

4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings and the CIT(A) has erred in rejecting the additional evidence filed in the appellate proceedings. Further the assesse has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Per Contra, the Ld.DR supported the order of the CIT(A).

5.

We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no proper compliance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) observed that in the assessment proceedings also, the assessee has not participated in spite of providing sufficient opportunities and A.O has passed the asseement order u/sec147 r.w.s 144 of the Act and also the assesse has not complied the provisions of Rule 46A(1) of the Income Tax rules 1962 and has rejected the additional evidence and dismissed the appeal. Whereas the assessee has raised grounds of appeal challenging the additions by the A.O and there could be various reasons for not explaining the sufficient reasons in filling the new evidences before the CIT(A) and the assesse has ignored Naeemakhtar Faniband.. the procedures which cannot be overruled. Therefore, considering the facts and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information subject to payment of cost of Rs.2,000/- to the Income Tax Department within one month from the date of receipt of the order and produce the proof of payment. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assesse should be provided adequate opportunity of hearing and shall cooperate in submitting the information. And we allow the grounds of appeal of the assessee for statistical purposes.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 05.03.2025.

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