Loading judgment…
Facts
The assessee purchased an immovable property for Rs. 96,00,000/- whose market value was Rs. 3,71,25,000/-. The Assessing Officer (AO) made an addition of Rs. 3,71,25,000/- under section 69B for unexplained investment, treating the assessee as a non-filer. The assessee did not respond to notices issued by the AO and the CIT(A).
Held
The Tribunal noted that while the assessee received the assessment and impugned orders, they did not receive notices under sections 148, 142(1), and show cause notices. The Tribunal found a contradiction in this claim. Despite the lack of compliance, the Tribunal decided to set aside the impugned order and remand the case back to the AO for a de novo assessment, considering the principles of natural justice.
Key Issues
Whether the assessment order and subsequent appellate order were passed in violation of principles of natural justice due to non-receipt of notices by the assessee, and whether the addition under section 69B was justified.
Sections Cited
253 of the Income Tax Act, 1961, 147 of the Income Tax Act, 1961, 148 of the Income Tax Act, 1961, 69B of the Income Tax Act, 1961, 246A of the Income Tax Act, 1961, 142(1) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
second Appeal. The Assessee is aggrieved by the order bearing Number:-ITBA/NFAC/S/250/2024-25/1072170272 (1) dated 15.01.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year is 2014-15 and the Page 1 of 10
Factual Matrix 2.1 That as and by way of an “assessment order” made u/s 147 r.w.s 144 of the Act, total income of the assessee was computed and assessed at Rs.3,71,25,000/-. The assessee was a non filer. Accordingly after recording the reason u/s 147 of the Act, a notice u/s 148 of the ct was issued on 16.07.2022. In response to the said notice, no reply was received from the assessee. The NEFAC on 21.11.2022 to JAO had communicated that against the assessee PAN is not registered on e-filing portal/no mail ID account available.
The case transferred out to the JAO. There was no compliances to notices u/s 142(1) of the Act by the assesee.
No compliance to show cause notice too by the assessee. The assessee had purchased immovable property of Rs.96,00,000/- whose market value was of Rs.3,71,25,000/-. Therefore, income was computed & assessed at Rs.3,71,25000/- u/s 69B of the Act. It was a Page 2 of 10 A.Y.2014-15 case of unexplained investment u/s 69B of the Act despite opportunities afforded to the assesee. That the aforesaid assessment order bears No.ITBA/AST/S/147/2023- 24/1053276606(1) & that the same is dated 29.05.2023 which is hereinafter referred to as the “Impugned Assessment Order”.
2.2 That the assessee being aggrieved by the aforesaid “Impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core ground & reasons for the dismissal of the first appeal was as under:
“3. Observations, Finding and Decision: 3.1 I have perused the assessment order and other relevant records. The assessment order was passed u/s 147 of the Income-tax Act, 1961, against which the appellant preferred an appeal before the undersigned. 3.2 During the appellate proceedings, the appellant was granted many opportunities for presenting his case and filing detailed submission in support of various grounds of appeal taken by him. However, on none of the occasions, the appellant chose to file a submission or filed any documents nor request for adjournments. It may be noted that in the faceless appeal environment, all the notices are issued to the appellant at the email address provided by him, and also, all the submission are supposed to be filed
Page 3 of 10 A.Y.2014-15 online through the appeal module available to the appellant online in his e-filing portal. In this electronic communication environment, the emails/notices/letters are routed through the NFAC, and the appellant is expected to respond through the same environment.
3.3 Having noted thus, it is a fact that the appellant chose not to submit anything in response to various notices issued to him thereby giving him ample opportunity of hearing, which is also in accordance to principle of natural justice. The table below list the various dates of issuing of notices, dates of hearing/submission granted to the appellant and the response of the appellant: S.NO. Date of Date of hearing Reasons offered fixing/notice by appellant 1 04.11.2024 19.11.2024 No compliance
2 20.12.2024 27.12.2024 No compliance
3 03.01.2025 10.01.2025 No compliance
3.4 It is very clear form the above table that the appellant has chosen not to submit anything in support of his various grounds of appeal. In such a scenario, I am of the considered opinion that the appellant does not have anything to say or have anything to offer to the appellate authority in support of his various grounds of appeal, and thus, that the appellant does not want to press any of the grounds of appeal. In light of this, I do not see any reason to interfere with the findings of the AO as enumerated in the assessment order. 3.5 I, therefore, dismiss all the grounds of appeal filed by the assessee.”
2.4 The assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised the following grounds of appeal in the Form No. 36 against the “Impugned Order” which are as under:-
“1.That having regard to facts and circumstances Ld. AO has erred in law and on facts in making addition and Ld. CIT (A) has Page 4 of 10 A.Y.2014-15 erred in confirming addition amounting to Rs. 3,71,25,000 by alleging purchase consideration paid for acquiring immovable property remains unexplained and added as unexplained investment U/s 69B of Income Tax Act, 1961 by recording incorrect facts and findings in an ex-parte and arbitrary manner. 2.That on the facts and in the circumstances of thecase Ld. AO has erred in passing and Ld. CIT (A) has erred in confirming the impugned order without affording any opportunity of being heard against the principles of natural justice in an ex-parte and arbitrary manner. Moreover, Ld. CIT (A) has failed to dispose the legal grounds raised in appeal. 3.That the impugned re-assessment order SO passed is illegal and wrong as the same is passed without complying the conditions envisaged in section 147, 148, 148A to 151 of Act. 4.That the assessee craves leave to add, amend, alter or delete any of the grounds of appeal and all the above grounds are without prejudice to each other.”
3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 29.01.2026 when the Ld. AR for & on behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside by this tribunal in exercise of its appellate power conferred under the Act. It was submitted by the Ld. AR that the notice u/s 148 was not received by the assessee. Even other notices, including show cause notice was not received by the assessee. The assessee was a non
Page 5 of 10 A.Y.2014-15 filer. At this stage it was queried by the bench whether the assessee as a firm is mandatory required to file the ROI? The Ld. AR did not reply to the quarry of the Bench. The ld. AR also stated that no compliance(s) were made before the Ld.
CIT(A) too. The Ld. AR however then submitted that the assessee has a substantial ground on legality & merit. The assessee wants to make effective representation before the Ld. AO if an opportunity is allowed.
3.2 Per contra Ld. DR appearing for & on behalf of the revenue submitted that most surprising aspect of this case in hand is whereas “impugned Assessment order” is received by the assessee but none of the notice(s) u/s 148, 142(1) & show cause notice is not received nor any reply is on record. There is thus serious contradiction. The appeal as
per form no.35 was filed on 29.06.2023 & impugned order is dated 15.01.2025 which means assessee did not file any submission for nearly one & half year. The ld. CIT(A) in para 3.3 of the “Impugned Order” has give more than required opportunities & no effective & plausible explanation for noncompliance before the Ld. CIT(A) is given. There is no
1. DR finally submitted that there are no infirmities on the orders of both the lower authorities & if this tribunal is inclined to remand the matter to the file of the Ld. AO then heavy cost be imposed on the assessee. The hearing was then concluded.
Observations Findings & conclusions 4.1 We have to decide the legality, validity and proprietary of the “impugned order” basis records of the case & the rival submission canvassed before us.
4.2 We have carefully perused the records of the case and have heard the submissions.
1. 4.3 We basis records of the case & after hearing & further upon examining the contentions of the Ld. AR and Ld. DR are of the considered opinion that the “Impugned assessment Order” & “Impugned Order” of lower authorities i.e the Ld. AO & the Ld. CIT(A) are not on merits
1. Page 7 of 10 & Impugned Order” are received by the assessee, the notice(s) u/s 142(1), 148, show cause notice(s), 250 notice(s) are all not received. No explanation for such contradictions have come forth. The plea of the assessee having good case on legality & merits is difficult to digest perse as there is no material on record of this Tribunal. While we are inclined with the view expressed by the Ld. DR that let the matter be remanded to the Ld. AO with heavy cost but cost is not a solution save & except a deterrent measure to the assessee concerned. We are of the considered view that while assessee is prompt in filling the first appeal & second appeal they are not appearing before the Ld. AO & Ld. CIT(A) in majority of the cases which are coming to us which trend is not good & not in good taste. We want compliant assessee’s. While the assessee asserts their rights on several scores like legality, breaches of natural justice but once it comes to their duties they run away meaning thereby that they remain non- compilant either wholly or one one pretext or other. This Page 8 of 10 A.Y.2014-15 is a growing trend & is posing serious danger to the whole system of “Assessment of income” which we the people of India have enacted for ourself only.
1. 4.4 In view of the premises drawn up by us, we very reluctantly set aside the “Impugned Order” and remand back the case to the file of the Ld. AO on denovo basis.
Needless to state the assessee to attend hearing as & when fixed & to file reply with details as sought by the Ld. AO. The assessee’s cooperation is of utmost importance in tax administration which the assesee should understand. If the assessee fails in its obligation towards tax administration the nation would fail too. Taxes according to law is required to be paid for nation to run, otherwise nation would fail. In these peculiar facts & circumstances we impose a cost of Rs.10,000/- on the assessee which shall be paid through a challan under the category other’s with no benefits of any type accruing to assessee in any manner whatsoever. The amount of cost to Page 9 of 10
5 Order 5.1 In the result the impugned order is set aside as & by way of remand back to the file of the Ld. AO.
5.2 In the result, the Appeal of the assessee is allowed for statistical purpose.
Pronounced in open court on 19 .02.2026.