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Facts
The assessee appealed against an order of the Ld. CIT(A) for assessment year 2015-16. The assessee raised grounds that the CIT(A) passed a non-speaking order without issuing a valid notice of hearing and that the additions made under section 69 of the Income Tax Act, 1961, for unexplained investment and cash deposits were upheld without proper inquiry or opportunity of being heard.
Held
The Tribunal noted that the Ld. CIT(A)'s order did not reference any notice of hearing issued to the assessee. It was held that the Ld. CIT(A) is required by law to fix an appeal for hearing, issue notice, and pass a speaking order after hearing the assessee. Since this procedure was not followed, the order was set aside.
Key Issues
Whether the Ld. CIT(A) erred in passing a non-speaking order without issuing a valid notice of hearing and providing an opportunity to be heard to the assessee.
Sections Cited
69, 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SUNIL KUMAR SINGH
This appeal has been preferred by the assessee against order dated 03.04.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds:
Jatin Narendra Joshi 2 ITA No. 2245/MUM/2024
1. On the facts, and in circumstances of the case, and in 1. On the facts, and in circumstances of the case, and in 1. On the facts, and in circumstances of the case, and in law, the learned Commissioner of Inc law, the learned Commissioner of Income-tax (Appeal), tax (Appeal), NFAC erred in passing the order non speaking order NFAC erred in passing the order non speaking order NFAC erred in passing the order non speaking order without issuing valid notice of hearing. without issuing valid notice of hearing.
2. On the facts, and in circumstances of the case, and in 2. On the facts, and in circumstances of the case, and in 2. On the facts, and in circumstances of the case, and in law, the learned Commissioner of Income law, the learned Commissioner of Income-tax (Appeal), tax (Appeal), NFAC erred in upholding the action NFAC erred in upholding the action of the assessing officer of the assessing officer in making an addition of RS. 9,926,707 invoking section 69 in making an addition of RS. 9,926,707 invoking section 69 in making an addition of RS. 9,926,707 invoking section 69 of the Income Tax Act, 1961 alleging unexplained of the Income Tax Act, 1961 alleging unexplained of the Income Tax Act, 1961 alleging unexplained investment thereby treating that, the source of these funds investment thereby treating that, the source of these funds investment thereby treating that, the source of these funds for purchase of properties was not proved and not for purchase of properties was not proved and not for purchase of properties was not proved and not submitted, w submitted, without making any appropriate inquiry and, ithout making any appropriate inquiry and, without providing the opportunity of being heard. without providing the opportunity of being heard. 3. On the facts, and in circumstances of the case, and in 3. On the facts, and in circumstances of the case, and in 3. On the facts, and in circumstances of the case, and in law, the learned Commissioner of Income law, the learned Commissioner of Income-tax (Appeal, NFAC tax (Appeal, NFAC erred in upholding the action of the Assessing erred in upholding the action of the Assessing erred in upholding the action of the Assessing Officer in making an addition of RS. 1,000,000 under section 69 of making an addition of RS. 1,000,000 under section 69 of making an addition of RS. 1,000,000 under section 69 of the Income Tax Act, 1961 alleging that the source of these the Income Tax Act, 1961 alleging that the source of these the Income Tax Act, 1961 alleging that the source of these funds for deposits in bank account was not proved without funds for deposits in bank account was not proved without funds for deposits in bank account was not proved without making any appropriate inquiry and without providing the making any appropriate inquiry and without providing the making any appropriate inquiry and without providing the opportunity of opportunity of being heard. 2. At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has passed the impugned order without providing the Ld. CIT(A) has passed the impugned order without providing the Ld. CIT(A) has passed the impugned order without providing any opportunity of being heard to the assessee and therefore, order any opportunity of being heard to the assessee and therefore, order any opportunity of being heard to the assessee and therefore, order of the Ld. CIT(A) might might be set aside and matter might might be restored back to him for passing of the order after providing adequate back to him for passing of the order after providing adequate back to him for passing of the order after providing adequate opportunity of being heard of being heard to the assessee.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. The entire relevant material on record. The entire text of the order passed of the order passed by the Ld. CIT(A) is reproduced as under: the Ld. CIT(A) is reproduced as under:
Jatin Narendra Joshi 3 ITA No. 2245/MUM/2024 “This appeal is filed against the order of ITO, Ward 17(2)(1) “This appeal is filed against the order of ITO, Ward 17(2)(1) “This appeal is filed against the order of ITO, Ward 17(2)(1) Mumbai passed u/s 143(3) of the IT Act, 1961 dated Mumbai passed u/s 143(3) of the IT Act, 1961 dated Mumbai passed u/s 143(3) of the IT Act, 1961 dated 30.12.2017. 30.12.2017.
1. In ground no.1, assessee objects to addition of Rs.
1. In ground no.1, assessee objects to addition of Rs.
In ground no.1, assessee objects to addition of Rs. 9926707 u/s 69 as unexplained in 9926707 u/s 69 as unexplained investment being the vestment being the amount invested for purchase of flats. The assessee could amount invested for purchase of flats. The assessee could amount invested for purchase of flats. The assessee could not explain the source of investment except furnishing the not explain the source of investment except furnishing the not explain the source of investment except furnishing the bank statement showing the payment. bank statement showing the payment. The AO did not have The AO did not have any other option but to treat it as unexplained investment any other option but to treat it as unexplained investment any other option but to treat it as unexplained investment u/s 69. The action of the AO is justified. The ground on this 9. The action of the AO is justified. The ground on this 9. The action of the AO is justified. The ground on this issue is dismissed. issue is dismissed.
In ground no.2, the assessee objects to addition of 2. In ground no.2, the assessee objects to addition of 2. In ground no.2, the assessee objects to addition of 1000000 u/s 69 being unexplained cash deposit in his 1000000 u/s 69 being unexplained cash deposit in his 1000000 u/s 69 being unexplained cash deposit in his bank account. The assessee's explanation that these cash bank account. The assessee's explanation that these cash bank account. The assessee's explanation that these cash deposits are deposits are loan received from friends was rightly rejected loan received from friends was rightly rejected by the AO for not producing the address of the person and by the AO for not producing the address of the person and by the AO for not producing the address of the person and confirmation letters. confirmation letters. The assessment of cash deposit u/s69 cash deposit u/s69 is confirmed. is confirmed. The ground on this issue is dismissed. issue is dismissed.
3. The ground no.3 is general in natur 3. The ground no.3 is general in nature and does not require e and does not require any separate adjudication. any separate adjudication. The appeal filed by the assessee is dismissed.” The appeal filed by the assessee is dismissed.” 3.1 We find that there is no reference We find that there is no reference of any notice issued by the notice issued by the Ld. CIT(A) in the impugned order. Under the provisions of section Ld. CIT(A) in the impugned order. Under the provisions of section Ld. CIT(A) in the impugned order. Under the provisions of section 250 of the Income-tax tax Act, 1961 (in short ‘the Act’), the Ld. CIT(A) is Act, 1961 (in short ‘the Act’), the Ld. CIT(A) is required to fix the appeal for hearing and then issue notice to the required to fix the appeal for hearing and then issue notice to the required to fix the appeal for hearing and then issue notice to the assessee and after hearing assessee and after hearing, he is required to pass a speaking order is required to pass a speaking order on the issue in dispute involved. on the issue in dispute involved.
3.2 On perusal of the above order, On perusal of the above order, it is evident that no notice has it is evident that no notice has been issued by the Ld. CIT(A) before disposing off the appeal and been issued by the Ld. CIT(A) before disposing off the appeal and been issued by the Ld. CIT(A) before disposing off the appeal and therefore, the impugned order passed by therefore, the impugned order passed by ld CIT(A) is ld CIT(A) is against the provisions of the law provisions of the law , therefore, same is set aside and matter is same is set aside and matter is Jatin Narendra Joshi 4 ITA No. 2245/MUM/2024 restored back to him him for deciding afresh after following due deciding afresh after following due procedure of law. The grounds raised by the assessee are procedure of law. The grounds raised by the assessee are procedure of law. The grounds raised by the assessee are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Cour Order pronounced in the open Court on 31/07/2024. /07/2024.