Loading judgment…
Facts
The assessee, an individual, declared a total income of Rs.17,48,300/- for AY 2016-17. During scrutiny, additions of Rs.1,70,00,000/- as unexplained investment and Rs.68,49,000/- as unexplained cash credit were made, leading to a total income of Rs.2,55,97,300/-. The assessee's appeal before the CIT(A) resulted in an ex-parte order.
Held
The Tribunal noted that the assessee was unable to explain the source of investment and cash credit before the lower authorities. The CIT(A) passed an ex-parte order without considering the merits of the case. The Tribunal found that the assessee was not given a reasonable opportunity to represent the matter.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without giving the assessee a reasonable opportunity to present their case and explain the additions made.
Sections Cited
250, 143(3), 69B, 68, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI PRASHANT MAHARSHI & SHRI ANIKESH BANERJEE
Instant appeal of the Assessee is preferred against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2016-17, date of order 20/11/2023.The impugned order was emanated from the order of the ld. Income-tax Officer, Ward 35(1)(1),Mumbai (in short, ‘the A.O.’) passed under section 143(3)of the Act date of order24/12/2018.
“1. The Learned Commissioner of Income Tax Appeal erred in confirming the Assessment by notice u/s 250 of Income tax Act, 1961 Dated 04/01/2021 For A.Y. 2016/17
The Learned Commissioner of Income Tax Appeal erred In confirming the Addition of Rs. 17000000/- on account of unexplained Investment u/s 69B of Income Tax Act, 1961 And unexplained cash credit 68 of the income tax act,1961
That the Learned Commissioner of Income Tax Appeal erred as Facts And ln Law in Completing Assessment on the Basis of Assumption, Submission and totally Ignored the facts the case.
That the Learned Commissioner of Income Tax Appeal erred in passing the assessment order4 without giving Show cause notice of being heard
That the impugned order in arbitrary, illegal, bad in Law in Violation of Rudimentary Principle of contemporary Produnce
That the appellant craves leaves to add alter any all ground of appeal before or at the time of the hearing of the appeal”
3. Brief facts of the case are that the assessee is an individual and earnedincome from salary and income from Other Sources during impugned assessment year. The assessee filed the return under section 139(1) by declaring total income at Rs.17,48,300/-. The case was selected for scrutiny. During the assessment, it was found that the assessee deposited cash Rs.1,70,00,000/- which was added back U/s 69B as unexplained investment and addition of Rs.68,49,000/- which was added back U/s 68 as unexplained cash credit and total income is worked out to Rs.2,55,97,300/-. The aggrieved assessee filed an appeal before the ld. CIT(A). But Ld.CIT(A) allowed the reasonable opportunity to the 3 Ajay Baburam Gupta assessee for representing the matter before him. But all the notices remaineduncompiled and the order was passed exparte by upholding the assessment order. Being aggrieved on the appeal order, the assessee filed an appeal before us.
4. The Ld.AR Appeared and prayed that the assaessee was unable to explain the source of investment amount of Rs.1,70,00,000/- and amount of Rs.68,49,000/- before any of the authorities below. The appeal order was passed exparte. The Ld.AR prayed for setting aside the matter before the CIT(A) for fresh opportunity before him.
5. The Ld.DR argued and fully relied on the order of the revenue authorities. The Ld.DR invited our attention in appeal order para 3.4.1 which is reproduced as below: - “3.4.1 Even when one looks at the merits of the case, it is seen that the case had been picked up for limited scrutiny due to large cash deposits and transfer of property. The additions in this case were made on account of unexplained cash credits and unexplained investment, due to the cryptic response furnished by the appellant, without explaining the source of investment in the property or properly backing its claim of receipt of the cash from his late father. The appellant has furnished nothing during the appellate proceedings to explain the same despite repeated opportunities, as mentioned earlier, and therefore I see no reason to interfere with the impugned order. The grounds of appeal are, therefore, dismissed in toto.”
6. We heard the rival submissions and considered the documents available in the record. The addition was made U/s 69B amounting to Rs.1,70,00,000/- and U/s 68 amounting to Rs.68,49,000/- for unexplained cash credit of the assessee. The assessee was unable to explain the issue before any of the authorities. The Ld.CIT(A) had passed the order without considering the merit of the case. The Ld.AR stated that a further opportunity should be given to assessee for representing the matter before the CIT(A). In our considered view, one more