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Facts
The assessee's original return was processed u/s 143(1). Subsequently, the case was reopened u/s 147 and 148 based on information about a deposit of Rs. 2.33 crore, alleged to be a benami transaction. The Assessing Officer then made an addition of Rs. 2.53 crore u/s 69 for unexplained investment and passed a best judgment assessment u/s 144. The CIT(A) upheld the AO's order ex parte due to the assessee's consistent non-compliance during appellate proceedings.
Held
The Tribunal, acknowledging the principles of natural justice, decided to remand the case back to the CIT(A) for de novo adjudication. This grants the assessee another opportunity to present documentary evidence to substantiate their case. The assessee is directed to comply and cooperate with the proceedings without undue delay.
Key Issues
Validity of the assessment reopening; correctness of the addition made u/s 69 for unexplained investment/deposits; and the propriety of the CIT(A)'s ex parte order due to the assessee's non-compliance.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 151 of the Income Tax Act, 1961, Section 69 of the Income Tax Act, 1961, Section 143(1) of the Income Tax Act, 1961, Section 148 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI B R BASKARAN, AM & MS. KAVITHA RAJAGOPAL, JM
O R D E R Per Kavitha Rajagopal, J M:
These appeal have been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Years (‘A.Y.’ for short) 2008-09 and 2009-10.
As the facts and circumstances are common in both the appeals, we take as the lead case.
The grounds of appeal
raised by the assessee reads as under:
1. In the facts and in the circumstances of the case and in law, the earned Commissioner Income Tax (Appeals) has erred in upholding the action of the ld. Assessing Officer in reopening 2 & 357/Mum/2024 (A.Ys.2008-09 & 2009-10) Vivek Ramsing Padvi vs. ITO the assessment for the relevant AY 2008-09 in contravention of the provisions of section 147 to section 151 of the Act.
2. In the facts and in the circumstances of the case and in law, the learned Commissioner Income Tax (Appeals) has erred in upholding the action of ld. Assessing Officer in making addition of Rs.2,53,26,125/- to the total income of the appellant; alleging it to be unexplained investment/deposits from undisclosed sources under section 69; disregarding the factual and legal matrix of the case, inter-alia the following: a) that the bank account of the appellant was operated and misused by third party for fund transfers (which was also accepted by such person) and under such circumstances no addiotn should be made in the hands of the appellant. b) Without prejudice to above, that the bank account of the Appellant was misused by third party for fund transfer and under such circumstances entire credits in the bank account cannot added to total income disregarding the corresponding debits in the said bank account. c) Without prejudice to above, that under such circumstances the addition can only be made amount for the commission involved as hled by Hon'ble Jurisdictional High Court in the case of PCIT vs. Alag Securities Pvt. Ltd. (ITA No. 1512/2017 order dated 12.06.2020).
4. The brief facts are that the assessee is an individual and had e-filed his original return of income declaring total income of Rs.1,04,980/- on 22.01.2010 and the same was processed u/s. 143(1) of the Act. Based on the information received from the DDIT, the learned Assessing Officer (ld. A.O. for short) reopened the case of the assessee u/s. 147 of the Act vide notice dated 31.03.2015 u/s. 148 of the Act for the reason that the assessee is said to have deposited Rs.2,33,35,290/- and is alleged to be a benami of one Shri Mohd. Shafi Ansari. The ld. A.O. then passed the assessment order dated 14.03.2016 u/s. 144 r.ws. 147 of the Act, thereby determining the total income at Rs.2,54,31,110/- after making an addition of Rs.2,53,26,125/- u/s. 69 of the Act on account of unexplained investment.
5. The assessee was in appeal before the first appellate authority, challenging the assessment order and the ld. CIT(A) vide an ex parte order dated 28.11.2023, upheld the order of the ld.A.O. for the reason that inspite of several opportunity the assessee has proceedings.
6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has been non compliant throughout the appellate proceeding. The assessee has also not furnished any details pertaining to the impugned addition before the ld. A.O. where the assessment was then passed u/s. 144 of the Act being the best judgment assessment.
The learned Authorised Representative ('ld. AR' for short) for the assessee during the appellate proceeding prayed that the assessee may be given one more opportunity to present his case before the ld. CIT(A) and undertakes to furnish the documentary evidences to substantiate the assessee’s case.
The learned Departmental Representative ('ld.DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunity by the ld. CIT(A) which was not availed by the assessee.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand all these to comply and co-operate with the proceedings without any undue delay on his side.
As the facts are identical, the observation in applies mutatis mutandis to this appeal also.
In the result, both the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the open court on 21.06.2024.