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Facts
The assessee's appeal is against the ex-parte order of the NFAC for AY 2015-16, where income was confirmed at Rs.29,02,790/- against a returned income of Rs.3,17,790/-. The assessment was re-opened under Section 147, and additions were made concerning unexplained investments in immovable property and provision under Section 56(2)(vii)(b).
Held
The Tribunal observed that the assessee was not afforded adequate opportunity to present their case and that the authorities below did not properly consider the explanations offered. The Tribunal emphasized the principles of natural justice.
Key Issues
Whether the assessee was afforded sufficient opportunity to represent their case and whether the additions made were justified considering the grounds raised.
Sections Cited
56(2)(vii)(b), 147, 148, 142(1), Chapter-VI-A
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Income Tax Appellate Tribunal, JABALPUR BENCH “DB”, JABALPUR
Before: SHRI KUL BHARAT & SHRI, NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 29.01.2024 pertaining to the assessment year 2015-16. The assessee has raised the following grounds of appeal: -
1. That the Ld. National Faceless Appeal Centre (NFAC) has grossly erred in facts and circumstances of the case to pass ex-parte order.
2. That the NFAC has grossly erred in facts and circumstances of the case to confirmed the income atRs.29,02,790/- against the returned income at Rs.3,17,790/-.
3. That the addition made for Rs.7,62,500/- on account of provision of Section 56(2)(vii)(b) of IT Act, 1961, is unjustified.
4. That the addition confirmation of purchase of immovable property at Rs.5,91,550/- considered unexplained investment is unjustified.
Page 2 of 4 5. That the addition confirmation of purchase of immovable property at Rs.12,32,500/- considered unexplained investment is unjustified.
6. That the assessee craves leave to raise any other ground/s on or before the date of hearing to prove that the order is bad.”
The facts giving rise to the present appeal are that in this case the assessment was re-opened u/s 147 of the Income Tax Act, 1961 (“the Act”, for short). In response to the notice u/s 148 of the Act to the assessee, he filed his return of income on 25.08.2019, declaring total income at Rs.3,28,920/- and net income at Rs.3,16,790/- after having claimed deduction under Chapter-VI-A of the Act. During the course of assessment proceedings, various queries u/s 142(1) of the Act were issued to the assessee for seeking explanation in respect of the source of funds used in purchase of immovable property. The Assessing Officer in the absence of proper reply proceeded to make addition of Rs.25,86,000/- and assessed income at Rs.29,02,790/- u/s 147/148 of the Act. Aggrieved by this order, the assessee preferred appeal before the Ld. CIT(A) who also dismissed the appeal exparte to the assessee. Now the assessee is in appeal before this Tribunal.
Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the assessee was not afforded sufficient and adequate opportunity to represent his case. The assessee in fact had filed certain information before the Assessing Officer. The Assessing Officer without verifying the same proceeded to make impugned addition and the Ld. CIT(A) also dismissed the appeal of the assessee without adverting to the grounds on merits. He submitted that non-consideration of submissions has seriously prejudiced the assessee. He submitted that had the 4. On the other hand, the Ld. Departmental Representative (DR) has filed an application for seeking adjournment. The reasons stated in the application are found not sufficient for granting the adjournment, hence, the adjournment is hereby declined. The Ld. DR supported the orders of the lower authorities and contended that it was incumbent upon the assessee to explain the source of investment made in the immovable property. He submitted that for want of any supporting evidence and proper explanation by the assessee. The AO was justified in making addition. He contended that the onus is on the assessee to explain source of investment made in the immovable property.
We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the authorities below have not considered the explanation offered by the assessee. The assessee ought to have been given opportunity to explain the source of investment which could be verified independently by the assessing authority. In the absence of this exercise, the orders passed authorities below cannot be sustained. Therefore, looking to the totality of the facts and the material placed before us, we are of the considered view that to sub-serve the principles of natural justice, assessee should be given proper opportunity to represent his case effectively. We hereby, set aside the impugned orders and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving proper opportunity to the
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 30/06/2025.