PRABHA RAJPUT,BHOPAL vs. ITO-3(1), BHOPAL

This appeal by the Assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi dated 21.09.2023 for A.Y. 2007-08.

ITANo.479/Ind/2023 Prabha Rajput proposes to here and disposed of this appeal ex-parte. The assessee has raised following grounds of appeal:

“1.That the order of the NFAC/Ld.CIT(A) is bad and erroneous in law and against the principles of natural justice and equity and therefore the assessment order deserves to be quashed. 2.That on the facts & circumstances of this present case as well as law on the subject, the NFAC/Ld.CIT(A) has erred in passing of Ex- Parte order without giving proper opportunity of being heard to the Appellant. 3.That on the facts and in the circumstances of the case as well as law on the subject, the 2NFAC/Ld.CIT(A) has erred in confirming the action of Assessing Officer in making addition of Rs.17,65,500/- u/s 69 of the Act on account of unexplained investment which was jointly acquired with Smt. Kamla Bai to the appellant and is therefore unjust, illogical and arbitrary and deserves to be quashed.

4 That the appellant has also sold agricultural land jointly with Smt. Kamla Bai an amounting to Rs 11,80,000/- and Rs.6,00,000/-and the above said amounts utilized to purchase of the agricultural land which was mentioned in Para No-3. That the facts and in the circumstances of the case as well as law on the subject, the NFAC/Ld. CIT(A) has erred in confirming the action of Assessing officer in making addition of Rs.17,65,500/- u/s 69 of the Act on account of unexplained investment in the purchase of land and therefore it is unjust, illogical and arbitrary and deserves to be quashed. 5.It is prayed that the assessment order may please be quashed and/or addition made by the assessing officer and confirmed by NFAC/Ld.CIT(A) may please be deleted. 6.Appellant craves leave to add, alter, delete or modify and/or withdraw grounds of appeal up to the date of hearing of the appeal.”

3. The assessee is an individual and did not file return of income for the year under consideration. The AO initiated proceeding u/s 147 on the basis of the AIR information received regarding purchase of immovable property by the assessee vide two agreements registered with Sub-registrar. The assessee did not respond to the ITANo.479/Ind/2023 Prabha Rajput notice issued u/s 148 and subsequent notices issued by the AO and consequently the assessment was framed on the basis of the information available with the AO. The AO called for information u/s 133(6) from the registrar of properties and found that the assessee has purchased the agricultural land for total consideration of Rs. 17,65,500/- through registered agreements. Accordingly the AO made an addition of Rs.17,65,500/- u/s 69 of the Act as unexplained investments. The assesse challenged the action of the AO before the CIT(A) but despite the notices issued by the CIT(A) there was no response on behalf of the assessee and consequently the appeal of the assesse was dismissed by the CIT(A) while passing impugned ex-parte order.

4. On the other hand Ld. DR has fairly submitted that the AO has made the addition for want of any details and explanation for the source of the investment made in purchase of agricultural land by the assesse. The CIT(A) has also passed the impugned order ex- parte when the assesse did not respond to the notice issued by the CIT(A). Therefore, the Ld. DR has fairely submitted that the explanation and details if any for the source of investment is required to be verified at the level of the AO.

5. Having considered the assessment order as well as the impugned order of the CIT(A) and the submissions of the Ld. DR we find that the AO has made the addition of the entire purchase consideration for want of any explanation on behalf of the assessee

ITANo.479/Ind/2023 Prabha Rajput to the source of the investment made in purchase of the agricultural land. Before the CIT(A) the assesse submitted that the source of investment of Rs.17,65,500/- was sale consideration of another agricultural land which was owned by the assessee with co- owner Smt. Kamla Bai. The assessee also produced sale deed dated 05.06.2006 for consideration of Rs.11,80,000/- to show that the investment made in the purchase of agricultural land is out of the sale proceeds of the agricultural land. Further the assessee explained that an another piece of land was also sold by the assesse for Rs.6,00,000/- and the amount was received during the year under consideration but sale deed was registered on 08.02.2007. Despite all these explanations the CIT(A) has confirmed the addition made by the AO on the ground that the assessee has not filed any submission except the sale deed which is already available with the AO during the assessment. We further note that the CIT(A) has issued two notices dated 13.08.2020 and 11.09.2023 which shows that there is a gap of more than three years between these two notices and thereafter the assessment order was passed on 21.09.2023. Accordingly in the facts and circumstances of the case and in the interest of justice, we are of the considered opinion that the source of investment as explained by the assessee is required to be verified and considered at the level of the AO. Hence, the impugned ex-parte order of CIT(A) is set aside and the matter is remanded to the record of the AO for deciding a same afresh after giving one more opportunity of hearing to the assessee.

ITANo.479/Ind/2023 Prabha Rajput 6. In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on conclusion of hearing on 12 .03.2024.