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Facts
During a survey operation, discrepancies were found in the assessee's financial statements, leading to a reassessment. The Assessing Officer added Rs. 2,55,000 as unexplained capital introduction because the assessee failed to provide timely explanations and evidence. The CIT(A) upheld this addition.
Held
The tribunal noted that the assessee submitted evidence, including a gift confirmation and bank statements, after the assessment order was passed but before the CIT(A) decision. Citing principles of natural justice, the tribunal remanded the case back to the Assessing Officer for a fresh adjudication, allowing the assessee another opportunity to present evidence.
Key Issues
The key legal issue is whether the assessee was given a proper opportunity to explain the source of capital introduction and provide supporting evidence before the addition was confirmed.
Sections Cited
Section 133A, Section 148, Section 143(2), Section 143(3), Section 147, Section 250
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Income Tax Appellate Tribunal, “SMC” BENCH PANAJI
Before: SHRI PAVAN KUMAR GADALE
सुनवाई की तारीख/Date of Hearing 28.01.2026 घोषणा की तारीख/Date of Pronouncement 29.01.2026 ORDER
PER PAVAN KUMAR GADALE ,JM:
The assesse has filed the appeal against the order of the CIT(A)-2 Panaji passed u/sec143(3) r.w.s 147 and u/sec 250 of the Act. The assesee has raised the grounds of appeal
challenging the order of the CIT(A) sustaining the addition of unexplained capital made by the Assessing officer.
2. The brief facts of the case are that, the assessee is a doctor, there was survey operations u/sec133A of the Act conducted on the professional premises of the assessee Munnvvar Khanum J Pathan. and certain discrepancies were found in the financial statements. The Assessing officer has reason to believe that the income has escaped assessment and issued notice u/sec148 of the Act. In compliance, the assessee has filed the return of income on 13.09.2019 disclosing a total income of Rs.8,12,450/-. Subsequently notice u/sec 143(2) of the Act was issued and the assessee in compliance to notices and letters has filed detailed from time to time in the proceedings. The Assessing Officer (AO) on perusal of cash book found that an aggregate amount of Rs.2,55,000/- i.e Rs.2,00,000/- on 2.04.2021 & Rs.55,000/- on 12.01.2012 was introduced as capital introduction. Whereas the A.O has issued a show cause notice dated 18.12.2019 to furnish the sources of capital introduction in the cash book along with the evidences on 23.12.2019. Since the Assessee has not furnished the explanations and evidences, the A.O has made an addition of Rs.2,55,000/- and assessed the total income of Rs.10,67,449/- and passed the order u/sec 143(3) r.w.s147of the Act dated 26.12.2019.
Aggrieved by the order, the assesse has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts, submissions and findings of the A.O but has sustained the addition as no documentary evidence was filed and dismissed the assesee appeal. Aggrieved by the order of the CIT(A), the assesse has filed an appeal before the Hon'ble Tribunal.
Munnvvar Khanum J Pathan.
At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O overlooking the facts and submissions of the assessee in the proceedings and no proper opportunity was provided. Further the Ld.AR submitted that the assessee has a good case on merits and has filed the submissions along with supporting evidences in lieu of show cause notice dated 18-12-2019 after the compliance date on 27-12-2019 and whereas the assessing officer has passed the assessment order u/sec143(3) r.w.s147 of the Act on 26.12.2019 and the Ld.AR prayed for opportunity to substantiate the capital introduction in the cash book with the confirmation of gift and bank statement before the lower authorities. Per contra, the Ld. DR supported the order of the CIT(A) .
Heard the rival submissions and perused the material on record. The crux of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition of capital introduction without providing proper opportunity and overlooking the facts and material evidences. The assesse has filed all the details before the lower authorities and the CIT(A) has not considered the documents and information supporting the claim of the assesse along with bank statement and confirmation referred at page 5 to 8 of the paper book. Therefore, considering the overall facts, circumstances, submissions and principles of natural justice shall provide with one more opportunity of hearing and accordingly restore the Munnvvar Khanum J Pathan. disputed issue for limited purpose to the file of the Assessing officer for afresh adjudication on merits and the A.O. shall provide adequate opportunity of being heard to the assessee and the assessee should also cooperate in submitting the information and evidences. And the grounds of appeal
of the assessee are allowed for statistical purpose.