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Facts
The assessee purchased a property for Rs.91,35,000/- and incurred other expenses of Rs.5,71,000/-. The Assessing Officer (AO) reopened the assessment and treated the total investment of Rs.97,06,000/- as unexplained, alleging lack of proof for the source of funds, as a loan from a company that filed a loss return was not substantiated.
Held
The Tribunal observed that the CIT(A) had dismissed the appeal ex-parte due to non-submission of documents. Considering it in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the appeal to the file of the CIT(A) for fresh adjudication, allowing the assessee a reasonable opportunity to be heard and submit evidence.
Key Issues
Whether the addition of unexplained investment was justified without proper opportunity to the assessee, and whether the ex-parte dismissal by CIT(A) was appropriate.
Sections Cited
147, 144B, 148, 69, 250, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”, DELHI
Before: SH. SUDHIR KUMAR & SH.BRAJESH KUMAR SINGH
Date of hearing: 13/10/2025 Date of Pronouncement: 13/10/2025 ORDER PER BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER:
This captioned appeal filed by the assessee, pertaining to Assessment Years 2015-16, is directed against order passed by the Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre (in short “NFAC”), Delhi, which in turn arise out of order dated 29.05.2023 passed by the Assessing Officer under section 147 read with section 144B of the Income Tax Act, 1961 (hereinafter referred to as the 'Act').
The assessment in this case was reopened/s. 147 of the Act by issuing notice u/s. 148 of the Act for 20.07.2022. In response to the said notice the assessee filed return of income on 25.11.2022 declaring total income of Rs.79,63,500/-. The assessment was reopened in this case on the ground that the assessee had purchased a property to the tune of Rs.91,35,000/- during the F.Y. 2014-15 relevant to A.Y. 2015- 16 and the analysis of the said information led the AO to believe that income to the tune of Rs.91,35,000/- had escaped assessment.
In the assessment proceedings the AO show caused the assessee as to why total purchase consideration amounting to Rs.97,06,000/- (Purchase value Rs.91,35,000/- + Registry and other expenses Rs.5,71,000) should not be treated unexplained investment in the F.Y. 2014-15 relevant to A.Y. 2015-16, in the absence of supportive evidences, genuineness and creditworthiness of fund.
On perusal of the reply the AO noted that the assessee has taken loan from M/s. River Side Utilities Pvt. for purchase of immovable property. The AO verified from the Income tax return of M/s. River Utilities Pvt. Ltd. and found that it had filed loss return of income on 26.09.2015 of Rs. (-) 9,88,00227/- and, therefore, the creditworthiness and genuineness of the said loan was not proved for the purchase of immovable property the assessee. Hence, the total investment of amounting to Rs.97,06,000/- (Purchase value of Rs.91,35,000 + Registry and other expense Rs.5,71,000/- ) was treated as unexplained investments u/s. 69 of the Act and added to the total income of the assessee.
Aggrieved with the said order the assessee filed an appeal before the CIT(A).
The appeal of the assessee was dismissed exparte by the Ld. CIT(A) because according to the Ld. CIT(A) the assessee did not file any submissions in response to the various notices for hearing which were issued on 11.03.2024, 27.03.2024, 13.04.2024, 10.05.2024, 09.07.2024 to the assessee.
Aggrieved with the said order the assessee is in appeal before us from the following grounds of appeal :-
That the assessment order passed a/s 147 r.w.s. 1448 and u/s 250 is illegal, bad in law and without jurisdiction.
2. That the AO has grossly erred in law and on facts in passing the impugned assessment order and making additions without giving a sufficient opportunity to the assessee to be heard and save is confirm by Ld. CIT-(Appeal). The impugned order is passed in gross violation of principles of natural justice 3. That the AO has in view of the facts and circumstances of the case erred in law & on facts in making the addition of Rs. 97,06,000/- and Section 69 of the Income Tax Act, 1961 and same is confirmed by Ld. CIT-(Appeal) notwithstanding the fact that, the assessee has discharged its burden of proof and has also erred in ignoring the evidences placed and available on record.
4. That the explanations filed and the material available on record has not been properly considered and legally interpreted. The addition made is unjust and unlawful and based on mere surmises and conjectures and hence cannot be justified by any material on record.
5. That the Ld. AO has erred in law and on facts and circumstances of the case, in initiating the penalty proceedings u/s 271(1)(c) of the Act and same is confirmed by Ld. CIT- (Appeal) 6. That the above grounds are independent of each other and we pray your honour to allow additions/ modification in above grounds, if required during appellate proceedings 7. That the above grounds are without prejudice to each other.
During the hearing before us, the Ld. SR. AR submitted that the notice issued by the Ld. CIT(A) were not received by the assessee and, therefore, the case may be restored back to the file of the CIT(A) for fresh adjudication.
The Ld. Sr. DR did not raise strong objections to the above plea of the Sr. AR.
We have heard both the parties and considered the material available on record. In this case the Ld. CIT(A) dismissed the appeal of the assessee exparte. Therefore, in the interest of justice and to give one more opportunity to the assessee, we set aside the order of the Ld. CIT(A) and the appeal is restored back to the file of the Ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee. Further the assessee is also at liberty to submit any explanation/ material / evidence in support of its claim.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 13.10.2025.