PRAFULLABEN MOHANLAL RAVAL,BHAVNAGAR, GUJRAT vs. ITO, WARD 1(8), BHAVNAGAR

Assessment Year 2016-17 Prafullaben Mohanlal The ITO, Raval, Ward-1(8), Bhavnagar 2, Darshan Society, Vs Behind Jain Derasar, (Respondent) Sihor, Gujarat-364240 PAN: CAJPR0711C (Appellant) Assessee Represented: Shri Suchek Anchaliya, A.R. Revenue Represented: Ms. Neeju Gupta, Sr.D.R. Date of hearing : 13-02-2024 Date of pronouncement : 21-02-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the assessee as against the exparte appellate order dated 16-08-2023 passed by Commissioner of Income Tax [Appeals], National Faceless Appeal Centre [NFAC], Delhi arising out of the exparte assessment order passed under section 144 r.w.s. 147 of the Income Tax Act, 1961 [herein after referred as the Act] relating to the assessment year 2016–17.

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1. On the facts and in the circumstances of the case and in law the Hon'ble NFAC erred in confirming the order of the Learned Assessing Officer ('Ld. A.O.), without providing a reasonable opportunity of being heard.

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2. On the facts and circumstances of the case and in law, the Hon'ble NFAC erred in confirming the action of the Ld. A.O. of the addition of Rs.2,25,00,000/-, being purchase consideration of Immovable property, without appreciating the facts that the assumption of jurisdiction by the Ld. A.O. for initiating reassessment proceedings u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') is bad in law.

3. On the facts and circumstances of the case and in law, the Hon'ble NFAC erred in confirming the addition of Rs.2,25,00,000/- being purchase consideration of Immovable property by treating it as unexplained income from undisclosed sources, on the basis of non-filing of return without appreciating the fact of the case. 3.1 On the facts and circumstances of the case and in law, the Hon'ble NFAC erred in not appreciating the fact that appellant's income was below taxable limit, hence the assessee was not liable to file the Return of Income u/s 139 of the Act. 4. On the facts and circumstances of the case and in law, the Hon'ble NFAC has erred in confirming the action of the Ld. A.O. by making addition to the tune of Rs.2,25,00,000/- as unexplained income without appreciating the fact that the source of money paid for purchase of immovable property is from the known sources and banking channel. 5. On the facts and circumstances of the case and in law, the Hon'ble NFAC has erred in confirming the action of the Ld. AO of making the addition without any head of income by treating Rs.2,25,00,000/- as unexplained receipts without appreciating the facts that the said transaction is for purchase of property and receipt of money. 6. The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another. 3.1. The assessee also filed application under Rule 29 of the Income Tax Appellate Rules, 1963 enclosing Return of Income filed by the assessee in response to 148 notice, Agreement of purchase of the immovable property, Ledger accounts, Bank Statements, source of fund of Mr. Mohan Raval and Rajesh Raval.

4. Ld. Counsel Shri Suchek Anchaliya appearing for the assessee submitted that the assessee after her marriage shifted to Mumbai from Bhavnagar, Gujarat. Though only one notice was served upon Page No 4 Prafullaben Mohanlal Raval vs. ITO the assessee, she could not participate both before the Assessing Officer. During the hearings before the Appellate proceedings, she was collecting all the required details and therefore sought for an adjournment for filing the above details. However Ld. NFAC decided the matter exparte, without granting adjournment sought by the assessee. Therefore the assessee is invoking Rule 29 of the Income Tax Appellate Rules and requested to entertain the additional documents submitted by the assessee and further prayed that the matter may be set aside to the file of Ld. CIT(A), NFAC for fresh adjudication.

5. Per contra, Ld. Sr. D.R. Ms. Neeju Gupta appearing for the Revenue strongly objected to the plea of the assessee, stating that proper opportunities were given by the Assessing Officer before framing assessment order and also issued final show cause notice before passing the exparte assessment order. Even before Appellate Authorities, five opportunities were given to the assessee, however the assessee failed to avail the hearing opportunities. Therefore for the willful non-cooperation of the assessee, the present application under Rule 29 is liable to be rejected and the assessee appeal is to be dismissed.

Page No 5 Prafullaben Mohanlal Raval vs. ITO address of the assessee. However the assessee claims that only one notice was received by the assessee at Bhavnagar address and could not participate in the assessment proceedings. Now the assessee undertakes to file all the required details as submitted in Rule 29 Application before the Authorities concerned, thereby requested to give one more opportunity to represent the case of the assessee.

6.1. It is seen that Rule 29 of the ITAT Rules prescribes production of additional evidence before the Tribunal is acceptable, provided if the Income Tax Authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them. Here, in this case in spite of five opportunities given by the Assessing Officer as well as Ld. CIT(A), the assessee failed to file the required details before the Assessing Officer which resulted in passing exparte orders. However the A.O. treated the entire investment in the immovable property as the unexplained income of the assessee and taxed thereon, which is not permissible in law. Therefore to meet the ends of justice, we deem it fit to set aside the matter back to the file of Jurisdictional Assessing Officer (JAO) to do de-novo assessment by imposing a cost of Rs.5,000/- payable to the Prime Minister National Relief Fund for not availing the hearing opportunities given by the Lower Authorities. On production of payment of receipt of the above cost by the assessee, the JAO to proceed with the de-novo assessment. Needless to state, that the assessee should cooperate by producing all the required details before the Jurisdictional Assessing Officer for completion of de-novo assessment.

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