Addition u/s 69 made due to Unavailability of Transaction Information: ITAT grants final Opportunity for Non-Compliance [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) granted a final opportunity to the assessee for non-compliance even after the appellate stage due to an addition under Section 69 of the Income Tax Act, 1961 made due to unavailability of transaction information.

The assessee is an individual who did not file the return of income. The assessing officer, based on information from the National Market System (NMS) module noticed that the assessee has sold immovable property during the year under consideration. He therefore reopened the assessment under Section 147 of the Income Tax Act and accordingly issued a notice under Section 148 of the Income Tax Act to the assessee.

The Assessing Officer completed the assessment under Section 144 read with Section 147 of the Income Tax Act in which he made an addition of Rs.37,93,000/- as undisclosed income pertaining to the sale of property and also an addition under Section 69 of the Income Tax Act towards the purchase and sale of shares amounting to Rs.6,36,961.

The assessee filed an appeal before the Commissioner of Income Tax (Appeal) [CIT(A)]. In the statement of facts and grounds of appeal before the CIT(A), the assessee has stated that the property that is sold does not belong to the assessee and that the 'net income from the share transaction is below the taxable limit and hence no return was filed.

The assessment did not make any representation before the CIT(A) and no written submissions were filed. Therefore, the CIT(A) dismissed the appeal exparte confirming the additions made by the Assessing Officer.

The Authorized Representative submitted that the assessee is not aware of the proceedings of income tax and hence did not represent the case. He prayed for one more chance to represent the case before the lower authorities.

The Departmental Representative submitted that the assessee is a habitual defaulter in not representing the case and that he has not appeared before the assessing officer as well as the CIT(A). He therefore submitted that the additions made should be confirmed.

The Two-member bench comprising of Aby T Varkey (Judicial member) and Padmavathy S. (Accountant member) held that the additions made by the Assessing Officer are based on information from the Intelligent Transport System (ITS) data and due to lack of details the assessing officer has treated the entire income from sale of property as unexplained. The addition towards share transaction was also made for the same reason that no information was available with regard to the transaction and hence added as income under Section 69 of the Income Tax Act.

Considering the facts of the case and in the interest of justice and fair play the bench gave one final opportunity to the assessee and remitted the issue back to the CIT(A) to examine the case afresh on merits by calling for details as may be required. Thus, the appeal was allowed.

To Read the full text of the Order CLICK HERE

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