The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) addressed the issue of non-compliance by the assessee, granting him an opportunity to present his case and also imposed a nominal cost of Rs. 2,000 due to the previous non-compliance.
Pareshkumar Patil,the appellant-assessee,filed a return of income for the Assessment Year ( AY ) 2015-16, declaring Rs. 5,26,570. Following the return processing, the tax authorities received information about his sale of immovable property, prompting the reopening of the case and a notice under Section 148 on March 25, 2019.
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The appellant did not respond to the notice or subsequent requests for information, leading to the Assessing Officer ( AO ) obtaining sale deed copies from the Sub-Registrar. The review revealed that the appellant received Rs. 34,77,000 from the property sale and made a Rs. 19,50,000 investment in another property during the assessment year.
In the absence of supporting documentation, the AO added the sale proceeds as capital gains and deemed the investment unexplained, adding both amounts to the total income.
The assessee filed a delayed appeal before the Commissioner of Income tax (Appeals) [CIT(A)], which was condoned. The CIT(A) noted that the assessee failed to provide any supporting documents or explanations for the additions made by the Assessing Officer.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Consequently, the CIT(A) upheld the AO’s findings, confirming the additions of Rs. 34,77,000 for undisclosed capital gains and Rs. 19,50,000 for unexplained investments. The assessee contended that the cost of acquisition and indexation benefits were overlooked and that the claimed investment was lower than recorded. However, due to the lack of supporting documentation, CIT(A) dismissed the appeal. The assessee appealed before the tribunal.
The assessee’s counsel acknowledged a lack of cooperation during the assessment and appellate proceedings, attributing it to the assessee residing abroad. This absence led to ex-parte adjudication.
The counsel submitted an affidavit and provided copies of the assessee’s passport and visa to support the claim. Additionally, he presented sale and purchase deeds for the properties, a working of the capital gains, and a bank statement for the assessment year.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The assessee counsel assured that the assessee had all necessary documents to counter the AO’s additions and requested an opportunity to demonstrate that no additions were warranted.
The tribunal considered the submissions and reviewed the affidavit, sale and purchase deeds for three properties, a deed for another property valued at Rs. 16.50 lakhs, and the bank statements for the assessment year.
The two member bench comprising Siddhartha Nautiyal ( Judicial Member ) and Annapurna Gupta ( Accountant Member ) determined that the assessee should be given another opportunity to present his case before the Assessing Officer. However, due to the assessee’s ongoing non-compliance, the tribunal imposed a nominal cost of Rs. 2,000, to be deposited into the Prime Minister’s Relief Fund, before sending the case back to the AO.
In conclusion the appeal filed by the assessee was allowed.
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