The New Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has remanded the case to the Commissioner of Income Tax (Appeals) for a fresh adjudication. This decision was made because CIT(A) did not issue a physical notice before ex-parte proceedings on unexplained investment.
Kusham, the assessee had purchased an immovable property for Rs. 2,47,96,873 during the assessment year 2013-14. The Assessing officer (AO) noticed the purchase but couldn’t verify the status of income tax filing due to the lack of availability of the assessee’s PAN.
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The AO reopened the case and issued a notice under section 148 of the Income Tax Act. However, the assessee did not respond to the notices which led to the addition of Rs. 63,86,718 as an unexplained investment under section 69 of the Income Tax Act, 1961.
Aggrieved by the AO order, the assessee appealed before the CIT(A). Unfortunately due to non-compliance of notices, the appeal was dismissed by upholding the AO’s order. The assessee appealed before the ITAT, New Delhi against the order of the CIT(A).
The assessee’s representative, Anand Gupta, stated that the assessee is a homemaker and has no sources of income other than her husband’s agricultural income. The counsel claimed that the assessee purchased agricultural land along with her sister. The share of the assessee was Rs.63,86,718 only and the whole payment was transferred from the assessee’s bank account.
The assessee’s counsel highlighted that the assessee did not receive any physical notice of hearing from the first appellate authority, and the ex-parte order was passed without proper communication. The counsel prayed to remand the matter for fresh adjudication as the assessee was not aware of the proceedings. The revenue legal representative, Anupma Singla supported the CIT(A) Order and blamed the assessee’s negligence.
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The two-member bench comprising Kul Bharat (Judicial Member) and Avdhesh Kumar Mishra, (Accountant Member) observed that the assessee had appeared and produced relevant documents but the AO refused to entertain. The tribunal further observed that the CIT(A) dismissed the appeal without issuing a physical notice of hearing.
Considering the facts and submission, the tribunal decided to remand the matter to the CIT(A) for fresh adjudication and directed to give adequate opportunity to the assessee for hearing before deciding the matter. Thus, the appeal was allowed for statistical purposes.
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