The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter back to the Commissioner of Income Tax(Appeals) [ CIT(A) ] due to inadequate reasoning and failure to frame points of determination regarding the Rs. 29.32 lakh unexplained investment, as required under section 250(6) of the Income Tax Act,1961.
Firoz Pasha,appellant-assessee,has filed an appeal against the order dated 29.11.2023, issued by the CIT(A)/National Faceless Appeal Centre (INFAC), for the assessment year (AY)2012-13, concerning proceedings under section 250 of the Act.
The tribunal heard both parties extensively and observed that the lower authorities had added an unexplained investment of Rs. 29.32 lakhs under section 69 of the Act in the assessee’s case. Mr. Sharma argued strongly, supporting the Revenue’s view that the assessee had made the investment in two immovable properties during the financial year 2011-12.
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Section 69 of the Income Tax Act deals with unexplained investments. It allows the Assessing Officer(AO) to treat any investment made by a taxpayer during a financial year as income, if the taxpayer cannot satisfactorily explain the source of the investment or provide a reasonable explanation for its origin.
The onus is on the taxpayer to prove that the investment was made from a legitimate source. If the taxpayer fails to provide a satisfactory explanation, the investment amount is added to the taxable income and taxed accordingly. This section helps prevent tax evasion by targeting undisclosed investments.
The appellate tribunal noted that while the AO had discussed the investment in detail, the CIT(A) failed to frame any points of determination or provide a detailed discussion, as required under section 250(6) of the Act.
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Section 250(6) of the Act requires the CIT(A) to provide a detailed and reasoned order when disposing of an appeal. It mandates that the order should include points of determination, the arguments raised by the assessee, and the reasons for the decision taken.
This section ensures transparency and fairness in the appellate process, compelling the CIT(A) to thoroughly discuss the issues at hand and give clear reasoning for upholding or rejecting the appeal. Failure to comply with these requirements can lead to the order being challenged or remanded.
A single member bench comprising Satbeer Singh Godara (Judicial Member) decided to remand the case to the CIT(A) for fresh adjudication, with the assessee being given three opportunities to present their case and the responsibility to prove all relevant facts in the proceedings.
In short the appeal filed by the assessee was allowed for statistical purposes.
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