Unexplained Property Purchase of Rs. 58 Lakh Leads to Income Addition: ITAT Sets Aside CIT(A) Order [Read Order]
Despite multiple notices and opportunities, the assessee failed to provide a satisfactory explanation or appear before the CIT(A), resulting in an ex-parte dismissal of the appeal
Income Addition – ITAT – taxscan
Income Addition – ITAT – taxscan
The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax (Appeals)[CIT(A)] order and directed a fresh hearing after the assessee’s unexplained property purchase of Rs. 58 lakh was added to income.
Ashok Tiwari,appellant-assessee,filed his return of income on 21.06.2013 for the assessment year 2012–13. Later, the ADIT (Investigation),informed the department that he had purchased an immovable property worth ₹58,30,786 from Shri Abhishek Kumar, which was not disclosed in the return.
Based on this information, the case was reopened after obtaining approval from the Principal CIT, Muzaffarpur. A notice under section 148 was issued, but the appellant did not respond. A subsequent notice under section 142(1) was issued on 02.09.2019, and the assessee later submitted bank statements. A show-cause notice was also issued, but no satisfactory explanation was provided regarding the property purchase.
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The Assessing Officer (AO) treated the investment as unexplained and added it to the total income, which was assessed at ₹60,58,790. Interest was charged as per the Act. Aggrieved, the assessee filed an appeal before the CIT(A).
The CIT(A) gave multiple chances to the appellant to present his case, but he neither submitted any written reply nor appeared for the hearing. The appeal was dismissed ex-parte on 25th September, 2024.
Aggrieved by the order, the assessee filed an appeal before the ITAT.
There was a delay of 58 days in filing the appeal. The assessee explained that he was not aware of the CIT(A)’s order as his tax professional had not informed him. Once he came to know, he approached his authorised representative to file the appeal.The tribunal accepted the explanation and condoned the delay.
During the hearing, the assessee’s counsel asked the Bench to cancel the order and send the case back to the CIT(A) for a fresh hearing.The Departmental Representative said the assessee did not provide the required documents during assessment, which led to the income being assessed at ₹60,58,790. The assessee also did not submit any evidence or written reply before the CIT(A) despite several chances, and did not support the claim before the bench. He asked to keep the CIT(A)’s order as it was.
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The two member bench comprising Duvvuru RL Reddy ( Vice-President) and Sanjay Awasthi (Accountant Member) after hearing both sides and reviewing the records, decided to set aside the CIT(A)’s order and send the case back for a fresh hearing to give the assessee another chance to be heard. The assessee was warned to cooperate, or else the CIT(A) could pass the order based on the existing records.
In short,the appeal filed by the assessee was allowed for statistical purposes.
To Read the full text of the Order CLICK HERE
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