The case ITA 7/DEL/2019 involved Manju Singh of Noida as the appellant, contesting against the Income Tax Officer (ITO), Ward-2(2), Noida. The appeal pertained to the assessment year 2009-10 and was filed on January 1, 2019. The final order was pronounced on October 7, 2019.
Manju Singh filed the appeal challenging the order of the Commissioner of Income Tax (Appeals) – 1, Noida, dated June 29, 2018. The primary grievance was that the Assessing Officer (AO) erred in framing the assessment under Section 143(3) read with Section 147 of the Income Tax Act, 1961, and made an addition of Rs. 15 lakhs, despite the reasons for reopening the assessment being related to the purchase of immovable property amounting to Rs. 34.50 lakhs.
The appeal was heard by Shri N.K. Billaiya, Accountant Member, of the Delhi ‘SMC’ Bench of the Income Tax Appellate Tribunal (ITAT). The appellant was represented by Shri Ajith Sharma, CA, while the respondent was represented by Ms. Ekta Vishnoi, Senior Departmental Representative.
The appellant’s counsel argued that the reassessment proceedings were initiated based on unverified AIR information regarding the purchase of immovable property. The counsel further contended that the AO made an arbitrary addition of Rs. 15 lakhs, despite the appellant providing bank statements and other evidence showing the source of funds as an unsecured loan from Shri Vijay Tehalani. The appellant’s counsel also pointed out that the CIT(A) passed an ex-parte order without properly considering the evidence presented by the appellant.
The respondent’s representative, Ms. Ekta Vishnoi, supported the findings of the lower authorities, stating that sufficient opportunities were provided to the appellant, who failed to cooperate during the proceedings.
After hearing both parties and reviewing the records, the tribunal observed that the AO issued the notice under Section 148 to examine the purchase of immovable property amounting to Rs. 34.50 lakhs. However, the AO made an addition of Rs. 15 lakhs based on the appellant’s alleged surrender, without properly examining the source of funds. The tribunal also noted that the CIT(A) passed an ex-parte order without considering the documentary evidence presented by the appellant.
The tribunal concluded that the case should be remitted back to the AO for fresh consideration. The AO was directed to examine the amount of the loan taken in the relevant financial years and to match the source of investment with the purchase of the immovable property. The AO was further directed to provide the appellant with a reasonable opportunity for a hearing and to consider all relevant evidence and documents submitted by the appellant.
The appeal filed by Manju Singh was allowed for statistical purposes, with the matter being referred back to the AO for a fresh decision. This case highlights the importance of thorough verification of evidence and adherence to procedural fairness in reassessment proceedings.
This case underscores the necessity for tax authorities to verify information properly before initiating reassessment proceedings and to consider all evidence presented by taxpayers. It also emphasizes the importance of providing taxpayers with a fair opportunity to be heard before passing ex-parte orders.
The final order in ITA 7/DEL/2019 was pronounced on October 7, 2019, with the appeal allowed for statistical purposes and the case remitted back to the AO for fresh adjudication, ensuring compliance with the principles of natural justice.
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