This case involves Sudesh Devi’s appeal against the order of the Income Tax Officer (ITO), Ward-3, Bhiwani, regarding the assessment year 2010-11. The appeal contests the reassessment proceedings and the addition of Rs. 58,41,935/- as unexplained investment.
Background
Sudesh Devi filed her return of income declaring nil income. The case was reopened under Section 147 of the Income-tax Act, 1961, based on the information that Sudesh Devi had made an investment in the purchase of land amounting to Rs. 58,41,935/-, which was claimed as a gift receipt. The Assessing Officer (AO) rejected this claim and added the amount to her income as unexplained investment.
Appellant’s Grounds of Appeal
On the facts and circumstances of the case, the confirmation of initiation of the proceedings under Section 147, read with Section 148, made by CIT (A) Hisar, is bad and liable to be quashed as the condition and procedure prescribed under the statute have not been satisfied and complied with.
On the facts and circumstances of the case, the reassessment proceedings confirmed by the learned CIT (A) Hisar are bad in the eye of law as the reasons recorded for the issue of notice under Section 148 are bad in the eye of law and are contrary to the facts.
On the facts and circumstances of the case, the order passed by the CIT (A) is bad in the eye of law and on facts, as the same is made on the basis of reasons recorded without there being any independent application of mind.
On the facts and circumstances of the case, Id. CIT (A) has erred both on facts and in law, justified the assessment at an income of Rs. 58,41,935/- as against income of Rs. NIL declared by the appellant.
That on the facts and circumstances of the case, the learned CIT (A) has erred in confirming an opinion that the purchase of ancestral agriculture land from blood relatives through a gift of Rs 58,41,935/- is unexplained investment without appreciating that the said investment itself speaks everything like identity, creditworthiness, and genuineness.
That on the facts and circumstances of the case, the learned CIT (A) has erred in confirming an addition of Rs 58,41,935/- on account of alleged unexplained investment during the year without taking cognizance of the fact that the above agriculture land was purchased through a gift from blood relatives.
(i) That the addition has been made grossly indulging in conjecture and surmises without there being any direct adverse material against the assessee, based only on suspicion. (ii) That the addition has been made despite the assessee bringing on record all evidence and material to prove the identity, creditworthiness, and genuineness of the transaction. (iii) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition on the basis of material collected at the back of the assessee without giving it an opportunity to rebut the same in violation of the principle of natural justice. (iv) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition on the basis of the mistake of certain persons without giving it an opportunity to cross-examine the same in violation of the principle of natural justice. (v) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition without taking cognizance of the reply filed against the show-cause notice.
That the addition has been made grossly erred in forming an adverse opinion in the absence of any cogent corroborative material or evidence found during the course of search on third parties or brought on record.
That on the facts and circumstances of the case and in law the Ld. CIT (A) proceeded to make additions without appreciating that the appellant had duly discharged the onus.
The learned CIT (A) while confirming the order relied on the report of the inspector which has been recorded under threat, pressure and was not out of free will, is not reliable and the facts mentioned in the statements so recorded are contradictory, far from reality and not true.
Proceedings and Arguments
During the hearing on 25.04.2023, the appellant’s counsel argued that the CIT (A) dismissed the appeal for non-prosecution and did not decide the issue on merits. The CIT (A) noted that the assessee had not been cooperating and had not responded to notices. Consequently, the CIT (A) dismissed the appeal, citing lack of prosecution.
Tribunal’s Findings
The ITAT emphasized that the CIT (A) cannot dismiss an appeal for non-prosecution and must pass a speaking order. Both parties agreed to this proposition. In the interest of justice, the Tribunal remitted the issue to the file of the CIT (A) to decide the issue on merits and pass a speaking order, ensuring that the assessee is given an opportunity of being heard.
Order Pronouncement
The ITAT set aside the appellate order dated 01.01.2020 and remitted the issue to the CIT (A) for fresh consideration on merits. The decision was pronounced in the open court on 27th April 2023 by Shamim Yahya, Accountant Member, and Challa Nagendra Prasad, Judicial Member.
Conclusion
In conclusion, the appeal by Sudesh Devi was allowed for statistical purposes. The case was remitted to the CIT (A) for fresh consideration on merits, ensuring that the assessee is given an opportunity to present her case.
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