GULSHAN KUMAR,FATEHABAD V. INCOME TAX OFFICER, WARD - 1, FATEHABAD

ITA 111/CHANDI/2025

AI Insights

The case involves an appeal by Gulshan Kumar against the orders of the Income Tax Officer (ITO), Ward-1, Fatehabad, and the CIT(A), which pertained to the Assessment Year 2012-13. The primary contention was the validity of the reassessment proceedings under Section 147 of the Income Tax Act, 1961, and the subsequent assessment order under Section 144, which the assessee argued were issued without proper legal basis and in violation of procedural mandates such as the non-mention of the Document Identification Number (DIN). The assessee also contested the additions made to his income, which were based on unexplained cash deposits and bank interest, arguing that these were not substantiated by the evidence and that his income was below the taxable limit. The Tribunal, after considering the submissions and the non-compliance of the assessee during the earlier proceedings, decided to remand the case for a fresh assessment, providing the assessee another opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669115 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: SURAJ BHAN NAIN; VIRTUAL MODE
• Keywords: Reassessment proceedings; Peak credit; Principle of natural justice; Reason to believe
• Section: 144; 68

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी मनोज क ुमार अŤवाल, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 111/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2012-13 Gulshan Kumar Village- Barsin, Fatehabad, Haryana-125050, India बनाम The ITO Ward-1, Fatehabad ˕ायी लेखा सं./PAN NO: BFWPK6125E अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Suraj Bhan Nain, Advocate (Virtual Mode) राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 23/06/2025 उदघोषणा की तारीख/Date of Pronouncement : 24/06/2025 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 22/11/2024 pertaining to Assessment Year 2012-13. 2. In the present appeal Assessee has raised the following grounds: 1. That the Ld. CIT(A), NFAC, Delhi [hereinafter referred as 'Ld. CIT(A)] had erred in law and facts of the matter by confirming the impugned Assessment Order passed on best judgement basis u/s 144 of the Income Tax Act, l96l (hereinafter referred as 'the act') without appreciating the fact that impugned assessment proceeding uls 147 of the act has been initiated by the Ld. lTO, Ward - l, Fatehabad (hereinafter referred as 'Ld. AO') without being in possession of 'reasons to believe' that certain income of the appellant had escaped assessment. As such, impugned Assessment Order deserves to be quashed being illegal and unjustified. 2. That the Ld. CIT(A) had erred in law and facts of the matter by upholding the validity of impugned Assessment Order without appreciating the fact that impugned assessment order has been passed by the Ld. AO without mentioning Document Identification Number i.e. DIN in the body of the said Assessment Order whereas, vide CBDT Circular No. l912019, the Ld. AO was duty bound to generate distinct DIN for said Assessment Order and shall mention the same on the body of said order. Accordingly, impugned Assessment Order being issued in gross contravention of binding CBDT Circular deserves to be quashed. 3. That the Ld. CIT(A) had ened in law and facts of the matter by confirming the addition of Rs. 10,37,500/- made by the Ld. AO on account of peak balance of cash deposits made during the period under consideration without appreciating the actual facts of the matter and material available on record. As such, impugned additions of Rs. 10,37,500/- made in gross disregard of material available on record deserves to be deleted. 2 4. That the Ld. CIT(A) had erred in law and facts of the matter by confirming the addition of Rs.4,612l- made by the Ld. AO on account of bank interest earned during the year without appreciating the actual facts of the matter and material available on record i.e. the taxable income of the appellant was below maximum amount not chargeable to tax. As such, impugned additions of Rs.4,612l- made in gross disregard of material available on record deserves to be deleted. 5. That the appellant uaves the right to amend, add, delete or withdrawing any of the Ground of Appeal during the course of the hearing 3. Briefly, the facts of the case are that the assessee Shri Gulshan Kumar, is an individual from Fatehabad, Haryana, did not file a return for A.Y. 2012-13, claiming income below the taxable limit. The AO reopened the assessment under Section 147, citing cash deposits of Rs. 15,37,500 as tangible evidence of escaped income. Despite issuing notices under Sections 148, 142(1), and a show-cause notice, the appellant did not respond. The AO treated Rs. 5,00,000 as explained but added Rs. 10,37,500 as unexplained under Section 68 and assessed total income at Rs. 10,42,210/- under Section 147/144 on 20.11.2019. 4. Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A). The CIT(A) dismissed the appeal, noting the assessee’s non-compliance during assessment and appellate proceedings. 5. Against the order of the Ld. CIT(A), the assessee preferred an appeal before the Tribunal. 6. During the course of hearing the Ld. Counsel for the Assessee submitted that the reassessment proceedings initiated under Section 147 are invalid due to the absence of a valid \"reason to believe,\" and that the assessment order passed under Section 144 is void ab initio for non-mention of the mandatory Document Identification Number (DIN), in violation of CBDT Circular No. 19/2019; further, the additions of Rs. 10,37,500/- and Rs. 4,612/- are unjustified as they were made without proper appreciation of evidence and despite the assessee's total income being below the taxable limit, and the assessee reserves the right to amend or add to the grounds at the time of hearing. 7. Per contra, the Ld. DR relied upon the orders of the lower authorities. 8. We have heard the rival contention and perused the material available on the record. We find that both the assessment and the first appellate proceedings were concluded ex parte due to non-compliance by the assessee. It is the settled 3 principle of natural justice that a reasonable opportunity must be granted to the assessee before deciding a matter on merits. Although repeated opportunities were granted, we are of the view that in the interest of substantial justice, one more opportunity should be afforded to the assessee to present his case before the Assessing Officer. 9. We accordingly deem it fit to remand the matter back to the file of the Assessing Officer with a direction to give a reasonable and effective opportunity to the assessee to present his case along with supporting documents. The assessee is directed to cooperate and not seek unnecessary adjournments. 10. We clarify that we have not expressed any opinion on the merits of the case and all issues are left open to be decided afresh by the Assessing Officer. 11. In the result, the appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 24/06/2025 Sd/- Sd/- मनोज क ुमार अŤवाल लिलत क ुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "