NISAR MALIK,NEW DELHI V. ITO WARD NO- 31(5), NEW DELHI

ITA 1507/DEL/2024

AI Insights

The case involves Nisar Malik, the appellant, contesting an order from the CIT(A) which confirmed additions made by the Assessing Officer (AO) regarding unexplained income from sales. The AO had reopened the assessment for AY 2010-11 under Section 147 of the Income Tax Act, 1961, after discovering that the assessee had not filed a return for a property sale worth Rs. 64,95,000. During reassessment, discrepancies in reported sales and bank credits led the AO to add Rs. 57,35,812 as business receipts, applying a higher profit margin than reported by the assessee. The CIT(A) upheld these additions in an ex parte order. The Tribunal found procedural fairness was not fully observed and thus remitted the matter back to the CIT(A) for a comprehensive re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 295069 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Business income; Opportunity of being heard
• Section: 147; 148; 133(6)

Judgement Text

"1 ITA no. 1507/Del/2024 A.Y. 2010-11 Nisar Malik v. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI Ms. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 1507/DEL/2024 Assessment Year: 2010-11 Nisar Malik, 80/6 A, Second Floor, Malviya Nagar, New Delhi-110017. PAN- ATCPM 5101 H Vs ITO Ward-31(5), New Delhi. APPELLANT RESPONDENT Assessee represented by Shri V. Rajkumar, Adv.& Shri Rakesh Jha, CA Department represented by Sh. Sanjay Kumar, Sr. DR Date of hearing 27.02.2025 Date of pronouncement 23.04.2025 O R D E R PER Ms. MADHUMITA ROY, JM: 1 The instant appeal filed by the assessee is directed against the order dated 25.05.2023 passed by the Ld.CIT(A)NFAC, Delhi, arising out of the assessment order passed by the ITO, Ward 31(5), New Delhi dated 28.12.2017 under Section 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2010-11. 2. Regarding the delay of 254 days involving in filing of this appeal, an application for condonation of delay has been preferred by the assessee, wherein it has been stated that the assessee relied on his accountant for assistance in tax matters including the filing of appeal. The accountant had provided his own contact details for correspondence at the time of filing of appeal before CIT(A), 2 ITA no. 1507/Del/2024 A.Y. 2010-11 Nisar Malik v. ITO however had left the office without informing the appellant, consequently the appellant was unaware of notices issued to him as these were sent to accountant’s e-mail id. Later on appellant took the necessary steps to access the e-filing portal through Chartered Accountant who after logging into the portal informed to the appellant that NFAC had already passed an appellate order on 25.05.2023. Considering the application for condonation of delay, reasons appear to be genuine and, therefore, the delay is condoned. 3. Briefly stated, the case was reopened u/s 147 of the Act on getting information through NMS that during financial year relevant to assessment year 2009-10, the assessee has made sale of immovable property of Rs. 64,95,000/-, however has not filed return of Income. Therefore, notice was issued on 29.03.2017 u/s 148 of the Act after recording reasons and obtaining approval from the PCIT, Delhi-11. However, during the course of assessment proceedings, AO on receipt of bank statements of assessee, from Bank of India & Central Bank of India u/s 133(6) of the Act, found that the amount of Rs. 76,88,252/- &Rs.27,20,560/- were credited therein. But the assessee had shown total turnover/sales amounting to Rs. 39,25,000/- in his return of income for A.Y. 2010-11, thus the AO vide note sheet dated 18.12.2017 issued a show cause as to why the difference of Rs. 64,83,812/- [Rs. 76,88,252/- (+) Rs. 27,20,560/- (-) Rs. 39,25,000/-] may not be considered as assessee’s sale during the year and added back to his income. In response thereto, assessee replied on 22.12.2017, however, the AO having partly satisfied from the reply to the extent of sum of Rs. 7,48,000/- representing contra entries resulting in escalation of total credits in bank account and proceeded to treated a sum of Rs. 57,35,812/- [Rs. 69,83,812/- - Rs. 7,48,000/-] as business receipts. Thus he made the addition of Rs. 8,60,372/- being 15% of Rs.57,35,812/-, 3 ITA no. 1507/Del/2024 A.Y. 2010-11 Nisar Malik v. ITO as in his opinion, profit margin in construction business is comparatively higher than the profit shown at the rate of 8% by the assessee. 4 The First Appellate Authority has confirmed the aforesaid addition made by AO in ex parte order since despite several opportunities given to the assessee/appellant nobody represented before him. 5. Thus, having heard the ld. Counsels appearing for the parties and having regard to the facts and circumstances of the case, in order to prevent the miscarriage of justice, I dispose of this appeal by remitting the issue to the Ld. CIT(A), to deal with the same afresh and to pass orders accordingly, upon granting an opportunity of being heard to the assessee and upon considering the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter. 6. In the result, the appeal of the assessee in ITA No. 1507/Del/2024 is allowed for statistical purposes. Order pronounced in open court on 23.04.2025. Sd/- (Ms. MADHUMITA ROY) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "