RAJ KUMAR SIRWANI,MANDLA V. INCOME TAX OFFICER, MANDLA WARD, MANDLA, MANDLA

ITA 37/JAB/2024

AI Insights

This case involves an appeal by the assessee, Raj Kumar Sirwani, against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), which confirmed an addition to the assessee's income for the assessment year 2015-16. The primary contention was the ex-parte nature of the NFAC's decision and the unjustified additions made to the assessee's income concerning unexplained investments in immovable properties. The Tribunal found that the assessee was not given adequate opportunity to present his case or to substantiate his claims regarding the sources of investment in the properties, which led to the decision to set aside the previous orders and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705659 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK BHURA
• Assessee Lawyers: H.S. MODH
• Keywords: Set aside; Corroborative evidences; Unexplained investment; Principle of natural justice; Source of fund
• Section: 147; 148; 142(1); 56(2)(vii)(b)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH “DB”, JABALPUR BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI, NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No. 37/JAB/2024 Assessment Year: 2015-16 Raj Kumar Sirwani Pamnani Chowk, Subhash Ward, Madhya Pradesh- 481661. v. Income Tax Officer, Mandla Income Office, Mandla, Madhya Pradesh-481661. PAN:AUSPS7713E (Appellant) (Respondent) Appellant by: Dr. H. S. Modh, Adv. Respondent by: Shri Alok Bhura, Sr. CIT(DR) Date of hearing: 20 05 2025 Date of pronouncement: 30 06 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 29.01.2024 pertaining to the assessment year 2015-16. The assessee has raised the following grounds of appeal: - “1. That the Ld. National Faceless Appeal Centre (NFAC) has grossly erred in facts and circumstances of the case to pass ex-parte order. 2. That the NFAC has grossly erred in facts and circumstances of the case to confirmed the income atRs.29,02,790/- against the returned income at Rs.3,17,790/-. 3. That the addition made for Rs.7,62,500/- on account of provision of Section 56(2)(vii)(b) of IT Act, 1961, is unjustified. 4. That the addition confirmation of purchase of immovable property at Rs.5,91,550/- considered unexplained investment is unjustified. ITA No.37/JAB/2024 Page 2 of 4 5. That the addition confirmation of purchase of immovable property at Rs.12,32,500/- considered unexplained investment is unjustified. 6. That the assessee craves leave to raise any other ground/s on or before the date of hearing to prove that the order is bad.” 2. The facts giving rise to the present appeal are that in this case the assessment was re-opened u/s 147 of the Income Tax Act, 1961 (“the Act”, for short). In response to the notice u/s 148 of the Act to the assessee, he filed his return of income on 25.08.2019, declaring total income at Rs.3,28,920/- and net income at Rs.3,16,790/- after having claimed deduction under Chapter-VI-A of the Act. During the course of assessment proceedings, various queries u/s 142(1) of the Act were issued to the assessee for seeking explanation in respect of the source of funds used in purchase of immovable property. The Assessing Officer in the absence of proper reply proceeded to make addition of Rs.25,86,000/- and assessed income at Rs.29,02,790/- u/s 147/148 of the Act. Aggrieved by this order, the assessee preferred appeal before the Ld. CIT(A) who also dismissed the appeal exparte to the assessee. Now the assessee is in appeal before this Tribunal. 3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the assessee was not afforded sufficient and adequate opportunity to represent his case. The assessee in fact had filed certain information before the Assessing Officer. The Assessing Officer without verifying the same proceeded to make impugned addition and the Ld. CIT(A) also dismissed the appeal of the assessee without adverting to the grounds on merits. He submitted that non-consideration of submissions has seriously prejudiced the assessee. He submitted that had the ITA No.37/JAB/2024 Page 3 of 4 authorities below considered the submissions in right perspective question of making addition would not have arisen. 4. On the other hand, the Ld. Departmental Representative (DR) has filed an application for seeking adjournment. The reasons stated in the application are found not sufficient for granting the adjournment, hence, the adjournment is hereby declined. The Ld. DR supported the orders of the lower authorities and contended that it was incumbent upon the assessee to explain the source of investment made in the immovable property. He submitted that for want of any supporting evidence and proper explanation by the assessee. The AO was justified in making addition. He contended that the onus is on the assessee to explain source of investment made in the immovable property. 5. We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the authorities below have not considered the explanation offered by the assessee. The assessee ought to have been given opportunity to explain the source of investment which could be verified independently by the assessing authority. In the absence of this exercise, the orders passed authorities below cannot be sustained. Therefore, looking to the totality of the facts and the material placed before us, we are of the considered view that to sub-serve the principles of natural justice, assessee should be given proper opportunity to represent his case effectively. We hereby, set aside the impugned orders and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving proper opportunity to the ITA No.37/JAB/2024 Page 4 of 4 assessee. Grounds of appeal of the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/06/2025. Sd/- Sd/- [NIKHIL CHOUDHARY] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 30/06/2025 Vijay Pal Singh, (Sr. PS) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT (Judicial) 4. The PCIT 5. DR, ITAT, Jabalpur 6. Guard File By order // True Copy// Assistant Registrar ITAT, Jabalpur "