SARITHA SHARMA,KARIMNAGAR V. ITO, WARD-2, KARIMNAGAR

ITA 81/HYD/2025

AI Insights

This case involves an appeal by Ms. Saritha Sharma against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which had dismissed her appeal against the assessment order passed by the Learned Assessing Officer. The assessment order treated an investment in land purchase as unexplained under section 69 of the Income Tax Act, 1961, due to non-verification of the return of income and non-disclosure of the source of investment. The Tribunal found that the assessee was not given sufficient opportunity to present her case and decided to remand the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28649 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SM-A
• Assessment Year: 2016-2017
• Other Referred Cases: National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VISHNU PRIYA
• Assessee Lawyers: T. CHAITANYA KUMAR
• Keywords: Set aside; Unexplained investment; Principle of natural justice
• Section: 144

Judgement Text

" आआआआ आआआआआआ आआआआआआ, आआआआआआआआ आआआ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SM-A’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.81/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2016-17) Ms. Saritha Sharma, Karimnagar. PAN : AUAPS8320B Vs. Income Tax Officer, Ward-2, Karimnagar. (Appellant) (Respondent) नननननननननन नननननन/Assessee by: Shri T. Chaitanya Kumar, Advocate नननननन नननननन/Revenue by: Ms. Vishnu Priya, SR-DR नननननन नन ननननन/Date of hearing: 06/03/2025 ननननन नन ननननन/Pronouncement: 19/03/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Ms. Saritha Sharma (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 28.11.2024 for the A.Y. 2016-17. ITA No.81/Hyd/2025 2 2. The assessee has raised the following grounds : 3. The assessee has also raised the following additional grounds : ITA No.81/Hyd/2025 3 4. Learned AR submitted that additional ground so filed are admissible in view of judgment rendered by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The prayer for admission of additional ground noted above which are not in memorandum of appeal are being admitted for adjudication in terms of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that objections raised in ITA No.81/Hyd/2025 4 additional ground are legal in nature for which relevant facts are stated to be emanating from the existing records. 5. The brief facts of the case are that the assessee is an individual, e-filed her Return of Income (“ROI”) for the A.Y. 2016-17 on 25.04.2017 declaring total income of Rs.2,68,470/-. However, the assessee had not verified the said return. Consequently, the ROI was treated as invalid. Subsequently, the Learned Assessing Officer (“Ld. AO”) came to know that the assessee had purchased a land for Rs.36,30,000/- in cash. As the assessee had not disclosed the source of investment, notice u/s.148 of the Income Tax Act, 1961 (“the Act”) was issued to the assessee on 09.12.2019. The assessee did not file any ROI in response to the notice issued by the Ld. AO. After issuing notice u/s. 142(1) of the Act and considering the submissions of the assessee, the Ld. AO completed the assessment u/s.147 r.w.s. 144 r.w.s. 14B of the Act on 24.09.2021 treating the total investment made by the assessee in purchase of land as unexplained investment u/s.69 of the Act and made the addition of Rs.36,30,000/- in the hands of the assessee. 6. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee did not respond to the notices issued by the Ld. CIT(A). Consequently, the Ld. CIT(A) dismissed the appeal of the assessee. 7. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The first argument of the Learned Authorised Representative (“Ld. AR”) was that, no notice u/s.143(2) of the Act was issued by the Ld. AO to the assessee, therefore, the order passed by the Ld. AO without issue of notice u/s.143(2) of the Act is bad in law and is liable to be quashed. On perusal of assessment order, we found that original ROI filed by the assessee on 25.04.2017 was ITA No.81/Hyd/2025 5 treated as invalid by the Ld. AO due to non-verification. Further, no ROI was filed by the assessee in response to the notice issued u/s.148 of the Act. Hence, there was no valid ROI filed by the assessee. Accordingly, in the absence of any ROI, the question of issue of notice u/s.143(2) of the Act does not arise. Therefore, the contention of the assessee that the assessment order passed by the Ld. AO is bad in law in absence of issue of notice u/s.143(2) is not sustainable and hence rejected. 8. In their alternate argument, the Ld. AR submitted that both the Revenue Authorities did not provide sufficient opportunity to the assessee to submit their explanations/evidence in support of the additions made by the Ld. AO. It is further contended that both the Revenue Authorities have passed the order without providing proper opportunity. The Ld. AR also submitted that the assessee does not stand to gain by allowing the appeal to be disposed of without any documentary evidence being produced and it is only due to the reasons beyond the control of the assessee, the assessee could prosecute his case before both the Revenue Authorities. By consolidating all the grounds, he further submitted that given an opportunity, the assessee is now ready to produce all such details and conduct the proceedings diligently and get the matter disposed of on merits. 9. Per contra, Ld. DR placed heavy reliance on the orders of the Revenue authorities and submitted that, sufficient opportunity has already been given by the Revenue authorities, but the assessee failed to avail the same. He opposed the grant of further opportunity to the assessee. 10. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It could be seen from the orders of both the Revenue Authorities that in spite of many ITA No.81/Hyd/2025 6 opportunities given, the assessee failed to prosecute his case on merits. It is a fact that the assessee does not stand to gain by not producing the necessary information/documents and prosecute his case on merits. Be that as it may, now the assessee is ready to produce all information/documents and get the matter disposed of on merits. The highest that would happen by allowing an opportunity to the assessee is that a cause would be decided on merits. With this view of the matter and considering the principle of natural justice, we are of the view that fresh opportunity should be given to the assessee. Accordingly, we set aside the impugned order and restore the issue to the file of the Ld. AO for passing a fresh order on merits after affording the opportunity of hearing to the assessee. Grounds of appeal are answered accordingly. 11. In the result, the appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on 19th Mar., 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 19.03.2025. * Reddy gp Copy of the Order forwarded to : 1. Ms. Saritha Sharma, E Block, FlatNo.101, Aditya Empress Towers, Shaikpet Nala, Tolichowki, Golconda Post, Hyderabad-500 008 2. ITO, Ward-2, Karimnagar. 3. Pr. CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard File. BY ORDER, ITA No.81/Hyd/2025 7 "