VEERATHAM SACHDEV,NEW DELHI V. DCIT CIRCLE INTERNATIONAL TAXATION, NEW DELHIQ

MA 371/DEL/2024

AI Insights

The case involves Veeratham Sachdev, the appellant, who sought rectification of an earlier ITAT order concerning the assessment year 2016-17. The original dispute centered on unexplained investments in SBI Mutual Funds, which the AO had deemed unexplained without the assessee's participation in the proceedings. The DRP had directed the AO to examine the creditworthiness of the assessee's father, from whom significant funds were received, but did not allow further inquiries or opportunities for the assessee to present additional evidence. The assessee's application to the ITAT sought to include this evidence in the record and to allow a hearing opportunity, which was initially overlooked. The Tribunal's decision to modify its earlier directions was based on the need to ensure a fair hearing and proper consideration of all relevant evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22926 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: S. KRISHNAN; HARSHIT; WAY OF ISSUE OF NOTICE.
• Keywords: Opportunity of being heard; Sale consideration of property below Jantri Value

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “Friday-D”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER MA NO. 371/DEL/2024 (IN ITA NO. 390/DEL/2023) A.YR. 2016-17 Veeratham Sachdev, VS. DCIT, Circle International 5 GM Mansion (14th floor), Taxation, Delhi Sukhumvit Soi 30, 4th Floor, Civic Centre, Bangkok-10110 Minto Road, New Delhi Thailand Also C/o Shri S. Krishnan, Adv. 112-A, Hans Bhawan, 1, Bahadurshah Zafar Marg, New Delhi – 110 002 (PAN: CIKPS1050C) (Appellant) (Respondent) Assessee by : Sh. S. Krishnan, Adv. & Sh. Harshit Chauhan, Adv. Department by : Sh. Sahil Kumar Bansal, Sr. DR. Date of Hearing : 14.02.2025 Date of pronouncement : 19.03.2025 ORDER PER SUDHIR PAREEK, JM: By way of this Miscellaneous Application Assessee seeks rectification/modification in the Order dated 31.5.2024 passed in ITA No. 390/Del/2013 relevant to assessment year 2016-17. 2 2. At the time of hearing, Ld. Counsel for the assessee has reiterated the contentions raised in the instant Misc. application filed by the assessee, the contents thereof are reproduced as under:- “1. Vide order dated 31.05.2024 in ITA No. 390/Del/2023, the Hon’ble Tribunal has passed an order or remit, directing the AO to pass a speaking order after following the directions of DRP. Para 10 of the combined order in the assessee’s case for AY 2013-14 & AY 2015-16 is the operative part, forming subject matter of this present application. 2. When the appeals were listed for hearing before the Hon'ble Tribunal on 30.05.2024, application for adjournment was moved, seeking time for filing of paper book. A copy of the said application forms ANNEXURE - 01 to this application. 3. This application was moved because: a. Vide finding at Para 9 of the assessment order dated 18.01.2023 for AY 2016-17 (Page 5), the AO held that investments made by the Assessee in SBI Mutual Funds remained unexplained. The said proceedings however had been conducted without the Assessee being joined. b. Before DRP, the Assessee had duly explained source of the investment, as noted at Page 6 of the assessment order. Copies of the Assessee's NRE account were provided, showing the source of the mutual fund investment. 3 c. Vide finding at Para 4 of directions dated 25.11.2022, DRP directed the AO to examine creditworthiness of the Assessee's father, Mr. Sarabjit Singh Sachdev, from whom a sum of Rs.7,61,95,083.48/- had been received by the Assessee on 17.02.2016. However, DRP also directed that AO need not conduct any fresh enquiry, or grant any additional opportunity (Page 5 of assessment order). d. Given that AO had not sought any details as to creditworthiness of the Assessee's father, the documents on the basis of which DRP's directions were to be given effect, were not on the AO's record, and given that direction to examine the same was evinced at the fag-end of proceedings before DRP, the Assessee had no opportunity to have them brought on record. The Assessee's rejoinder before DRP, seeking time to file details is duly referred at Page 4 of the assessment order. e. It is for this reason that the Assessee sought time before the Hon'ble Tribunal on 30.05.2024, seeking time to file the said evidence. f. The evidence itself comprises of: a. Bank statement of the Assessee's father, Mr. Sarabjit Singh Sachdeva, b. Details of FDR held by the Assessee's father, and closure thereof, and 4 c. Details of transfer of the said proceeds to the Assessee's account. g. Since while issuing directions, DRP did not direct any evidence to be filed, and has permitted AO to proceed without providing any further opportunity, the resultant exercise would also be conducted to verify a fact without the evidence being on record. Hasten 4. The evidence itself goes to the root of the matter, and the Assessee, through the present application, seeks modification of directions issued by the Hon'ble Tribunal at Para 10 of the order dated 31.05.2024, in so far as it relates to AY 2016-17, praying for / directions to the AO to examine the evidence as forming ANNEXURE - 02 to the present application, and to return a finding in accordance with law.” 3. Ld. DR for the Revenue id not raise any objection for the aforesaid contention of the ld. AR as made in the misc. application. 4. We have heard the rival contentions and perused the records especially the prayer made by the assessee in para no. 4 of the instant misc. application, wherein the assessee seeks modification of directions issued by the ITAT at paga 10 of the order dated 31.05.2024 in ITA No. 390/Del/2023 (AY 2016-17), in so far as it relates to AY 2016-17, praying for directions to the AO to examine the evidence as forming Annesure-02 to the present application, and to return a finding in accordance with law. At the time of hearing, Ld. AR prayed that that direction 5 may also be issued to the to the AO for grant an opportunity of being heard to the assessee by way of issue of notice. For the sake of convenience, we are reproducing hereunder the finding of the tribunal given at paga 10 of the order dated 31.05.2024 passed in ITA No. 390/Del/2023 (AY 2016-17), “10. Since the directions of the DRP have not been followed by the AO, we deem it fit and proper that the interest of justice would be served by remitting the matter to the file of the AO to pass a speaking order duly following the directions of the Ld. DRP.” 4.1 Upon careful consideration, we find considerable cogency in the contentions of the Ld. AR made in the instant misc. application by the assesssee, which in our opinion, needs to be rectified by modifying the directions of para 10 of the Tribunal’s order dated 31.5.2024 passed in ITA No. 390/Del/2023 (AY 2016-17). Accordingly, we modify the para 10 of the Tribunal’s order dated 31.5.2024 as under which may be treat as part and parcel of the Tribunal’s order dated 31.05.2024. “10. Since the directions of the Ld. DRP have not been followed by the AO, we deem it fit and proper that the interest of justice would be served by remitting the matter to the file of the AO to pass a speaking order duly following the directions of the Ld. DRP, after giving an opportunity of being heard to the assessee by way of issue of notice.” 4.2 In view of the aforesaid, we direct the AO to follow the aforesaid modified directions, in accordance with law. As a result, the prayer made by the Assessee in the instant misc. application is hereby accepted. 6 5. The rest of the contents of the Tribunal’s order dated 31.05.2024 passed in ITA No. 390/Del/2023 (AY 2016-17) will remain unchanged. 6. In the result, the Misc. Application filed by the Assessee is allowed in the aforesaid manner. Order pronounced on 19.03.2025. Sd/- Sd/- [SHAMIM YAHYA] [SUDHIR PAREEK] ACCOUNTANT MEMBER JUDICIAL MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT By Order, Assistant Registrar, ITAT, Delhi Benches "