Archana Pathak Shrivastava Vs ITO (ITAT Jabalpur)
Summary: The assessee, an individual working as a teacher in a government school, had not filed her return of income for AY 2018-19. The assessment was reopened under Section 147 of the Income-tax Act, 1961 on information that she had received salary income of ₹39,06,000/-. Following non-compliance with statutory notices, the Assessing Officer completed the assessment ex parte under Section 144 and assessed total income at ₹39,06,000/-. Although TDS was reflected in Form No. 26AS, no TDS credit was allowed. The CIT(A) sustained the addition. Before the Tribunal, the assessee contended that the material/information relied upon for making the addition had not been confronted to her, that she was not given an effective and meaningful opportunity to explain the material, and that TDS credit reflected in Form No. 26AS had not been granted. The Jabalpur ITAT observed that the appellate order did not satisfactorily demonstrate that the evidence relied upon by the assessee was examined and dealt with in a reasoned manner. Holding that an assessment could not be sustained merely on an adverse inference without reasonable opportunity to explain the facts and circumstances relied upon, the Tribunal set aside the impugned order and restored the matter to the Assessing Officer for fresh decision. The AO was directed to verify the TDS and give credit thereof in accordance with law after providing the assessee reasonable opportunity of being heard, with liberty to the assessee to furnish documentary evidence, explanations and other material in support of her claim. The appeal was allowed for statistical purposes.
The assessee, a government-school teacher, did not file her return for AY 2018-19. Based on information that she had received salary income of ₹39.06 lakh, the AO reopened the assessment under Section 147.
Following non-compliance with statutory notices, the AO completed an ex parte assessment under Section 144, assessing the entire ₹39.06 lakh as income. Although the salary and corresponding TDS appeared in Form 26AS, no TDS credit was granted because the assessee had not filed her return. The CIT(A) sustained the addition.
Before the Tribunal, the assessee contended that the material forming the basis of the addition was never confronted to her, no effective opportunity of hearing was given, and the consequential demand was wrongly computed without allowing the TDS credit appearing in Form 26AS.
The Jabalpur ITAT observed that:
- an assessment cannot rest merely on an adverse inference without giving the assessee an opportunity to explain the material relied upon;
- the CIT(A) had not examined the assessee’s evidence or adjudicated the controversy through a reasoned order; and
- the assessee’s claim for TDS credit required proper verification.
Accordingly, the Tribunal set aside the appellate order and restored the matter to the AO for fresh adjudication. The AO was specifically directed to verify and grant TDS credit in accordance with law after providing the assessee a reasonable opportunity of hearing.
List of Cases Discussed / Relied Upon
- T.S. Balaram, ITO v. Volkart Brothers,(1971) 82 ITR 50 (SC) — relied upon for the principle that a mistake apparent from the record must be an obvious and patent mistake and not one requiring a long-drawn process of reasoning.
- ACIT v. Saurashtra Kutch Stock Exchange Ltd.,(2008) 305 ITR 227 (SC) — relied upon for the principle that non-consideration of a binding decision of the jurisdictional High Court or Supreme Court can constitute a mistake apparent from the record capable of rectification.
FULL TEXT OF THE ORDER OF ITAT JABALPUR
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC) dated 10.03.2025 pertaining to the assessment year 2018-19. The assessee has raised the following grounds of appeal: –
“1. That learned NFaC was not justified in upholding the order of the Ld. AO in view of the fact that the Assessment) was illegal, void and without jurisdiction.
2. That the Ld AO and Appellate authority only on premises an opinion has made the addition without confronting it to the assessee. Due to lack of opportunity to represent the of the case, the assessment order must be quashed.
3. That on the facts and in the circumstances of the case the demand raised by the AO without giving credit of TDS amount as per 26AS is totally wrong and void.
4. That the Commissioner of Income-Tax (Appeals) erred in framing an Assessment without looking to the evidence produced before him is violation of principle of natural justice and without any determination on the merits of the case and hence the said order is illegal, void and without jurisdiction.
5. That addition of Rs.3906000/- towards taxable income under is unjustifiable.
6. The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of hearing of the appeal.”
2. Briefly stated, the facts of the case are that the assessee is an individual working as a teacher in a government school and did not file her return of income for the relevant assessment year. Subsequently, the case was reopened under section 147 of the Income-tax Act, 1961 (“the Act”, for short), on the basis of the information that the assessee had received salary income of Rs.39,06,000/-. Accordingly, the Assessing Officer (“AO”, for short) issued notice u/s 148 of the Act. In response to the statutory notices, there was no compliance on the part of the assessee. During the course of reassessment proceedings, the AO on verification of Form No. 26AS, noticed that the assessee had received salary income amounting to Rs.39,06,000/-. However, the assessee had not filed her return of income and, consequently, no credit of the TDS appearing in Form No. 26AS was allowed to her. In the absence of compliance, the AO proceeded to complete the assessment ex parte u/s 144 of the Act and assessed the total income of the assessee at Rs.39,06,000/-. Aggrieved by this, the assessee preferred an appeal before the Ld. CIT(A) who sustained the addition made by the AO. 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 impugned assessment order is illegal, void and contrary to the principles of natural justice. He further submitted that the Assessing Officer proceeded to make the addition of Rs.39,06,000/- merely on the basis of an opinion/information without confronting the relevant material to the assessee. Further, he submitted that the assessee was not given an effective and meaningful opportunity to explain the material relied upon by the Assessing Officer. Further, he drew my attention to the TDS reflected in Form No. 26AS and submitted that the assessee is legally entitled to credit of the TDS amount. He also submitted that the demand raised without granting such credit is excessive and cannot be sustained. Therefore, he submitted that, in the interest of justice, the matter may be restored to the file of the Assessing Officer for fresh adjudication after providing adequate opportunity to the assessee.
4. On the other hand, the Departmental Representative for Revenue opposed the submissions and submitted that the lower authorities have given sufficient opportunity to the assessee and the assessee ought to have submitted relevant explanation before the Assessing Officer.
5. I have heard the Ld. Representatives of the parties and perused the materials available on record. The primary grievance of the assessee is that the addition of Rs.39,06,000/- was made without confronting the assessee with the material/information relied upon by the Assessing Officer and without granting an effective opportunity to explain the same. It is noted that the impugned appellate order does not satisfactorily demonstrate that the evidence relied upon by the assessee was examined and dealt with in a reasoned manner. An appellate authority is required to adjudicate the grounds raised before it and deal with the material evidence having a bearing on the controversy. It is well settled that an assessment cannot be sustained merely on the basis of an adverse inference without affording the assessee a reasonable opportunity to explain the facts and circumstances relied upon against him. As regards the addition of Rs.39,06,000/-, I note that the assessee has disputed the very basis of the addition and has also contended that the relevant material was not confronted to him. Moreover, it is pointed out that the credit of taxes deducted at source is not given by the AO. Considering the totality of the facts and circumstances of the case, I deem it expedient, in the interest of substantial justice, to set aside the impugned order and restore the matter to the file of the AO for fresh decision. The Assessing Officer would verify the TDS and give credit thereof in accordance with law, after providing reasonable opportunity of being heard to the assessee. The assessee shall be at liberty to furnish all documentary evidence, explanations and other material in support of his claim. 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 21/08/2026.
