- Dipika Jagdish Wagh Vs ITO (ITAT Pune)
- Facts — Information on Cash, Jewellery & Property Transactions Triggered Reassessment
- Three Additions — Assessment Increased to ₹96.32 Lakh
- CIT(A) Sustains the AO’s Action
- ITAT — Appellate Proceedings Require Independent Consideration
- Natural Justice Prevails — One More Opportunity Granted
- What the ITAT Has — & Has Not — Decided
- Author’s Comment
Dipika Jagdish Wagh Vs ITO (ITAT Pune)
CIT(A) Cannot Simply Echo the AO – Additions u/s 69A, Estimated Expenses &; LTCG Restored Where Assessee’s Evidence Was Not Properly Considered
Summary:
The Pune ITAT dealt with a case where substantial additions relating to unexplained money u/s 69A, estimated disallowance of expenses & LTCG on sale of immovable property were sustained by the CIT(A) without recording proper findings on the documents & explanations furnished by the assessee during appellate proceedings. Holding that the CIT(A) had substantially proceeded on the findings of the AO without properly dealing with the assessee’s evidence, the Tribunal set aside the appellate order & restored the entire dispute to the CIT(A) for fresh adjudication.
Facts — Information on Cash, Jewellery & Property Transactions Triggered Reassessment
The assessee had originally filed her return for AY 2013-14 declaring total income of ₹49,88,930. Subsequently, the AO received information regarding certain financial transactions involving undisclosed cash, jewellery & purchase/sale of immovable property, which according to the Department had not been disclosed in the return.
On the basis of such information, the AO formed a belief that income had escaped assessment & issued notice u/s 148 on 31.03.2021. In response, the assessee filed her return on 30.04.2021.
Thereafter, notices u/s 142(1) were issued calling upon the assessee to explain the sources of cash, jewellery & other transactions. Although initially there was non-compliance, the assessee ultimately furnished submissions in response to the show-cause notice. The AO, however, was not satisfied with the explanations.
Three Additions — Assessment Increased to ₹96.32 Lakh
The reassessment resulted in three substantial adjustments.
The AO made an addition of ₹26,58,871 as unexplained money u/s 69A, an estimated disallowance of other expenses of ₹10,43,656, & computed LTCG on sale of immovable property at ₹43,00,000.
Consequently, total income was assessed at ₹96,32,950, with the assessment order being passed u/s 143(3) r.w.s. 147 and 144B on 27.03.2022.
CIT(A) Sustains the AO’s Action
The assessee carried the matter in appeal before the CIT(A)/NFAC.
The CIT(A) considered the grounds of appeal, statement of facts, assessee’s submissions & findings recorded by the AO, but ultimately sustained the AO’s action & dismissed the appeal. The assessee therefore approached the Pune ITAT.
The assessee’s principal grievance before the Tribunal was not merely against the quantum of the additions. It was that the CIT(A) had overlooked the submissions & supporting details furnished in response to notices during the appellate proceedings.
ITAT — Appellate Proceedings Require Independent Consideration
The Tribunal examined the record & found substance in the assessee’s grievance.
It specifically noted that the CIT(A) had not provided proper opportunity & had failed to appropriately consider the documents & information produced in support of the assessee’s claim.
More importantly, the Tribunal recorded that, prima facie, the CIT(A) had proceeded on the findings of the AO, whereas there were no proper findings on the submissions/evidence filed by the assessee during appellate proceedings.
This observation is significant because the role of the CIT(A) is not merely to reproduce or affirm the conclusions reached in the assessment order. Where an assessee places explanations, documents & evidence before the appellate authority, those materials require proper consideration followed by reasoned findings.
An appellate remedy loses much of its significance if the assessee’s evidence is placed on record but the appellate order does not meaningfully deal with it.
Natural Justice Prevails — One More Opportunity Granted
Considering the facts & circumstances & applying the principles of natural justice, the ITAT held that the assessee deserved another opportunity to substantiate her case.
Accordingly, the Tribunal set aside the order of the CIT(A) & restored the disputed issues to the CIT(A) for fresh adjudication.
The CIT(A) was specifically directed to provide the assessee with adequate opportunity of being heard & an opportunity to file additional evidence. At the same time, the Tribunal directed the assessee to cooperate by furnishing the necessary information so that the appeal could be disposed of expeditiously.
Thus, the appeal was allowed for statistical purposes.
What the ITAT Has — & Has Not — Decided
Importantly, the Tribunal has not deleted the addition of ₹26.58 lakh u/s 69A, the estimated expense disallowance of ₹10.43 lakh or the LTCG computation of ₹43 lakh.
Nor has it expressed any final view on whether the assessee’s explanations regarding cash, jewellery or immovable property transactions are factually correct.
The relief is essentially procedural but nevertheless important — the assessee has obtained a fresh appellate hearing, with the CIT(A) now required to examine the material & additional evidence and adjudicate the issues afresh.
Author’s Comment
The decision reiterates an important feature of first appellate proceedings — CIT(A) is an appellate adjudicator, not merely a confirming authority for the AO. Once documents, explanations & evidence are placed before the CIT(A), particularly in relation to u/s 69A, estimated expenditure & capital gains, the appellate order should disclose proper application of mind to such material.
At the same time, this order should not be read as laying down any proposition on the merits of the three additions, since the Tribunal has expressly remanded the matter instead of adjudicating their correctness.
The practical lesson is equally relevant for assessees: when another opportunity is granted on grounds of natural justice, it should be utilised by furnishing a complete documentary trail & issue-wise reconciliation before the CIT(A).
In short, an appeal cannot become a photocopy of the assessment order – evidence filed before the CIT(A) deserves consideration, discussion & a reasoned finding.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT PUNE
The assessee has filed the appeal against the order of CIT(A)/NFAC, Delhi passed u/sec 147 r.w.s. 144 and 144B and 250 of the Income Tax Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) in sustaining the additions made by the Assessing Officer.
2. The brief facts of the case are that, the assessee has filed return of income for the A.Y. 2013-14 disclosing total income of Rs. 49,88,930/-. The Assessing Officer has received information that the assessee has under taken certain financial transactions pertaining to undisclosed cash, jewellary, and sale and purchase of immovable property and was not disclosed in the return of income filed. The Assessing Officer (A.O) has reason to believe that the income has escaped assessment and with the due process of law issued notice under Section 148 of the Act on 31.03.2021. In response to notice, the assessee has filed return of income on 30.04.2021 and subsequently, notice under Section 142(1) of the Act was issued on the various dates to explain the sources of cash and jewellery and other requisite information and there was no compliance. Finally the A.O has issued a show cause notice and the assesse has filed the submissions referred at Page3 and 4 of the order. Whereas the A.O was not satisfied with the explanations and dealt on the provisions of the Act and made addition of (i)Unexplained money u/sec69A of the Act of Rs.26,58,871/-(ii) disallowance of other expenses on estimated basis of Rs.10,43,656/- and (iii) Long term capital gains on sale of immovable property of Rs.43,00,000/-. Finally assessed the total income of Rs.96,32,950/- and passed the order under Section 143(3) r.w.s. 147 and 144B of the I.T. Act dated 27.03.2022.
3. Aggrieved by the order, the assessee has filed an appeal with the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, statements of facts, submissions and finding of the A.O but sustained the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon’ble Tribunal.
4. At the time of hearing, the Ld. AR submitted that CIT(A) has erred in confirming the action of the Assessing Officer, overlooking the submissions and details filed in compliance to the notices issued in the appellate proceedings and prayed for allowing the appeal. Per contra, the Ld.DR supported the order of the CIT(A).
5. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.AR that the CIT(A) has erred in sustaining the additions overlooking the factual aspects and material information filed in the hearing proceedings. The CIT(A) has not provided proper opportunity and has not considered the documents and information supporting the claim of the assesse. Prima-facie, the CIT(A) has dealt on the findings of the AO and there are no proper findings on the submissions/evidences of the assessee filed in the proceedings and has not allowed the grounds of appeal. We considering the facts, circumstances and principles of natural justice shall provide with one more opportunity of hearing and accordingly set aside the order of the CIT(A) and restore the disputed issue to the file of the CIT(A) for afresh adjudication and the CIT(A) shall provide adequate opportunity of being heard to the assessee to file additional evidences and the assessee should also cooperate in submitting the information for early disposal of appeal.. And the grounds of appeal of the assessee are allowed for statistical purpose.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes
Order pronounced in the open Court on 03rd September, 2026.
