Samarttha Developers Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune addressed an appeal filed by Samarttha Developers against an order by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi, which had confirmed an addition of over Rs. 30 crore by the Assessing Officer (AO) as unexplained investment under Section 69 of the Income Tax Act, 1961, for the assessment year 2015-16. The AO had reopened the assessment after the assessee, a partnership firm, purchased multiple immovable properties but failed to file an income tax return. Despite the issuance of notices under Sections 148 and 142(1) of the Act, the assessee did not comply, leading the AO to complete the assessment ex-parte, adding the purchase cost and stamp duty as unexplained investment. The CIT(A) / NFAC also dismissed the assessee’s appeal ex-parte due to their non-appearance despite multiple opportunities.
Before the ITAT, the assessee’s counsel argued that both lower authorities had passed ex-parte orders and requested an opportunity to present their case, stating that the entire investment was funded through proper banking channels from a sister concern and could be substantiated with documentary evidence. The Departmental Representative (DR) argued for upholding the CIT(A)’s order, emphasizing the assessee’s consistent failure to respond to statutory notices. While acknowledging the assessee’s negligence and imposing a cost of Rs. 5,000, the ITAT, in the interest of justice, decided to restore the matter to the AO. The Tribunal directed the AO to grant one final opportunity to Samarttha Developers to substantiate their investment with necessary details and to decide the issue based on facts and law. The assessee was strictly instructed to make their submissions on the appointed date without seeking any adjournment, failing which the AO would be at liberty to pass an appropriate order. Consequently, the assessee’s appeal was allowed for statistical purposes.
