Brig. (Retd.) Jitendra Kumar Narang Vs ITO (ITAT Pune)
ITAT Pune held that rectification order under section 154 of the Income Tax Act passed without providing an opportunity of being heard is bad-in-law and deserved to be set aside. Accordingly, appeal of assessee allowed.
Facts- AO on the basis of annual information return i.e. AIR found that the assessee has invested Rs.2,40,000/- in Sundaram BNP Paribas on 02.04.2006 and Rs.4 lakh in SBI mutual fund on 11.04.2006 which amounts in all to Rs.6,40,000/-. According to AO, the salary income of the assessee was only Rs.5,36,802/- and after deducting, house loan and interest thereon, investment u/s VI-A, payment of income tax and household expenses the assessee was left with only Rs.1,10,000/- of savings which could be said to be invested by the assessee in the above mutual funds and therefore AO was of the view that income of Rs.5,30,000/- ( 640,000 110,000) has escaped from assessment.
After discussion and verification of the documents, AO completed the assessment u/s 143(3) r.w.s. 147 of the IT Act vide order dated 23.03.2015 on a total income of Rs.5,64,290/- as against the income returned by the assessee at Rs.4,86,993/-. Subsequently, order dated 11.09.2017 was passed u/s 154 of the IT Act wherein order dated 23.03.2015 was revised and further addition of Rs.5,30,000/- on account of purchase of mutual fund was made to the income of the assessee and accordingly the revised income was computed at Rs.10,94,290/- as against the original income assessed under section 143(3) r.w.s. 147 of the IT Act at Rs.5,64,290/-.
