Case Law Details
Firoz Pasha Vs ITO (ITAT Delhi)
In the case of Firoz Pasha vs ITO, the Income Tax Appellate Tribunal (ITAT) Delhi dealt with an appeal concerning an unexplained investment of Rs. 29.32 lakh for the assessment year 2012-13. The investment was alleged by the tax authorities to be unexplained, falling under Section 69 of the Income Tax Act, which deals with unexplained investments. The Revenue’s argument was that the investment was made in two immovable properties during the financial year 2011-12. The Assessing Officer had added this sum to the assessee’s total income, following detailed discussions about the investment, which was recorded in a tabulated form in the order. However, the Commissioner of Income Tax (Appeals) (CIT(A)) did not provide a clear determination or detailed reasoning in the appellate order, which led to a lack of clarity in addressing the facts of the case.
The ITAT noted that the CIT(A)’s order failed to meet the requirements of Section 250(6) of the Income Tax Act, as there was no proper discussion or points of determination provided regarding the unexplained investment. This inadequacy in reasoning violated the principles of natural justice. As a result, the ITAT remanded the matter back to the CIT(A) for a fresh adjudication, with clear instructions to provide a detailed and reasoned order. The ITAT also emphasized that the responsibility for presenting and proving all relevant facts would rest with the taxpayer during the reassessment proceedings. The case was allowed for statistical purposes, and the matter was directed to be resolved with three effective opportunities for hearing.
This ruling highlights the importance of providing a detailed and reasoned judgment by the lower authorities, especially in cases involving unexplained investments. It also reiterates the right of the taxpayer to have a fair hearing with adequate opportunities to present evidence.
FULL TEXT OF THE ORDER OF ITAT DELHI
This assessee’s appeal for assessment year 2012-13 arises against DIN and order no. ITBA/NFAC/S/250/2023-24/1058320219(1), dated 29.11.2023 of the learned CIT(Appeals)/National Faceless Appeal Centre (INFAC), Delhi, in appeal no. CIT(A), Ghaziabad/11764/2019-20 in proceedings u/s 250 of the Income-tax Act, 1961, in short the “Act”.
2. Heard both the parties at length. Suffice to say, it emerges during the course of hearing that both the learned lower authorities have added the alleged unexplained investment u/s 69 of the Act amounting to Rs. 29.32 lakhs in assessee’s hands. Mr. Sharma vehemently argues in reiterating the Revenue’s stand that the assessee had been duly found to have made the impugned investment in twin immovable properties purchased in the relevant financial year 2011-12.
3. I next note that the learned Assessing Officer in detailed discussion at page 3 in para 3.4 has tabulated the assessee’s impugned twin investment, wherein it emerges that he had invested a sum of Rs. 29.32 lakh in the relevant financial year whereas the learned CIT(Appeals) in lower appellate findings in para 5.4 pages 6 & 7 have neither framed any point of determination nor there is any detailed discussion note there from, as contemplated u/s 250(6) of the Act. Faced with this situation, rather in the interest of natural justice, it is deemed appropriate to restore the assessee’s instant appeal back to the CIT(Appeals) for its afresh appropriate adjudication as per law, preferably within three effective opportunities of hearing subject to the rider that it shall be taxpayer’s responsibility only to plead and prove all the relevant facts in consequential hearing proceedings.
4. This assessee’s appeal is allowed for statistical purposes in very terms.
Order pronounced in open court on 13.11.2024.
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