Miteshkumar Dayaljibhai Pabari Vs ACIT (ITAT Rajkot)
The assessee, an NRI based in the USA, faced addition of ₹78.69 lakh as unexplained investment u/s 69 r.w.s. 115BBE for purchase of an Ahmedabad flat. The AO rejected explanations of foreign savings, parental contribution & housing loan, citing insufficient evidence. The DRP dismissed assessee’s objections solely due to a one-day delay & non-filing of Form 35A.
ITAT observed that such a minor delay should not defeat substantive justice & that the assessee was denied proper opportunity both before AO & DRP. Citing principles of natural justice, the Tribunal condoned the delay & restored the matter to the DRP for fresh adjudication after giving due opportunity.
Held: DRP directed to re-decide case on merits; assessment u/s 147 r.w.s. 144C(3) set aside.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
Captioned appeal filed by the assessee, pertaining to assessment year 2020-21, is directed against the final order passed by the assessing officer dated 26.05.2025 under section 147 r.w.s. 144C(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. Grounds of appeal raised by the assesse are as follows:
(1) Learned A.O. erred in law as well facts in making addition of Rs. 78,69,694/- as unexplained investment u/s 69 r.w.s 115BBE and passing order u/s 147 r.w.s. 144C(3) of the Act and raised huge demand of Rs. 1,25,24,430/-. Hon. DRP not considered the objection, not verified the submission, not given proper opportunity to being heard and rejected the objection application on the ground of minor delay and non-submission of form, even the not taxable income and even provided the explanations with necessary details, explanation and supporting documents. The passed order is erroneous, against the principle of nature of justice and against the provision of law, liable to quash and set aside.
(2) Learned A.O. erred in law as well facts by initiating proceeding u/s 148. The notice is time barred, issued without Jurisdiction, rendering the proceedings invalid ab initio which is erroneous, unjust, unfair, illegal, against the provision of law. The order is liable to quash and set aside.
(3) AO is erred in initiating penalty proceedings u/s 274 r.w.s. 271AAC of the Act. The proceedings is liable to quash.
(4) Learned A. O. erred in law as well facts by not giving effective opportunity of being heard. The passed order is erroneous, against the principle of nature of justice and against the provision of law. The order is liable to be quashed and set aside.
The appellant craves leave to add, alter or withdraw any of the grounds of appeal.”
3. Facts of the case, which can be stated quite shortly are as follows: For the assessment year (A.Y.) 2020-21, the assessee has not filed return of income u/s 139(1) of the I.T Act, 1961. Subsequently, the case was flagged under Risk Management Strategy consequent upon dissemination of certain High Risk Non-filer cases on the insight portal of the department. As per the information during the year under consideration, the assessee entered in to the following financial transactions:
| Description of Information | Amount (Rs.) |
| Purchase of immovable property | 72,09,450/- |
In view of the above information, the assessee was served a show-caused notice, vide notice u/s 148A (b) of the I.T. Act, 1961, dated 24.01.2024, as to why notice u/s.148 of the Act should not be issued. In response to the show-cause notice the assessee has submitted that he was NRI for the year under consideration. The assessee also submitted copy of purchase deed and bank statement. Being submission of the assessee was not found tenable on the issue under consideration, accordingly order u/s 148A(d) of the Act, was issued after getting approval u/s 151 of the Act of competent income-tax authority. Thereafter, notice u/s 148 of the I.T Act, 1961 dated 29.03.2024, was served requiring the assessee to furnish return of Income. In response to the notice u/s 148 of the Act, the assessee has filed return of income on 29.07.2024 thereby declaring total income at Rs.10,510/-.During the course of proceedings u/s 147 of the I.T. Act 1961 various notices u/s 142(1) of the Act were issued and duly served upon the assessee through e-proceedings.
