Case Law Details
Babasaheb Pandurang Bandgar Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune addressed an appeal filed by Babasaheb Pandurang Bandgar, a retired Vice Chancellor, concerning the Assessment Year 2016-17. The case stemmed from an assessment order issued under section 143(3) of the Income-tax Act, 1961, which was subsequently upheld by the National Faceless Appeal Centre (NFAC). The core dispute revolved around the valuation of a property purchased by Bandgar and his wife. The Assessing Officer (AO) had noted a significant discrepancy between the purchase consideration of Rs. 10 lakh and the stamp duty valuation of Rs. 3,22,68,600. This disparity led the AO to invoke section 56(2)(vii)(b) of the Act, adding the difference of Rs. 3,12,68,600 to Bandgar’s income. Additionally, the AO made additions of Rs. 19,66,200 as unexplained expenditure under section 69C and Rs. 48,149 for suppressed interest income. Bandgar had attempted to explain the valuation difference by providing 7/12 extracts, highlighting shared ownership and ongoing litigation concerning the land, but these explanations were rejected by the AO.
Bandgar’s initial appeal to the Commissioner of Income Tax (Appeals) [CIT(A)] was dismissed for non-prosecution. During the ITAT hearing, Bandgar’s counsel argued that the absence of representation before the CIT(A) was due to circumstances beyond their control, primarily related to the COVID-19 pandemic. They emphasized that Bandgar was now prepared to provide substantial documentary evidence to support his claims. The Departmental Representative did not object to the request for a remand. The ITAT, acknowledging that the CIT(A) had dismissed the appeal without examining the merits of the case, decided to remit the matter for fresh adjudication. The ITAT directed the CIT(A) to obtain a remand report from the Jurisdictional Assessing Officer and allow Bandgar a reasonable opportunity to be heard. Furthermore, the ITAT instructed Bandgar to be diligent in attending hearings, with the CIT(A) authorized to proceed as per law in case of unjustified adjournments. Ultimately, the ITAT set aside the CIT(A)’s findings and allowed Bandgar’s appeal for statistical purposes, effectively sending the case back for a detailed review of the property valuation and related income tax additions.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee pertaining to the Assessment Year 2016-17 is directed against the order dated 09.06.2023 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn is arising out of the Assessment order dated 20.11.2018 passed u/s.143(3) of the Act.
2. Facts in brief are that the assessee is an individual retired as Vice Chancellor of Solapur University and deriving his Return of return for the A.Y. 2016-17 was filed on 23.06.2016 declaring total income of Rs.7,41,380/-. Based on the information that the assessee deposited huge cash in savings bank account and has also purchased property, the case selected for scrutiny under CASS followed by issuance of statutory notices. Based on the information filed, the Assessing officer noted that the assessee along with his wife has purchased property for consideration of Rs.10.00 lakh and the market value of the said property as per Stamp Duty Act is at Rs.3,22,68,600/-. Since the market value of the property is more than the purchase consideration, ld. AO asked the assessee to explain as to why the difference amount should not be taxed as income invoking the provisions of section 56(2)(vii)(b) of the Act. In response, the assessee filed 7/12 extracts establishing the ownership of many persons and the land is under litigation. Not convinced with the explanation, the ld. AO made addition of difference amount of Rs.3,12,68,600/- u/s. 56(2)(vii)(b) of the Act. As also made addition of Rs.19,66,200/- as unexplained expenditure u/s.69C of the Act and Rs.48,149/- on account of suppressed interest income.
3. Aggrieved assessee challenged the assessment before the CIT(A). The ld.CIT(A) vide the impugned order dismissed the appeal in limine for non-prosecution. Now the assessee is in appeal before the Tribunal
4. At the outset, Counsel for the assessee submitted that the assessee’s case could not be represented before the ld.CIT(A) for the reasons beyond control of the assessee. Most the hearing notices pertain to the covid-19 pandemic outbreak. Given an opportunity, the assessee is now in a position to substantiate its claim with documentary evidences. Therefore, it is prayed for remanding the matter to the file of ld.CIT(A) for afresh adjudication. Ld. Departmental Representative has no objection for the same. Considering the fact that the ld.CIT(A) has dismissed the appeal in limine without going into merits of the issues and the submissions of ld. Counsel for the assessee, we deem it appropriate to remit the issues on merit to the file of ld.CIT(A) for denovo adjudication. The ld.CIT(A) may call for the remand report from the Jurisdictional Assessing Officer and after obtaining the counter comments from the assessee he shall decide the appeal in accordance with law after giving reasonable opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A) shall be free to proceed in accordance with law. Findings of the ld.CIT(A) is set aside and effective grounds of appeal raised by the assessee are allowed for statistical purposes.
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 21st day of January, 2025.
Author Bio
