Saima Sarwat Malik vs Income Tax Officer, Ward-28(1)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 10.10.2025, for Assessment Year 2020-21.

The assessee in appeal has inter alia raised legal grounds assailing reopening of assessment.

The facts of case in brief as emanating from records are: A search operation u/s.132 of Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was carried out on Omaxe Group on 14.03.2022. Certain physical documents and hard drive was seized during the course of search. On the basis of examination of physical and digital evidences, the department came to the conclusion that certain unaccounted transactions were undertaken by the Omaxe Group in the form of on money receipts on sale of commercial and residential units in various projects. The assessee had also invested in property in one of the projects developed by Omaxe Group that is Omaxe Connaught Place IV. The Assessing Office (AO) on the basis of documents sized during search, held that the assessee has paid unaccounted cash of Rs.15,33,900/- and thus made addition of the said amount u/s.69 of the Act. Aggrieved by the assessment order dated 22.03.2025, the assessee carried the issue in appeal before the CIT(A), but remained unsuccessful. Hence, the present appeal.

Dr. Kapil Goel, appearing on behalf of the assessee submits that the addition has been made in the hands of the assessee on the basis of documents collected behind the assessee and without providing copy of the same. He asserted that the addition has been made in violation of principles of natural justice. He contended that neither the documents on the basis of which additions were made were provided to the assessee by the AO nor the copies of same were provided to the assessee by the CIT(A) despite specific objection made by the assessee. The ld. Counsel for the assessee submits that even on merits, the assessee has prima facie good case as the Revenue has failed to substantiate that the cash amount of Rs.15,33,900/- was allegedly paid by the assessee.

Per contra, Shri Keshav Kishore Anand representing the department vehemently defending the impugned order and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. A perusal of assessment order reveals that purportedly husband of the assessee had purchased a shop from Omaxe Group during the year 2010-11 in Omaxe Connaught Place Beta II, Greater Noida, UP. The same was assigned to the assessee by her husband in the year 2010-11 itself. During FY 2019-20, the said property was exchanged with the Unit No. OCPK/First/78 Omaxe Connaught Beta II, Greater Noida. In this regard confirmation dated 27.09.2024 was filed from Omaxe Ltd. giving the details of the unit number and the details of payments received and the adjustment of payment from earlier unit. The assessee denied having made cash payment of Rs.15,33,900/-to Omaxe Group.

I find that the addition has been made by the AO, merely, on the basis of documents/information retrieved from hard disk seized from Omaxe Group during the course of search. The assessee was never provided with the documents on which the addition is based. The Counsel for the assessee has drawn attention of the Bench to the grounds of appeal filed before the CIT(A), wherein, it was specifically mentioned that the AO has not provided of the seized/impounded material pertaining to the assessee. I find merit in the submissions of the assessee, it is no more res-integra that addition based on material collected behind the back of assessee, without providing the assessee for rebuttal or cross examination is unsustainable and invalid in law. Such addition is in direct violation of principles of natural justice viz. the audi alteram partem rule. [Re: Andaman Timber Industries vs. CCE, 281 CTR 241/62 taxmann.com 3 (SC)].

In the result, impugned order is set aside and appeal of the assessee is allowed.