Shri Bijay Kumar Chandra vs The Income Tax Officer

This appeal in ITA No.2382/Del/2026 for assessment year 2012-13 has arisen from the appellate order dated 08.01.2026 passed by the learned CIT(A), NFAC, Delhi under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’)(DIN & Order No. ITBA/NFAC/S/250/2025-26/1084585385(1)) , which appeal in turn, has arisen from the reassessment order dated 15.11.2019 passed by ld. Assessing Officer under Section 147 read with Section 144 of the 1961 Act.

The brief facts of the case are that assessee filed his return of income u/s 139(1) on 31.08.2012 , declaring total income of Rs. 5,79,654/-. As per the AIR information, the assessee had purchased immovable property amounting to Rs. 44,00,000/- during the impugned assessment year . Thus, the AO has reasons to believe that income has escaped assessment, powers u/s 147 were invoked after recording reasons and taking necessary approval of the ld. Pr. CIT-22, New Delhi under Section 151 of the Act. Notice under Section 148 was issued by the AO to the assessee on 27.03.2019 , which was claimed by the AO to have been duly served on the assessee, but no return of income in response thereto nor any submissions were filed by the assessee. Thereafter, notices u/s 142(1) dated 03.07.2019, 22.07.2019, 09.08.2019 and 16.10.2019 were issued by the Assessing Officer to the assessee and claimed by the AO to have been duly served on the assessee, but none attended on behalf of the assessee nor any replies/submissions were filed by the assessee. Thereafter, final show cause notice dated 29.10.2019 along with notice u/s 142(1) was issued by the Assessing Officer to the assessee at the last known address as well by e-mail show causing assessee as to why purchase of immovable property amounting to Rs. 44,00,000/- be not treated as an unexplained investment and the assessment be not completed u/s 144 on the basis of material available on record, but again, there was no compliance on the part of the assessee , which led the Assessing Officer to frame the best judgment assessment under Section 144 of the Act wherein the payment made by the assessee for purchase of property to the tune of Rs.44,00,000/-was treated as an unexplained investment and added to the income of the assessee by the AO.

Aggrieved, the assessee filed first appeal before the learned CIT(A) , and learned CIT(A) issued the notice of hearing for 14.08.2025 but, there was no response from the assessee. The final SCN issued by ld. CIT(A) also remained un-complied with by the assessee . The ld. CIT(A) dismissed the appeal of the assessee ex-parte, wherein the order of reassessment stood confirmed.

Still aggrieved, the assessee has now filed an second appeal with the Tribunal, and learned Counsel for the assessee submitted that the learned CIT(A) failed to consider the reply submitted by the assessee on 14.08.2025 , and passed an ex-parte appellate order against the assessee. It was submitted that the assessee duly filed details and sources of making payment for purchase of the immovable property, but ld. CIT(A) did not took cognizance of the said reply. It was submitted that only one hearing was granted by the learned CIT(A) , and principles of natural justice were not complied with. It was submitted that the assessee purchased immovable property for Rs. 44,00,000/- which was jointly owned by the assessee along with his wife Mrs. Veenu. It was submitted that the assessee obtained loan of Rs. 34,95,588/-from Indiabulls Housing Finance Limited. The sanction letter dated 06.01.2012 is enclosed in paper book/page 36(Loan Sanction letter (Reference No. 226429 dated 06.01.2012). It was submitted that the property situated at Plot No. Gyan Khand-III/21, Indirapuram, Ghaziabad, U.P. was purchased for Rs. 44,00,000/- out of which Rs. 4,40,000/- was paid vide cheque no. 475847 dated 25.12.2011 and Rs. 4,64,412/- was paid in cash. It was submitted that all the sources of making payment for purchase of property are explainable. It was submitted that scrutiny assessment of the wife was conducted by Revenue by reopening of the assessment u/s 147, and her wife duly explained the sources for making payment for purchase of aforesaid immovable property . It was submitted that in case of his wife, no additions were made in the scrutiny reassessment proceedings, and the explanation were accepted. The assessee has filed copy of reassessment order dated 16.12.2019 u/s 147 read with Section 143(3) in the case of his wife Mrs. Veenu, which is placed in paper book/page 37-39. It was submitted that her wife explained her source/contribution in the purchase of the property and no adverse view was taken by the Revenue.

I have heard the rival submissions and perused the material placed before me. I have observed that the assessee filed his return of income on 31.08.2012 declaring income of Rs. 5,79,654/-. The assessee is Doctor in RML Hospital , and purchased immovable property for Rs.44,00,000/- during the year under consideration jointly along with his wife, situated at Plot No. Gyan Khand-III/21, Indirapuram, Ghaziabad, U.P. The case of the assessee was reopened by the Revenue by invoking provisions of Section 147 of the Act. Statutory Notices were issued by the AO u/s 148, 142(1) and SCN u/s 144, from time to time during reassessment proceedings. The assessee did not participated in the reassessment proceedings, and no reply/response was filed by the assessee. The assessee also did not file return of income in pursuant to notice u/s 148. The Assessing Officer made additions in the hands of the assessee to the tune of Rs. 44,00,000/- being unexplained investment in the immovable property. During appellate proceedings, learned CIT(A) issued notice of hearing , and the case was posted for hearing on 14.08.2025. As per ld. CIT(A), there was no response by the assessee to the aforesaid notice of hearing. It was further stated by ld. CIT(A) in appellate order that further final SCN issued by ld. CIT(A), remained un-complied with by the assessee. The assessee has claimed that it has duly filed response before ld. CIT(A) on 14.08.2025 , and response statement to notice ID 100099719817 is enclosed wherein it is appearing that the response vide letter and supporting documents were filed by the assessee. The assessee has claimed that it filed before ld. CIT(A) sale deed as well explained the sources of making payments for the said property, which were by way of housing loan from Indiabull Housing Finance Limited, payments made by wife from her savings and part payment made by the assessee, for purchasing aforesaid property. The ld. CIT(A) did not consider aforesaid reply, and dismissed the appeal of the assessee and upheld the reassessment order, ex-parte. There is clearly breach of principles of natural justice as well prejudice is caused to the assessee by non consideration of the replies filed before ld. CIT(A). The ld. CIT(A) appellate order is thus unsustainable. Further, it is observed that the assessee purchased the aforesaid property jointly with her wife. The sources explained are housing loan from Indiabull Housing Finance Limited, part payment by assessee and part payment by wife from her sources. The case of the wife of the assessee Mrs. Vennu was re-opened by Revenue u/s 147 for the same reasons for purchasing the same property, and the Revenue accepted the explanations submitted by her wrt her sources of making payment for the purchase of aforesaid property and no adverse view was taken by Revenue in the reassessment order dated 16.12.2019 . Thus, under these facts and circumstances of the case and in the interest of justice , it will be fair and proper that the matter is restored back to the file of the AO for denovo reassessment on merits in accordance with law after affording adequate opportunity of being heard to the assessee. The assessee is directed to co-operate in the de-novo reassessment proceedings before the ld. AO , and furnish all the evidences etc before the AO to support his contentions, otherwise , the AO will be free to frame denovo reassessment on merits in accordance with law. I clarify that I have not commented on the merits of the issue in this appeal. The appeal of the assessee is allowed for statistical purposes. I order accordingly.

In the result, the appeal of the assessee is allowed for statistical purposes.