Shri Om Parkash vs Income Tax Officer

This appeal in ITA No.1413/Del/2026 for assessment year 2017-18 has arisen from the appellate order dated 10.12.2025 passed by the learned CIT(A) under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) (DIN & Order No. ITBA/NFAC/S/250/2025-26/1083543286(1)), which, in turn, has arisen from the assessment order dated 27.03.2022 passed by the ld. Assessing Officer under Section 147 read with Section 144 of the Act(DIN & Order No. ITBA/AST/S/147/2021-22/1041720599(1)).

The brief facts of the case are that the assessee had not filed return of income as per provisions of Section 139(1) of the Act. The Assessing Officer had received information from DIT(I&CI) that the assessee had purchased an immovable property for Rs. 16 lakhs, out of which, cash payment of Rs. 9 lakhs had been made during the year under consideration. The AO observed that the assessee has taxable income , but despite that the assessee did not file return of income for the year under consideration. Proceedings under Section 147 were initiated by the AO against the assessee after obtaining necessary approval , and notice u/s 148 dated 31.03.2021 was issued by the Assessing Officer to the assessee. In response thereto, there was no compliance by the assessee. Thereafter, notices under Section 142(1) dated 26.11.2021, 14.02.2022 and 24.02.2022 along with questionnaire were issued by the AO to the assessee , but still there was no compliance made by the assessee. Thereafter, a final sow cause notice under Section 144 dated 03.03.2022 was issued by the AO to the assessee to explain the source of making investment of Rs. 16 lakhs , but the same also remained uncomplied with. The AO observed that the assessee is deliberately avoiding compliance to statutory notices , and no requisite details were filed by the assessee despite being granted sufficient opportunity of being heard. Thus, the Assessing Officer framed best judgment assessment by making an addition of Rs. 16 lakhs as an unexplained investment regarding the purchase of property from undisclosed sources by invoking provisions of Section 69 of the 1961 Act, which amount stood added by the AO to the income of the assessee , because as per the AO the assessee has failed to disclose truly and fully all material facts necessary for its assessment.

Aggrieved, the assessee filed first appeal with ld. CIT(A). Before learned CIT(A), in the grounds of appeal and statement of fact, the assessee submitted that for purchasing property for Rs. 16,00,000/- as was added by the AO as an unexplained investment u/s 69 , an amount of Rs. 3.50 lakhs was paid out of accumulated savings of past several years which were lying in bank account No.10821000100688 at Punjab & Sind Bank, an amount of it was Rs. 3.50 lakhs was paid from the funds borrowed from his friend Mr. Mukesh Manral , an amount of Rs. 6 lakhs was paid through cash which was given by his mother-in-law Mrs. Dayawati and lastly an amount of Rs. 3 lakhs was paid by cash which was given by his sister Mrs. Ombati Devi. The assessee submitted that these amounts given by him and his friend can be verified from the bank account also, while Rs. 9 lacs was given in cash which was borrowed from his sister and mother in law. The assessee filed one reply dated 19.07.2024 before ld. CIT(A) in response to notice dated 15.07.2024. But, so far as further notices dated 31.07.2024 and 11.02.2025 issued by the learned CIT(A) are concerned, the same were uncomplied with by the assessee. The learned CIT(A) observed that assessee has not filed return of income for assessment year 2017-18, and Assessing Officer has framed best judgment assessment under Section 144 by treating the purchase of property to the tune of Rs. 16,00,000/- from undisclosed sources and holding the same as unexplained investment under Section 69 of the Act. Learned CIT(A) observed that the assessee has not submitted supported documents and ultimately, the learned CIT(A) dismissed the appeal of the assessee as assessee has remained uncomplied with even before the learned CIT(A) as no supporting documents/evidences were submitted by the assessee in support of his contentions.

Still aggrieved, the assessee has filed second appeal before the Tribunal. None appeared on behalf of the assessee when this appeal was called for hearing. On the earlier occasion also, when this appeal was listed for hearing on 06.04.2026 and 15.04.2026, none appeared on behalf of the assessee.

I have considered the contention of the learned Senior DR and perused the material placed on record. The facts in brief and the contention of the learned Senior DR have been recorded in the preceding paragraphs of this order and are not repeated. The short question in this appeal is with respect to the investment made by the assessee to the tune of Rs. 16 lakhs for the purchase of property wherein the assessee was not able to explain the sources of making aforesaid investment by supporting documents/evidences, which led to best judgment assessment made by the AO wherein Rs. 16,00,000/- stood added to the income of the assessee u/s 69. The assessee has not filed the return of income. It is observed that the assessee has submitted before ld. CIT(A) that the acquisition was made by making payments which were out of past savings as well as the amounts were borrowed from friends and relatives. The assessee had stated that an amount of Rs. 3.50 lakhs was paid out of accumulated savings of past several years which were lying in bank account No.10821000100688 at Punjab & Sind Bank, an amount of it was Rs. 3.50 lakhs was paid from the funds borrowed from his friend Mr. Mukesh Manral , an amount of Rs. 6 lakhs was paid through cash which was given by his mother-in-law Mrs. Dayawati and lastly an amount of Rs. 3 lakhs was paid by cash which was given by his sister Mrs. Ombati Devi. The assessee submitted that these amounts given by him and his friend can be verified from the bank account also, while Rs. 9 lacs was given in cash which was borrowed from his sister and mother in law. The ld. CIT(A) made no further enquiry nor any remand report was called by ld. CIT(A) from the AO. No notice u/s 133(6) or summons u/s 131 were issued by ld. CIT(A) to said persons. Even no enquiry has been made with the assessee’s bank viz. PSB. I observe that learned CIT(A) has dismissed the appeal of the assessee mainly on the ground that assessee has not filed complete replies before the learned CIT(A) , and the notices of learned CIT(A) have remained uncomplied with. The learned CIT(A) has simply dismissed the appeal of the assessee on the ground that documentary supporting evidences have not been filed by the assessee. It is observed that the learned CIT(A) has not even called for the assessment record. No independent reasoning has been given by ld. CIT(A) while sustaining additions. It is true that the assessee did not comply with notices dated 31.03.2024 and 11.02.2025 issued by ld. CIT(A). It is also equally true that the assessee is also responsible for his woes. In these circumstances, I am of the view that it will be fair and in the interest of justice to give one more opportunity to the assessee by restoring the matter back to the file of learned CIT(A) for fresh adjudication of the appeal of the assessee on merits in accordance with law after providing opportunity of being heard to the assessee. The assessee, on his part, is also directed to cooperate with the learned CIT(A) and submit all the details , otherwise learned CIT(A) will be free to adjudicate the appeal of the assessee on merits in accordance with law. I clarify that I have not commented on the merits of the issues arising in this appeal. The appeal of the assessee is allowed for statistical purposes.

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