Facts of the Case

The Department received information that the assessee had constructed a market (“Apna Bazar”) and made investments of ₹12,11,300 (AY 2013-14) and ₹2,34,620 (AY 2014-15), along with unexplained bank credits of ₹14,88,315 in AY 2014-15. Since no return had been filed earlier, reassessment proceedings were initiated under section 148.

Due to non-compliance, the Assessing Officer completed assessments under section 147 read with sections 144 and 144B, treating the investments and bank credits as unexplained income.

Before the CIT(A), the assessee contended that he was a Non-Resident Indian working in Saudi Arabia and that bank transactions represented remittances of foreign income sent to family members in India. The CIT(A), NFAC rejected the claims for lack of documentary evidence and upheld the additions.

Issues Involved

  1. Whether appellate orders can be sustained when relevant evidence uploaded by the assessee is not considered.
  2. Whether investments and bank deposits of an alleged NRI can be taxed without determining residential status and source of funds.
  3. Whether ex parte reassessment due to absence from India violates principles of natural justice.

Petitioner’s Arguments

The assessee submitted that he had been working in Saudi Arabia from 1997 to 2018 and did not visit India during the relevant years. Funds deposited in India represented remittances sent to family members for their use.

It was further argued that during appellate proceedings, he had uploaded substantial evidence—including passport copies, visa documents, title deed of property in another person’s name, affidavits, bank statements, and written submissions—through the portal.

Despite these submissions, the CIT(A) passed the order stating that no evidence had been furnished. The assessee contended that the order was passed without considering material already on record and was therefore void for violation of natural justice.

Respondent’s Arguments

The Revenue acknowledged that evidence may have been uploaded but emphasized the assessee’s earlier failure to comply with assessment notices. It did not object to remanding the matter provided the assessee cooperates in future proceedings.

 Court Order / Findings (ITAT Allahabad)

The Tribunal found that the assessee had indeed uploaded documentary evidence on 15.06.2024 in response to notices issued by the CIT(A), including materials directly relevant to determining his residential status and ownership of property.

However, the CIT(A) failed to examine these documents and concluded that no evidence had been produced. The Tribunal held that such disposal was clearly violative of principles of natural justice, particularly because the issues went to the root of taxability—namely, NRI status and ownership of assets.

Accordingly, both appeals were remanded to the CIT(A) for fresh adjudication after considering the evidence already submitted and any additional materials. The assessee was directed to cooperate fully with the appellate proceedings. The appeals were allowed for statistical purposes.

 Important Clarification

The Tribunal did not adjudicate the merits of the additions but emphasized that tax liability—especially in cases involving non-resident status and foreign remittances—cannot be determined without examining documentary evidence. Orders ignoring submitted evidence are unsustainable in law.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1771063435_MOHAMMADSAHADATALIFATEHPURVS.AONATIONALFACELESSASSESSMENTCENTREDELHI.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.