ITAT Pune Sets Aside CIT(A)/NFAC Order: Denial of Video Conferencing Hearing Violates Natural Justice

Background and Factual Matrix

The Income Tax Appellate Tribunal, Pune Bench, recently adjudicated an appeal filed by an individual assessee — Virsinh Chandrashekar Jadhavrao — challenging an appellate order dated 23.09.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [CIT(A)/NFAC], Delhi, pertaining to Assessment Year 2019-20.

The assessee had originally filed a return of income under Section 139 of the Income Tax Act, 1961, declaring total income of ₹34,38,160. The Assessing Officer, acting on departmental intelligence, discovered that the assessee had participated in a purchase transaction of immovable property valued at ₹40,99,000 during the relevant assessment year, which had not been disclosed in the filed return.

On the basis of this information, the Assessing Officer proceeded to reopen the assessment under Section 147 of the Act by issuing a notice under Section 148 on 27.03.2023.

Non-Compliance and Ex Parte Assessment

Despite the issuance of the reopening notice, the assessee failed to file a return of income in response to the Section 148 notice. Subsequent notices issued under Section 142(1) and show cause notices also went unheeded. Consequently, the Assessing Officer completed the assessment on an ex parte basis under Sections 147, 144, and 144B of the Act, making an addition of ₹40,99,000 as unexplained investment under Section 69 read with Section 115BBE vide assessment order dated 29.12.2023.

First Appeal Before CIT(A)/NFAC

Aggrieved by the ex parte assessment order, the assessee preferred an appeal before the CIT(A)/NFAC. The appellate authority dismissed the appeal and confirmed the addition made by the Assessing Officer. The CIT(A)/NFAC observed:

"5.6 From the proper appreciation and evaluation of the findings of the AO with regards to addition and contention of the appellant in his reply/submission furnished during the appellate proceedings and upon careful examination of the facts and evidence on record. The addition of Rs. 40,99,000 as unexplained investment under sections 69 and 115BBE by the Assessing Officer is fully justified based on cogent evidence and settled legal principles. The AO relied on credible material unearthed during a survey of third parties, where loose papers indicating payments aggregating Rs. 81,00,000 linked to the assessee for immovable property purchase were found. Despite registered sale deed recording only Rs. 40,00,000, the appellant failed to satisfactorily explain or account for the differential amount, which prima facie indicated suppression of income..."

The CIT(A)/NFAC further endorsed the addition by relying on principles drawn from several Supreme Court decisions and concluded that the assessee's inability to explain the source of investment warranted confirmation of the addition under Section 69 read with Section 115BBE.

Grounds Raised Before ITAT Pune

Dissatisfied with the first appellate order, the assessee approached the ITAT Pune raising the following grounds of appeal: