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Before: Shri V. Durga Rao & Shri Manjunatha, G.
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 24.05.2023 relevant to the assessment year 2016-17.
The appeal filed by the assessee is delayed by 25 days in filing the appeal for which, the assessee has filed petition for condonation of delay in support of an affidavit, to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay in filing of the appeal stands condoned and the appeal is admitted for adjudication.
Brief facts of the case are that the assessee is a dealer in automotive vehicles and filed its return of income for the assessment year 2016-17 on 15.10.2016 admitting NIL income and claiming a loss of ₹.1,75,971/-. Subsequently, the case was selected for scrutiny in CASS as a ‘Limited’ type scrutiny and the following issues have been identified for examination:
1. 1. Whether sundry creditors are genuine.
2. Whether sales turnover/receipts has been correctly offered to tax.
3. Whether deduction claimed on account of depreciation is admissible. The Assessing Officer has issued notice under section 132(2) of the Income Tax Act, 1961 [“Act” in short] dated 04.07.2017 and duly served on the assessee. Notice under section 142(1) of the Act was issued on 13.04.2018, 25.05.2018 and letters were also issued on 23.07.2018, 31.08.2018 and 10.10.2018 requesting to file the particulars in connection with the issues identified. On perusal of the balance sheet as on 31.03.2016, the Assessing Officer has noted that during the year, there was increase in trade payable to Micro enterprises and small enterprises to the extent of ₹.1,54,12,650/-. The assessee was requested to submit the details with regard to increase in Trade payable. In the reply filed, the assessee stated that the increase of ₹.1,38,25,553/- was due to M/s. Suzuki Motor Cycle India Pvt. Ltd. (PAN: AAACI5832P) among other companies. The Assessing Officer issued a letter addressed to M/s. Suzuki Motor Cycle India Pvt. Ltd., Gurgoan requesting to confirm the transactions with M/s. Avish Automotive Pvt. Ltd. The company vide its reply dated 05.12.2018 confirmed a net credit balance of ₹.44,86,113/- and enclosed copies of the customer ledger accounts in this regard. The Assessing Officer issued a show cause letter dated 11.12.2018 enclosing the copies of ledger account received from M/s. Suzuki Motor Cycle India Pvt. Ltd. and proposing that the unproved credit from the Director to the extent of ₹.9,70,000/- and unproved trade payables to micro enterprises to the extent of ₹.1,09,26,537/- totalling ₹.1,18,96,537/- assessed as unexplained cash credits and requesting to make submissions, if any. However, the assessee has not filed any reply against the show cause letter. Accordingly, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 20.12.2018 assessing income of the assessee at ₹.1,18,96,540/- under section 68 of the Act. On appeal, the ld. CIT(A) dismissed the appeal filed by the assessee for the reason that neither the assessee has replied to hearing notices nor submitted any documentary evidences to substantiate its claim.
On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the login details of the Income Tax e-filing portal are known only to the Accountant of the assessee and the accountant of the company proceeded on long leave due to prolonged illness and finally left the company without intimating the login credentials to the assessee. Since the assessee was prevented by reasonable cause, the assessee was unable to furnish any details before the ld. CIT(A) and thus, the ld. Counsel prayed that one more opportunity may be afforded to substantiate its case.
On the other hand, the ld. DR fairly conceded that the assessee may be afforded one more opportunity to substantiate its case.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the assessment order, the Assessing Officer made addition towards unexplained cash credit under section 68 of the Act to the extent of ₹.1,18,96,537/-, against which, the assessee preferred an appeal before the ld. CIT(A). Despite various opportunities afforded by issuing hearing notices, neither the assessee has replied to hearing notices nor submitted any documentary evidences to substantiate its claim and thereby, the ld. CIT(A) dismissed the appeal filed by the assessee. Before the Tribunal, the ld. Counsel for the assessee has explained that the assessee was prevented by reasonable cause for not filing the explanation/details with supporting evidence in support of its claim. Accordingly, we are of the considered opinion that the assessee shall be afforded one more opportunity of being heard to substantiate its case before the ld. CIT(A) as prayed by the ld. Counsel for the assessee. Thus, we set aside the exparte appellate order and remit the matter back to the file of the ld. CIT(A) to afford one more opportunity of being heard to the assessee to substantiate its case with suitable explanation and evidences and thereafter decide the issue in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17th October, 2023 at Chennai.