NATARAJAN & CO,THANJAVUR vs. ACIT CIRCLE 2(1), TIRCHY CHENNAI

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 27.03.2023 relevant to the assessment year 2017-18.

Brief facts of the case are that the assessee filed its return of income for the assessment year 2017-18 on 29.10.2017 declaring total income of ₹.19,63,508/-. On verification of books & documents impounded from the business premises of M/s. SR Ravi, Pattukottai during the course of survey action, the Assessing Officer has noted that the assessee has purchased Palm oil from M/s. SR Ravi and his group concerns for the period 01.04.2016 to 31.03.2017 and all the payments were recorded as cash by the assessee firm. The cash payments against the purchases were made in the bank account of M/s. SR Ravi and his group concern and also were recorded as cash payment through Palmolein load lorry and also were recorded as direct cash payment to M/s. SR Ravi and group concerns. However, the above transactions were not recorded in the return of income filed by the assessee for the assessment year 2017-18. Based on the above information, the case was reopened and notice under section 148 of the Act was issued on 08.05.2018 and served on 09.05.2018, in response to which, the assessee filed its return of income on 30.05.2018 accepting total income of ₹.19,63,508/-. The Assessing Officer issued notice under section 143(2) of the Act was issued on 31.05.2018 and served on 04.06.2018. The reasons for reopening were furnished to the assessee on 20.12.2019. Subsequently, a notice under section 142(1) r.w.s. 129 of the Act was issued to the assessee. After considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act dated 23.12.2019 by assessing total income of the assessee at ₹.78,51,828/- after making addition of ₹.58,88,320/- towards unaccounted cash purchases. On appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer since the assessee could not file any information or documentary evidence.

On being aggrieved, the assessee is in appeal before the Tribunal against the exparte order of the ld. CIT(A). The ld. Counsel for the assessee has submitted that survey under section 133A of the Act was not conducted in assessee’s case. In the sworn statement, the assessee has completely denied the fact of such purchases as allegedly appeared in the ledger books of the third party and clearly stated that those facts were fabricated and carried out with the intention of disrupting and isolating them from business. It was further submission that due to the circumstances beyond his control, the assessee could not put his appearance or furnished the details before the ld. CIT(A) and prayed that one more opportunity of being heard to the assessee may be afforded.

On the other hand, the ld. DR supported the order passed by the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the 4 addition of ₹.58,88,320/-, the assessee filed an appeal before the ld. CIT(A). Since the assessee could not file any documentary evidence or otherwise against the additions made in the assessment order, the ld. CIT(A) passed the exparte order by upholding the addition made by the Assessing Officer. On perusal of the appellate order, we find that the ld. CIT(A) has fixed the hearing within short notices. Accordingly, in the interest of natural justice, we are of the considered opinion that the assessee should be given one more opportunity of being heard to substantiate his claim. Thus, we set aside the appellate order and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh in accordance with law by affording an opportunity of being heard to the assessee by considering the details as may be filed by the assessee.

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