VENKATESAN SELVAM,CHENNAI vs. INCOME TAX OFFICER, 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 10.02.2023 for the assessment year 2017-18.

The appeal filed by the assessee is delayed by one day in filing the appeal and filed a petition for condonation of delay in the form 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 of five days in filing of the appeal stands condoned and the appeal is admitted for adjudication.

Brief facts of the case are that the assessee is an individual and not filed return of income for the assessment year 2017-18. As per the information available in AIMS module of the ITBA, the assessee has made cash deposits of ₹.13,00,000/- during the period of demonetization from 09.11.2016 to 30.12.2016 in the current/savings bank account maintained with the HDFC Bank. Since the assessee did not file return of income under the provisions of section 139(1) of the Income Tax Act, 1961 [“Act” in short], the Assessing Officer issued notice under section 142(1) of the Act dated 09.03.2018 requiring the assessee to file income tax return. However, no return was filed by the assessee. After getting information from the HDFC Bank, the Assessing Officer issued a show- cause notice dated 24.07.2019 to the assessee proposing addition of the credits in the bank account and called for explanation of the assessee. In the absence of any return filed for the year and non compliance to the notices issued under section 142(1) of the Act as well as summon issued, the Assessing Officer completed the assessment under section 144 of the Act dated 29.10.2019 by determining the income of the assessee for the assessment year 2017-18 at ₹.3,65,841/- as well as unexplained cash deposits during the demonetization period of ₹.13,00,00,000/- under section 69 of the Act and brought to tax. On appeal, the ld. CIT(A) confirmed the assessment made by the Assessing Officer since there was no response from the assessee by filing any written submissions despite various opportunities afforded to the assessee.

On being aggrieved against the appellate order, the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the ld. CIT(A) has not adjudicated the issues raised by the assessee on merits and prayed for suitable directions.

On the other hand, the ld. DR has submitted that the assessee was afforded sufficient opportunities and no more opportunity should be given to the assessee.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the assessment under section 144 of the Act dated 29.10.2019, the assessee carried the matter in appeal before the ld. CIT(A). The ld. CIT(A) issued hearing notices for filing the written submissions. However, the assessee has not complied with the above notices. Therefore, the ld. CIT(A) dismissed the appeal filed by the assessee by following various case law including the decision in the case of CIT v. Multiplan India Pvt. Ltd. 38 ITD 320 (Del), which is not correct. We find that the ld. CIT(A) has not adjudicated the grounds raised in the appeal of the assessee on merits. Accordingly, we set aside the appellate order and remit the matter back to the file of the ld. CIT(A) with a direction to adjudicate the issues on merits in accordance with law by affording one more opportunity of being heard to the assessee. The assessee is also directed to furnish complete details with material evidence before the ld. CIT(A) for consideration.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 07th June, 2023 at Chennai.