M/S. S.P ENGINEERS,PUNE vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, PUNE

This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 11.08.2023 for the assessment year 2014-15.

Briefly, the facts of the case are that the appellant is a firm engaged in the business of manufacturing of engineering goods. The Return of Income for the assessment year 2014-15 was filed on 30.11.2014 declaring total loss of Rs.1,88,86,180/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-3, Pune (‘the Assessing Officer’) vide order dated 30.11.2016 passed u/s 144 r.w.s. 143(3) of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.2,27,18,653/-. While doing so, the Assessing Officer had made addition of Rs.1,46,98,625/- by estimating net profit of business income @ 15% of gross receipts and also made addition of Rs.80,20,028/- on account of unexplained credits u/s 68 of the Act. 3. Being aggrieved by the above additions, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal of the assessee for non-prosecution without going into the merits of the issue in appeal. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. When the appeal was called on, none appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceed to dispose of the appeal after hearing the ld. Sr. DR. 6. We heard the ld. Sr. DR and perused the material on record. From perusal of the impugned order, it is clear that the NFAC while passing the ex-parte order had not adjudicated the issue raised in appeal on merits, instead the NFAC dismissed the appeal for want of prosecution of appeal. This approach of the NFAC is totally unreasonable and unjustified. The NFAC fell in serious error by not adjudicating the issues in appeal on merits. The settled positions of