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Facts
The assessee challenged an ex parte dismissal of its appeal by the CIT(A)/National Faceless Appeal Centre (NFAC), which arose from an assessment under Section 144 by the Income Tax Officer for A.Y. 2017-18. The original assessment involved arbitrary calculations of taxable income and cash deposits, and the assessee contended a lack of valid notice under Section 143(2). The CIT(A) dismissed the appeal citing non-compliance and lack of corroborative evidence.
Held
The Tribunal observed that the CIT(A)/NFAC dismissed the appeal without considering relevant material and without complying with Section 250(6) of the Act, leading to a miscarriage of justice. Therefore, the appeal was remitted back to the CIT(A) for fresh consideration, with directions to provide adequate opportunity of hearing to the assessee and pass a reasoned order based on all available evidence.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex parte without considering materials and complying with Section 250(6), and the validity of assessment under Section 144 without a valid Section 143(2) notice.
Sections Cited
144, 143(2), 250(6)
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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI MANISH AGARWAL
O R D E R
PER Ms. MADHUMITA ROY, JM:
The instant appeal, preferred by the assessee, is directed against the order dated 27.06.2024 passed by the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 29.12.2019 passed by the Income Tax Officer, Ward 2(1), Gurgaon, under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2017-18.
The assessee has raised the following grounds of appeal:
A.Y. 2017-18 GROUND NO. 1 "That the order passed u/s 144 of the Income Tax Act, 1961 is wrong, bad in law and against the facts and circumstances of the case." GROUND NO. 2 "That the Ld. Assessing Officer has erred in law and on facts in assessing taxable income of Rs. 61,02,414/- @ 8% of total credits in bank accounts arbitrarily, without any justification and ignoring the fact that all details pertaining to purchase/sales/cash deposits were provided on ITBA portal." GROUND NO. 3 "That the Ld. Assessing Officer has erred in law and on facts in not considering the return filed by the appellant on 03.07.2019 declaring loss of Rs. 63,92,586/- arbitrarily and without any justification ignoring the material on record." GROUND NO. 4 "That the Ld. Assessing Officer has erred both in law and on facts in framing assessment u/s 144 without issuing valid notice u/s 143(2) of the IT Act, 1961 so the assessment framed without valid notice deserves to be quashed." GROUND NO. 5 "That the Ld. Assessing Officer has erred both in law and on facts in considering cash deposits amounting to Rs. 1,18,03,000/- as part of turnover while applying rate of 8% for calculating taxable income arbitrarily and without any justification ignoring the fact that cash was deposited in banks out of withdrawals from banks during the year."
Ld. Counsel for the assessee at the outset submitted that that sufficient materials were placed before the Ld. First Appellate Authority/NFAC, however, the Ld. NFAC has dismissed the assessee’s appeal ex parte, qua the assessee, without complying with the provisions of Section 250(6) of the Act. He prayed for the same afresh after taking into consideration the materials available on record.
Ld. DR relied on the order passed by Ld. First Appellate Authority/NFAC.
We have heard the rival submissions made by the respective parties. The Ld. NFAC has dismissed the instant appeal, inter alia, by observing as under:
“8. As can be seen from the above the continuous non- compliance on the part of the appellant only leads to the conclusion that the appellant is not interested in pursuing the appeal. The appeal cannot be decided merely on the basis of grounds of appeal and the statement of facts as no corroborative evidence of any kind is submitted. Hence the above appeal of the appellant is dismissed and the order of the AO is confirmed.
9. In the end the appeal is dismissed.” 6.1 Though sufficient documents were placed the CIT(A)/NFAC without taking into consideration the relevant material has dismissed the assessee’s appeal, for want of prosecution. The order of the Ld. CIT(A)/NFAC being not in consonance with the provisions of Section 250(6) of the Act, in order to prevent the miscarriage of justice, this Bench deems it fit and proper to direct the Ld. CIT(A) to decide the appeal afresh upon granting further opportunity of being heard to the assessee to represent its case before it effectively. Thus, this appeal is disposed of by remitting the same to the file of the Ld. CIT(A) for consideration of the issue afresh and to pass a reasoned order by granting adequate opportunity of being heard to the assessee and upon considering the evidence available on record or any matter. It is also made clear that in the event the assessee does not cooperate with the Ld. CIT(A), the said authority would be at liberty to pass orders as deem fit strictly in accordance with law. We order accordingly.
In the result, assessee’s appeal is allowed for statistical purposes Order pronounced in open court on 07.05.2025.