R. MANIVANNAN,CHIDAMBARAM vs. ITO, WARD-3, CUDDALORE

Brief facts of the case are that the assessee is an individual, engaged in the business of civil contracting and a bus operator and did not file his original return of income for the AY 2016-17. Based on the information available with the department, the AO noticed that the assessee has received Contract Payments of Rs.3,70,07,781/- and made cash deposits to the tune of Rs.22,00,000/- during the assessment year. Later, the assessee filed his return of income on 19.07.2018 for A.Y.2016-17, declaring total income of Rs.18,72,740/-. Since it was filed after the prescribed time limits, it was treated as non-est. The case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act and statutory notices were issued to the assessee and by calling for details. In response, the assessee filed his return of income on 20.12.2019 and submitted a reply along with supported documents for verification. On perusal of the documents submitted by the assessee, the Assessing Officer observed that the assessee failed to file Books of Account and other details to substantiate his claims. Hence, the AO completed the :-3-: ITA. No:2400/Chny/2026. reassessment by passing an order u/s.143(3) r.w.s 147 of the Act dated 31.12.2019 by making an addition of Rs.30,74,887/- by adopting 8% of Gross Receipts of Rs.6,11,89,400/- as profit from business after depreciation and amount of Rs.3,64,920/- as income from other sources and by arriving total income of Rs.33,05,307/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 29.01.2020. 5. At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 7 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A) passed an exparte order dated 23.01.2024 by confirming the order of the Assessing Officer. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the assessee was fully dependent on his GST tax practitioner for handling the appellate proceedings before the first appellate authority. However, due to the failure on the part of the said consultant to properly represent the matter and appear before the first appellate authority, the appeal was dismissed. The assessee became aware of the impugned order passed by the ld.CIT(A) only after receipt of recovery notice from income tax department and hence, he could not participate in the appellate proceedings before the ld.CIT(A). Therefore, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the information available with the department and partly reply submitted by the assessee and on appeal the same has been confirmed by the ld.CIT(A), NFAC due to non-participation of the assessee. Since the assessee has failed to participate before the ld.CIT(A), we levy cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

In view of the above and to meet the ends of justice, we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh on merits in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

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