MOHAMED ISMAIL BABU,KALLAKURICHI vs. ITO, WARD-1,, VILLUPURAM

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

This appeal by the assessee is directed against the order of the ld.CIT(A), ADDL/JCIT (A)-2 Gurugram dated 22.11.2025 for AY 2018-19 arising out of the rectification order dated 18.10.2024framed u/s. 154r.w.s 144 of the Income Tax Act, 1961 ("the Act"). 2. Brief facts of the case are that the assessee is an individual. For the Assessment Year 2018-19, the assessee did not file the return

ITA No. 962/Chny/2026 (AY 2018-19) Mohamed Ismail Babu Vs ITO W-1 :: 2 :: of income. Based on information available with the Department, it was noticed that the assessee had undertaken imports aggregating to Rs.4,70,79,442/- during the relevant previous year. Consequently, reassessment proceedings were initiated by issuance of notice u/s. 148 of the Income Tax Act, 1961. 2.1 As the assessee did not respond to the statutory notices, the Assessing Officer completed the assessment ex parteu/s. 147/144 of the Act vide order dated 13.03.2023, treating the entire import value of Rs.4,70,79,442/- as unexplained expenditure u/s. 69C of the Act and assessed the same to tax. 2.2 Subsequently, the Assessing Officer noticed that while completing the assessment, tax on the income assessed u/s. 69C had been charged at the rate of 30% instead of 60% as prescribed u/s. 115BBE of the Act. Treating the same as a mistake apparent from the record, the Assessing Officer initiated rectification proceedings u/s. 154 of the Act by issuing notice dated 11.09.2024. 2.3 According to the Assessing Officer, the assessee did not file any reply to the notice issued u/s. 154. Therefore, the Assessing Officer passed an order u/s. 154 rectifying the assessment by recomputing the tax liability and raising an enhanced demand. 3. On appeal, the ld.CIT(A) upheld the rectification order passed by the AO. Aggrieved, the assessee is in appeal before the Tribunal. 4. Before us, the ld. Authorised Representative (AR) submitted that the assessee could not respond either to the assessment proceedings or to the rectification proceedings as he was unaware of the notices allegedly served upon him. It was contended that the non-compliance was neither deliberate nor intentional but occurred due to the assessee's lack of knowledge regarding the proceedings.

ITA No. 962/Chny/2026 (AY 2018-19) Mohamed Ismail Babu Vs ITO W-1 :: 3 :: It was further submitted that the rectification order has resulted in substantial enhancement of the tax liability without providing the assessee an effective opportunity of being heard. Therefore, in the interest of natural justice, the matter deserves to be restored to the file of the Assessing Officer for fresh adjudication after affording adequate opportunity to the assessee to explain his case. 5. The ld. Departmental Representative (DR) supported the order of the Assessing Officer. It was submitted that the Assessing Officer had duly issued notice u/s. 154 proposing rectification of the mistake apparent from the record. Since no reply was received from the assessee, the Assessing Officer was justified in proceeding with the rectification. It was further submitted that levy of tax at the rate prescribed u/s. 115BBE is mandatory and the error in applying a lower rate of tax constituted a mistake apparent from the record, which was rightly rectified u/s. 154 of the Act. 6. We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the impugned rectification order u/s. 154 has resulted in substantial enhancement of the tax liability of the assessee. The assessee has consistently pleaded that he was not aware of the notices issued by the Department and, therefore, could not participate in either the assessment proceedings or the subsequent rectification proceedings. Without expressing any opinion on the merits of the rectification or the applicability of section 115BBE, we are of the considered view that the principles of natural justice require that the assessee be afforded one more effective opportunity to present his case before the Assessing Officer. Since the impugned order has been passed ex parte and the assessee has expressed his willingness to participate in the proceedings, the ends of justice

ITA No. 962/Chny/2026 (AY 2018-19) Mohamed Ismail Babu Vs ITO W-1 :: 4 :: would be adequately met by restoring the matter to the file of the jurisdictional Assessing Officer (JAO).Accordingly, the impugned order passed u/s. 154 read with section 147 of the Act is set aside and the matter is restored to the file of the jurisdictional Assessing Officer. The Assessing Officer (JAO) shall examine the issue afresh, consider the submissions and evidences, if any, that may be furnished by the assessee, and thereafter pass a reasoned and speaking order in accordance with law after providing adequate opportunity of being heard. The assessee is also directed to extend full cooperation in the proceedings and shall not seek unnecessary adjournments. In case of failure on the part of the assessee to avail the opportunity so granted, the Assessing Officer shall be at liberty to decide the matter in accordance with law on the basis of material available on record. 7. In the result, the impugned order passed u/s. 154 read with section 147 of the Income Tax Act, 1961 is set aside, and the matter is restored to the file of the jurisdictional Assessing Officer (JAO) with a direction to adjudicate the issue afresh and pass a speaking order in accordance with law after affording the assessee a reasonable opportunity of being heard. 8. The appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on the 27th of July 2026, in Chennai.

Sd/- Sd/- (इंतूरी रामा राव) (मनु कुमार िग�र) (INTURI RAMA RAO) (MANU KUMAR GIRI) लेखा सद*य/ACCOUNTANT MEMBER �या�यक सद*य/JUDICIAL MEMBER

SANDEEP Digitally signed by SANDEEP KUMAR KUMAR Date: 2026.07.28 11:35:38 +05'30'

ITA No. 962/Chny/2026 (AY 2018-19) Mohamed Ismail Babu Vs ITO W-1 :: 5 :: चे�नई/Chennai, +दनांक/Dated: 27th July, 2026. SNDP, Sr. PS

आदेश क! ��त,ल-प अ.े-षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF