KUPPUSAMY SANGAMESWARAN,NAMAKKAL vs. ITO, WARD-2,, TIRUCHENGODE

Brief facts of the case are that the assessee is an individual, engaged in the business of manufacture and sale of Lungies and has filed his return of income on 09.11.2017 for AY 2017-18, declaring total income of Rs.5,50,590/-. The case was selected for scrutiny under CASS, accordingly statutory notices were issued to the assessee and by calling for details. In response, the assessee submitted the reply along with its supporting documents for verification. Meanwhile, the AO issued notices u/s.133(6) of the Act and obtained bank statement from KVB and IOB Komarapalayam Branch and PNB, Erode Branch. On perusal of the documents submitted by the assessee and details available on record, the AO observed that the assessee has made cash deposits in SBNs amounting to Rs.27,33,000/- during the demonetization period. Subsequently, the AO observed that the assessee had shown Sundry Creditors to the tune of Rs.32,85,630/- but the assessee had not submitted the complete details as called for and amount of Rs.16,386/- received as FD Interest during the assessment year. Since, the assessee failed to furnish the proper explanation and documentary evidence, the AO completed the assessment by passing an order u/s.143(3) of the Act dated 31.12.2019 by making additions to the tune of Rs.60,35,016/- as unexplained income u/s.69A r.w.s 115BBE of the Act, unproved claim of Sundry Creditors and Income from Other Sources.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 22.01.2020.

At the outset, we observed that ld.CIT(A) has provided eight opportunities to the assessee to appear for hearings as detailed in paragraph 6.2 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), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an

The ld.AR submitted that the ld.AO as well as ld.CIT(A) failed to appreciate that having not examined the financial statements, bank statements in the context of the business pursued by the assessee and explanation which were available before them. In view of the above, 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 the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

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 submission made by the assessee and the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non- participation of the assessee.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence 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 to 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.