BALUUDAYAR RAMANATHAN,KRISHNAGIRI vs. INCOME TAX OFFICER, KRISHNAGIRI

At the threshold, we observe that there is a delay of 660 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the assessee had school dropout in 10th standard and had no knowledge of income tax e-proceedings and information technology and hence the assessee was not aware of the hearing notices issued by the first appellate authority and impugned order passed by the ld.CIT(A) during the relevant period. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

Brief facts of the case are that the assessee is an individual, earning income from wholesale business of rice and mundy in the name of Vinayaka Traders and has filed his return of income on 04.11.2017 for A.Y.2017-18, admitting total income of Rs.6,16,050/-. The case was selected for scrutiny under CASS to examine the cash deposited to the tune of Rs.49,02,000/- into his bank account maintained with Tamilnad Mercantile Bank, Krishnagiri during the demonetization period i.e., 09.11.2016 to 30.12.2016. The AO issued statutory notices to the assessee by calling for details, but the assessee did not respond to any of the notices. In the meanwhile, the AO issued notice u/s.133(6) of the Act and obtained statement of accounts from the bank. On verification of the return of income and credits of Rs.6,33,42,771/- in statement of bank accounts obtained, the AO completed the assessment by passing an exparte order u/s.144 of the Act dated 19.12.2019 after making additions to the tune of Rs.24,83,166/- (net profit was estimated at the rate of 5% of total turnover of Rs.6,33,42,771/-) as unaccounted income and amount of cash deposits during

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 19.01.2020.

At the outset, we observed that ld.CIT(A) has provided four opportunities to the assessee to appear for hearings as detailed in paragraph 4.1 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 order dated 30.01.2024. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

The ld.AR submitted that the assessee had school dropout in 10th standard and had no knowledge of income tax e-proceedings and information technology and hence the assessee was not aware of the impugned order passed by the ld.CIT(A) during the relevant period and hence, the assessee could not participate in the appellate proceedings. In view of the above, the ld.AR prayed to set aside the order of the ld.CIT(A) and remit the issues to the file of Assessing Officer by giving one more opportunity to the assessee. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer 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 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 the exparte order by considering the information available with the department and on appeal the same has been dismissed by the ld.CIT(A), NFAC due to non-participation of the assessee.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the 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.