CHANDRIKA MARKETING CO,NARANPURA vs. COMMISSIONER OF INCOME TAX, AHMEDABAD
What did the Tribunal hold?
The Tribunal noted that the assessment was completed ex-parte and the first appeal was dismissed without representation. The assessee contended that non-compliance was not deliberate, citing internal disputes for the Assessing Officer's proceedings and incorrect email addresses for the CIT(A)'s notices. The assessee claimed the cash deposits were business receipts. However, these contentions and supporting documents were not placed before the lower authorities. The Tribunal, considering the interest of justice, decided to set aside the order of the CIT(A) and the addition made by the Assessing Officer. The assessee was granted an opportunity to make a proper representation before the Assessing Officer, who was given liberty to examine the claims afresh. This was subject to the assessee depositing Rs. 5,000/- as cost in the Prime Minister National Relief Fund within 15 days. The assessee was directed to cooperate, file submissions, and ensure correct email addresses are on record. The Assessing Officer was permitted to adjudicate based on available material if the assessee failed to comply. The grounds raised by the assessee were allowed for statistical purposes without findings on the merits of the addition.
What were the facts?
The assessee, Chandrika Marketing Co., a partnership firm engaged in milk trading, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 02/02/2024. This order dismissed the assessee's appeal against an assessment order dated 28/03/2022, passed under Section 147 read with Section 144 of the Income Tax Act, 1961, for Assessment Year 2017-2018. The Assessing Officer had made an addition of Rs. 1,40,08,970/- on account of unexplained cash deposits in the assessee's bank account. The assessment was completed ex-parte due to non-compliance with statutory notices. The CIT(A) dismissed the appeal for non-prosecution but also confirmed the addition on merits. The assessee's appeal to the ITAT challenges these orders.
What were the issues?
1. Whether the Learned CIT(A) erred in dismissing the appeal for non-prosecution, considering the assessee's contention that notices were sent to an incorrect email address, thereby preventing proper compliance? (Mixed law and fact, concerning principles of natural justice and procedural fairness). 2. Whether the addition of Rs. 1,40,08,970/- as unexplained cash credit under Section 68 of the Act is justified, given the assessee's claim that these deposits represent genuine business receipts from milk trading? (Mixed law and fact, concerning the interpretation and application of Section 68). Assessee's Contentions: The Learned AR argued that notices from the CIT(A) were sent to an incorrect email address, preventing the assessee from filing any compliance. Non-representation before the Assessing Officer was due to internal partner disputes. The cash deposits represented genuine business receipts/gross turnover from milk trading, not unexplained cash credit under Section 68. The assessee sought an opportunity to produce relevant documents and plead its case on merits. The assessee relied on the facts that milk was purchased from Udapur Dugdh Utpadak Shakari Sangh Limited and sold locally, with cash receipts deposited in the bank. Revenue's Contentions: The Learned DR relied on the orders of the Assessing Officer and CIT(A), contending that statutory notices were issued electronically as per standard portal procedures, and the lower authorities were justified in completing ex-parte assessments and confirming the addition due to non-compliance.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, A” BENCH, AHMEDABAD
Per Rahul Chaudhary, Judicial Member:
The present appeal has been preferred by the Assessee against the Order, dated 02/02/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 28/03/2022, passed under Section 147 read with Section 144of the Income Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2017-2018. 2. The Assessee has raised the following grounds of appeal:
On the Facts and Circumstances of the case, The Learned Commissioner of Income Tax (Appeal) NFAC, Delhi has dism
The order continues below.
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