DEEPA SILKS,KARUR vs. ITO WARD 1 KARUR, KARUR

ITA 3987/CHNY/2025Status: DisposedITAT Chennai08 October 2026AY 2017-1811 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 605 days in filing the appeal, accepting the assessee's explanation that notices were sent to the tax practitioner's email who failed to respond, and the assessee was not conversant with faceless proceedings. The Tribunal noted that the CIT(A) dismissed the appeal for non-prosecution without entering into the merits of the additions, which is contrary to the provisions of Section 250(6) of the Act. Citing the Bombay High Court decision in PCIT vs. Premkumar Arjundas Luthra, the Tribunal held that the CIT(A) is duty-bound to dispose of an appeal on merits, even if ex-parte, and cannot dismiss it for non-prosecution. Therefore, the Tribunal found that the matter requires remand. While ordinarily it would be remitted to the CIT(A), given the assessee's plea of ignorance of proceedings, the Tribunal remanded the matter to the Assessing Officer for de novo assessment after affording an opportunity of being heard to the assessee. The Tribunal expressly left undecided the merits of the additions made by the AO.

What were the facts?

The assessee, Deepa Silks, a partnership firm, is in appeal against the order of the Commissioner of Income Tax (Appeals) [NFAC] dated February 21, 2024, for Assessment Year 2017-18. The assessee did not file a regular return of income. Based on information of cash deposits of Rs. 2,52,87,290/-, the Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, issuing a notice under Section 148. The assessee neither complied with the Section 148 notice nor subsequent notices under Section 142(1). Consequently, the AO made a best judgment assessment under Section 147 read with Sections 144 and 144B, estimating total income at Rs. 30,34,474/- by treating 12% of the cash deposits as business turnover. The assessee appealed to the CIT(A), claiming non-receipt of notices and that the 12% estimation was excessive. The CIT(A) dismissed the appeal for non-prosecution. The present appeal before the ITAT arises from this dismissal.

What were the issues?

1. Whether the NFAC, Delhi erred in dismissing the appeal ex-parte and in violation of principles of natural justice, rendering the order a nullity in law, as argued by the assessee. The assessee contended that notices were sent to the tax practitioner's email, who failed to respond, and the assessee was unfamiliar with faceless proceedings. The revenue relied on the orders of the lower authorities. 2. Whether the NFAC, Delhi erred in impliedly confirming the assumption of jurisdiction under Section 147 and the subsequent reassessment order without proper reasons and justification, as argued by the assessee. The assessee argued that the reassessment order was passed out of time, invalid, and without jurisdiction. The revenue relied on the orders of the lower authorities. 3. Whether the NFAC, Delhi failed to appreciate that the reassessment order was passed out of time, invalid, and without jurisdiction, as argued by the assessee. The assessee contended that the assumption of jurisdiction under Section 147 was without sanction of law. The revenue relied on the orders of the lower authorities. 4. Whether the NFAC, Delhi erred in sustaining the assessment of business income at 12% of the total cash deposits amounting to Rs. 30,34,474/-, as argued by the assessee. The assessee contended that this quantification was arbitrary, unjustified, and failed to consider the increase/decrease in preceding and succeeding assessment years. The revenue relied on the orders of the lower authorities. 5. Whether the NFAC, Delhi failed to appreciate that the entire re-computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified, and not sustainable in law, as argued by the assessee. The assessee also argued that the faceless regime procedures were not followed. The revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 139,Section 147,Section 148,Section 142(1),Section 144,Section 144B,Section 250,Section 250(6),Section 251,Section 251(1)(a),Section 251(1)(b),Section 251(2),Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES,

Before: SHRI INTURI RAMA RAO & SHRI MANU KUMR GIRI

Pronounced: 08.10.2026

PER INTURI RAMA RAO, ACCOUNTANT MEMBER :

This is an appeal filed by the Assessee directed against the order passed by learned Commissioner of Income Tax(Appeal)[NFAC], dated 21.02.2024 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18. 1 DEEPA SILKS [A]

2.

The Assessee raised these following grounds of appeal :

“1. The order of the NFAC, Delhi dated 21.02.2024 vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1061257003(1) for the above-mentioned Assessment Year is contrary to law, fact and in circu

The order continues below.

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