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Facts
The assessee preferred appeals against the orders of the NFAC, which emanated from the assessment orders passed under Section 147/144/144B and Section 143(3)/144B. The assessee failed to appear or file an adjournment petition for hearings.
Held
The Tribunal noted that the assessee did not comply with notices from the CIT(A) and failed to provide substantial evidence to rebut the AO's findings. While the denial of opportunity violated natural justice, the Tribunal restored the matter to the AO for a de novo assessment.
Key Issues
Whether the assessee was denied a reasonable opportunity of being heard, and if so, whether the matter should be restored for a de novo assessment.
Sections Cited
250, 147, 144, 143(3), 144B, 139(1), 145(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA & SHRI ANIKESH BANERJEE
Instant appeals were preferred by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [for brevity, the “Ld. CIT(A)”] order passed u/s 250 of the Income-tax Act, 1961 (in shot, ‘the Act) for the Assessment Years 2019-20 and 2022-23. Both the appeal orders were passed on dated 18/02/2025. The impugned orders emanated from the orders of the Assessment Unit, Income-tax Department, (in short, Ld.AO) passed under section 147 r.w.s. 144 & 2673 /Mum /2025 Savannah Lifestyle Pvt Ltd ) r.w.s. 144B of the Act, date of order 20/03/2024 for A.Y. 2019-20; and for A.Y. 2022- 23 order passed u/s 143(3) r.w.s. 144B of the Act, date of order 22/03/2024.
When the appeals were called for hearing none was present on behalf of the assesse and no adjournment petition was also filed. However, considering the merit of the case, we proceed to dispose of the appeals exparte qua for assessee, after hearing the Ld.DR and on perusal of material available on record.
Both the appeals have same nature of facts and common issue. Therefore, both the appeals were heard together and are disposed of by this common order. is taken as lead case.
We heard the Ld.DR and considered the materials on record. The assessment was completed with an addition on account of ‘Income from business and profession’ amount to Rs.79,37,950/-. The assessee company engaged in business of providing service and running business of renting premises for restaurant, swimming pool and yoga classes from which it earns rental income from restaurants and membership fee from swimming pool and yoga classes. The assessee filed the return u/s 139(1) of the Act and the assessee’s case was taken for complete scrutiny under CASS. After the assessment, the addition was made under the head, ‘Income from business and profession’ and assessee’s books were rejected u/s 145(3) of the Act. The Ld. AO determined the profit @8% on turnover found declared in ITR by the assessee which comes to Rs.79,37,950/-. The profit was added back in total income under the head income from business & profession. The aggrieved assessee filed an appeal before the Ld. CIT(A). The date of hearing & 2673 /Mum /2025 Savannah Lifestyle Pvt Ltd ) was fixed for hearing in number of times. But the assessee failed to submit the evidence in support of his ground. The appellate order is passed exparte and the addition was upheld. Being aggrieved the assessee filed an appeal before us.
The Ld. DR supported and relied solely upon the orders of the revenue authorities. In our considered view, it is seen that during the appellate proceedings the assessee did not comply with the notices issued by the Ld. CIT(A) and failed to furnish any substantial evidence to rebut the findings of the Ld. AO. At the same time, the denial of reasonable opportunity to the assessee amounts to a violation of the principles of natural justice. We are, therefore, of the opinion that the assessee deserves another opportunity to place on record the requisite evidence before the Ld. AO in support of his claim. Accordingly, we restore the matter to the file of the Ld. AO with a direction to grant the assessee due opportunity of hearing and thereafter frame a de novo assessment in accordance with law. We make it clear that we have not expressed any opinion on the merits of the case so as not to prejudice the proceedings before the Ld AO. Needless to add, the assessee shall be afforded reasonable opportunity of being heard. At the same time, the assessee is expected to remain diligent and co-operative in the set-aside proceedings to enable early disposal of the assessment.
ITA 2672/Mum/2025 6. The facts and circumstances being identical, the decision arrived above shall apply mutatis mutandis to this appeal also.