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Facts
The assessee filed a return for AY 2016-17 and the case was selected for scrutiny. The AO made an addition on account of unexplained source of import of machinery. The CIT(A) partly allowed the appeal by restricting the addition.
Held
The Tribunal condoned the delay in filing the appeal. It was noted that the orders of both the AO and CIT(A) were ex-parte. Therefore, the matter was restored to the file of the AO for a denovo assessment.
Key Issues
Whether the ex-parte orders of the AO and CIT(A) should be set aside and the matter remanded for denovo assessment, and if the delay in filing the appeal should be condoned.
Sections Cited
144, 69, 234A, 234B, 234D, 271(1)(b), 271(1)(c), 250
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Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
स िवाई की िारीख / Date of Hearing 19.06.2025 घोर्णा की िारीख/Date of Pronouncement 30.06.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 2016-17 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2016-17.
A.Y. 2016-17 Chandrakumar Bhanwarlal Kothari 2. The assessee has raised the following grounds of appeal: “1 In the facts and circumstances of the case, the National Faceless Appeal Centre (NFAC)/Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) erred in passing the impugned order under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The partial dismissal of the appeal by the Ld. Commissioner is illegal, unjustified, arbitrary, and contrary to the facts and circumstances of the case. It is respectfully prayed that relief be granted by quashing the said order.
2. In the facts and circumstances of the case, the Ld. Commissioner has erred in not considering the fact that notices were not received by the Appellant and no physical notices were sent to the residential address of the Appellant, as all communications were solely transmitted electronically via Email and the Income Tax Portal, with no physical copies of the documents ever being delivered to the Appellant. Further, all the notices were sent to the previous consultant's email ID, including the impugned order issued under Section 250 of the Act; therefore, the same cannot be construed as notice sent/served to the Appellant. Furthermore, this procedural lapse constitutes a violation of the principles of natural justice, rendering the impugned order under Section 250 of the Act null and void ab initio.
3. In the facts and circumstances of the case, the National Faceless Appeal Centre (NFAC) / Learned Commissioner of Income Tax (Appeals) ("Ld. Commissioner") erred in issuing the impugned order without properly considering the explanation and documentary evidence submitted by the Assessee in support of the source of investment for the purchase of machinery. Despite the Assessee furnishing substantial documentary proof, including bank statements highlighting receipt entries and ledger confirmations from relevant parties, the Ld. Commissioner failed to appreciate the evidence in a judicious manner. Consequently, the order passed is untenable in law and merits being set aside.
4. In the facts and circumstances of the case, and in law, Ld. Commissioner erred in upholding the incorrect levy of interest under Sections 234A, 234B, and 234D of the Act, as considered by the Learned National Faceless Assessment Centre.
5. In the facts and circumstances of the case, Ld. Commissioner erred in upholding the wrong levy penalty under Section 271(1)(b) of the Act, as there was no intentional non-compliance. The Assessee seeks the opportunity to present proof of income sources and requests the penalty be waived.
6. In the facts and circumstances of the case, the Assessee requests that these reasons be considered, the penalty under Section 271(1)(c) be waived, and an opportunity be granted to present the case on its merits.
7. The Appellant craves leave to add, alter, amend, and modify the aforesaid grounds of appeal at any time before the hearing as they may be advised from time to time.”
A.Y. 2016-17 Chandrakumar Bhanwarlal Kothari 3. At the outset, it is noticed that the appeal is delayed by 484 days. The assessee filed an application, along with an affidavit, for condonation of delay. It has been explained that the appellate order dated 29.11.2023 was passed by the CIT(A) after no compliance was made to various notices, which were issued through the Income Tax Portal. However, no physical notice was received by the assessee and due to his limited familiarity with the digital platform, the registered email ID of his previous consultant was mentioned in the income tax profile, and notices sent to this email ID were not made available by the consultant. On account of the these facts and circumstances, the delay of 484 days occurred in the filing of the appeal as the assessee became aware of the impugned order only upon receiving a penalty notice dated 31.01.2025. Considering the facts and circumstances explained by the assessee, we hereby hold that there was a reasonable cause for the delay in filing of appeal, and hence, the delay is hereby condoned.
Brief facts of the case are that the assessee filed return for AY 2016-17 declaring income of Rs. 2,79,740/- on 29.03.2017. The case was selected for scrutiny, and notices were issued by the Ld. AO. However, no details were furnished by the assessee in response to these notices. Accordingly, Ld. AO finalised the assessment u/s 144 of the Act after holding that the source of import of machinery worth Rs. 57,16,750/- remained unexplained and therefore added the same to the income of the assessee u/s 69 of the Act.
A.Y. 2016-17 Chandrakumar Bhanwarlal Kothari 5. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). It was explained by the assessee that it had taken the unsecured loan and used the Bank Overdraft Facility for the import of machinery amounting to Rs. 30,20,073/-, which was the entire cost of machinery and not 57,94,370/- as taken by the Ld. AO. After considering the reply of the assessee, Ld. CIT(A) partly allowed the assessee’s appeal by directing the AO to restrict the addition to Rs. 30,20,073/-.
Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal. The sole substantive issue involved is regarding the addition of Rs. 30,20,273/- u/s 69 of the Act.
It is seen that the order of the AO as well as of the CIT(A) are exparte, and therefore, in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld. AO. He is directed to make a denovo assessment after affording due opportunity to the assessee to submit the requisite details. The assessee is also directed to make the necessary compliance before the Ld. AO.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30.06.2025.