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Facts
The assessee's case was reopened based on information about accommodation entries, and a notice under Section 148 was issued. Due to non-compliance in establishing the genuineness of transactions and explaining cash deposits, the assessment was completed ex-parte under Sections 144, 147, and 144B, leading to additions under Section 68 (unexplained credit) and Section 69A (unexplained money). The assessee's appeal to CIT(A) was dismissed due to non-compliance with notices.
Held
The Tribunal condoned the 49-day delay in filing the appeal, finding reasonable cause. Noting that the CIT(A) had issued notices allowing very short compliance time (less than two weeks), the Tribunal, in the interest of justice, restored the matter back to the CIT(A) for fresh consideration on merits, directing the assessee to make requisite compliance.
Key Issues
Whether the CIT(A) provided adequate opportunity for compliance before dismissing the appeal; validity of ex-parte assessment and additions made under Section 68 and 69A; and condonation of delay in filing the appeal before the Tribunal.
Sections Cited
250, 144, 147, 144B, 68, 69A, 148
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Before: SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL & SMT. RENU JAUHRI
सुिवधई की िधरीख / Date of Hearing 08.05.2025 घोर्णध की िधरीख/Date of Pronouncement 30.05.2025 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 22.10.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2019-20.
The assessee has raised the following grounds of appeal:
A.Y. 2019-20 Clifford Dominic Colaco “This appeal is filed by assessee before Honorable Tribunal against the appellate order of the learned Commissioner of Income Tax Appeal-NFAC- passed u/s 250 of Income Tax Act, 1961 dated 22.10.2024 for AY 2019-2020 which in turn arise from the assessment order passed by Assessing Officer. On the facts and circumstances of case the learned assessing officer, ITO Ward-27(1) while completing assessment and passing assessment order u/s 144 r.ws.147 rw.s. 1448 of the Income Tax Act dated 23.07.2074 for A.Y.2019- 2020 has erred in assessing total income of assessee at Rs.4,35,07,984/- as against returned income of Rs.5,43,287/- thereby making total addition of Rs 4,29,64,697/ as follows: (1) Addition of Rs 1,71,52,519/- as unexplained credit u/s.68 (2) Addition of Rs. 2,58,12,178/-as unexplained money u/s 69A. Aggrieved by assessment order the assessee filed appeal before CIT(A) on 26.03.2024, Subsequently, the appeal was migrated to National Faceless Appeals Centre (NFAC) On appeal the learned Commissioner of Income Tax Appeals National Faceless Appeals Centre (NFAC) has upheld the action of AO and confirming the order passed by AO dismissed the appeal of assessee.”
Brief facts of the case are that the assessee filed return declaring income of Rs. 5,43,290/- on 22.11.2019. The case was reopened after receipt of information from the Investigation Wing that the assessee is a beneficiary of accommodation entries. Accordingly, a notice u/s 148 was issued on 23.03.2021. The assessee was given several opportunities to establish the genuineness of sales and purchase transactions amounting to Rs. 1,71,52,519/- shown from M/s Jash Dealmark Ltd. and M/s Reena Tinaaz Pvt. Ltd. However, in the absence of any compliance, the assessee was found to have deposited cash amounting to Rs. 2,58,12,178/- in his bank account with Mahanagar Co- operative Bank Ltd. As no compliance was made to the notices issued by the Ld. AO, the assessment was completed u/s 144 r.w.s. 147 r.w.s. 144B of the Act at an income of Rs. 4,35,07,984/- after making the following additions: Unexplained money u/s 69A Rs. 2,58,12,178/- A.Y. 2019-20 Clifford Dominic Colaco Unexplained expenditure u/s 68 Rs. 1,71,52,519/- 4. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Vide order dated 22.10.2024, the assessee’s appeal was dismissed as no compliance was made to all the three notices issued by Ld. CIT(A). The assessee has filed an appeal before the Tribunal against the order of Ld. CIT(A).
At the outset, it is noticed that the appeal is filed after a delay of 49 days. The assessee has filed an application for condonation of delay, along with an affidavit explaining the circumstances resulting in the delay. After perusal of the same, we are of the view that there was a reasonable cause for the delay in filing of appeal, hence, the same is hereby condoned.
Before us, Ld. AR has submitted that all the three notices were issued within one month, giving a very short time for compliance by the Ld. CIT(A). As such, the assessee was not able to make the requisite compliance. He has, therefore, requested that the matter may be remanded back to Ld. CIT(A) for fresh consideration. Ld. DR has not controverted the above proposition.
We have heard the rival submissions and perused the material placed before us. We notice that Ld. CIT(A) had issued three notices, dated 10.09.2024, 20,09.2024 and 25.09.2024, giving the assessee less than two weeks’ time to A.Y. 2019-20 Clifford Dominic Colaco make requisite compliance. Accordingly, in the interest of justice, we deem it appropriate to restore the matter back to CIT(A) for fresh consideration on merits after giving due opportunity to the assessee. The assessee is also directed to make requisite compliance before Ld. CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30.05.2025.