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Facts
The assessee, a non-filer, had their assessment completed ex-parte under Section 147 after a notice under Section 148. The appeal to the CIT(A) was delayed but condoned, though it was also decided ex-parte. The assessee faced issues retrieving bank documents due to a merger, hindering timely submissions.
Held
The Tribunal held that the assessee was deprived of a fair opportunity of hearing due to unavoidable reasons, denying natural justice. Consequently, the matter was remanded to the Assessing Officer for fresh adjudication.
Key Issues
Whether the assessee was denied a fair hearing by being assessed ex-parte, and whether the matter should be remanded for de novo adjudication.
Sections Cited
250, 1961, 147, 144, 144B, 148
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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRIAMARJIT SINGH & SHRI ANIKESH BANERJEE
The instant appeals were filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Years 20014-15 to 2016-17, date of order28.11.2024 for all the three years.The impugned orders were emanated from the orders of the Assessment Unit, to 152/Mum/2025 Supreme Traders Income-tax Department passed (for brevity the “Ld. AO”), passed under section 147 read with section 144 read with section 144Bof the Act, date of order28/04/2023 for A.Y. 2014-15; 18/05/2023 for A.Y. 2015-16 & 21/04/2023 for A.Y. 2016-17.
At the outset, all the appeal have same set of facts and also have common issue; so for A.Y. 2014-15 is taken as lead case.
The assessee has taken the following grounds of appeal:-
“1.(a) The learned National Faceless Appeal Centre (NFAC), Delhi has dismissed the appeal of the appellant inspite of the fact that proper application for adjournment of hearing and grant of additional time for making the submission was filed (b) The learned NFAC, Delhi failed to appreciate the fact that the managing partner had expired and the other partner were not aware of the tax matters and did not have the required data for submission before the appellate authority (c) The learned NFAC, Delhi failed to appreciate the fact that an application had been made to the bank for retrieval of remittance certificates but since the ING Vysya bank had merged with Kotak Mahindra bank, the retrieval of documents by the bank was taking time. (d) The appellant prays that the additions made to the income of the appellant which represent realisation of export proceeds and capital contribution of the partners be deleted.
2. The appellant craves leave to add to, amend, alter and substantiate the above grounds at the time of appeal.”
The brief facts of the case are that the assessee is a non-filer of the income- tax return. The notice under section 148 of the Act was issued and assessment was completed under section 147 of the Act. The income was assessed at Rs.3,77,20,223/-. The assessee was unable to participate in the assessment to 152/Mum/2025 Supreme Traders proceeding. So the assessment was completed under section 144 of the Act as ex-parte. The assessee filed appeal before the Ld. CIT(A) by challenging the assessment order with delay of 190 days. The Ld.CIT(A) condoned the delay, but the order was passed ex-parte. The Ld.CIT(A) allowed hearing in different dates, but assessee filed adjournment application on the dates of hearing. Finally, the appeal order was passed and rejected the appeal of the assessee. Being aggrieved on the appeal order, the assessee filed appeals before the Tribunal.
The Ld. AR appeared and argued that the Assessing Officer made additions in all 3 years based on the information received in the case of entity named M/s Dishita Gems Pvt Ltd Surat. Ld. AR has denied the transactions with M/s Dishita Gems Pvt Ltd., Surat. She stated that the assessee had not allowed the opportunity to prove this fact. The firm had dissolved in 2017, and one of the Managing Partner had expired, the other partner was not aware of the notices u/s 148 sent by the Ld. AO. The assessee became aware of the assessment orders passed only upon receiving the physical recovery notice from the department. The above facts have been mentioned before the Ld. CIT(A) in the condonation application and accepted by the Ld. CIT(A) in his order and the CIT(A) has condoned the delay in filing of the appeal before the Ld. CIT(A). The Ld. AO confirmed the additions on account of the credit received by the assessee in the bank account during the respective assessment years. However these receipts are towards the export realization of sales made by the assessee and in some cases amount received from the partners. During the course of appellate proceedings the appellant made an application with its bank ( ING Vysa Bank now merged with Kotak Bank) to retrieve the documents relating to the receipt of the sale to 152/Mum/2025 Supreme Traders proceeds. Delay in receiving the documents from bank as the account was made dormant by the bank. The bank was taking time and assessee could not make the timely submissions with the Ld. CIT(A) and had to keep requesting for the adjournment as is evident from the CIT(A) order. The Ld. AR prayed that in the above circumstances and in the interest of natural justice to the assessee, the Ld. AR requests that the matter be restored to the file of the Ld. AO for fresh consideration of the matters.
The Ld.DR argued and had not made any objection against the fact narrated by the Ld. AR.
We heard the submissions and considered the documents available in the record. We find that the appeal and assessment order was passed exparte. The reasons for non appearance before both the authorities have duly been explained by the Ld.AR and we find that the assessee was prevented by unavoidable reasons. Therefore, we are of the opinion that the assessee was deprived of fair and just opportunity of hearing. Therefore, natural justice was denied to the assessee. Accordingly, we remand the matter to the file of the Ld.AO for further adjudication de novo. The assessee has placed that the only issue for consideration is the issue of verification of sale and export certificates duly issued by the banking authority. We are not expressing our view on the merit of the case which will impair the set aside assessment proceeding. Needless to say, the assessee should get a reasonable opportunity of hearting in the set aside assessment proceedings. The assessee is at liberty to file any evidence and documents that may be required by the Ld. AO in the set aside assessment proceeding, as per law. On the other hand, the assessee should be diligent and
In the result, the appeal bearing is allowed for statistical purpose.
The facts and circumstances in these appeals are identical to the appeal in which we have already decided above. Therefore, the decision arrived at therein shall apply mutatis mutandis to these appeals also.