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Facts
The assessee, an individual, did not file a return of income for AY 2019-20. The case was reopened based on information about financial transactions aggregating to Rs. 23,70,438. The AO passed an ex-parte assessment order under Section 147 r.w.s. 144, determining the total income at Rs. 23,70,438 as unexplained.
Held
The Tribunal observed that the assessee claimed to be a non-resident unaware of the notices. Considering principles of natural justice, the Tribunal granted one more opportunity to the assessee to present their case before the AO.
Key Issues
Whether the CIT(A) erred in dismissing the appeal in limine on grounds not applicable to the assessee and without providing sufficient opportunity. Whether the additions made by the AO were justified given the assessee's claim of non-residency and lack of awareness of notices.
Sections Cited
250, 249(4)(b), 144, 147, 6, 139, 148, 148A, 142(1), 195, 285BA(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
(Assessment Year: 2019-20) Shaju Raman Arangath ITO-Ward 3(2), Kalyan Income Tax Department, 2nd Floor, 502, Apollonia, Triveni Laurel, Next to RTO, Near Birla School, Kalyan (W) – Vs. Rani Mansion, Murbad Road, 421301. Kalyan – 421301. PAN/GIR No. AMMPA5973C (Assessee) : (Respondent) Assessee by : Shri. Shashank Mehta Respondent by : Shri. P. D. Chougule SR. DR. Date of Hearing : 18.02.2025 Date of Pronouncement : 19.02.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals), Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2019-20.
The assessee has raised the following grounds of appeal:
1. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine alleging the violation of the provision of section 249(4)(b) on the part of the Appellant whereas the said provisions were not applicable to the Appellant for the relevant Assessment Year.
2. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine (A.Y. 2019-20) Shaju Raman Arangath by not providing the Appellant with sufficient and adequate opportunity to furnish submission/explanation/clarifications.
3. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine by not providing the Appellant with any opportunity of being personally heard despite specific request for the same.
4. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in not considering the fact and law that the Id. Assessing Officer has erred in passing the assessment order ex-parte under section 144 without properly serving the notices upon the Appellant.
5. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in not considering the fact and law that the Id. Assessing Officer has erred in not correctly determining the residential status of the Appellant as per the provisions of section 6 of the Act.
6. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in reopening the matter for the relevant Assessment Year 2019-20 when there was complete absence of any income chargeable to tax having escaped assessment; thereby violating the jurisdictional condition as provided in section 147.
7. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition of Rs. 23,70,438/-alleging it to be escaped taxable income; disregarding the factual and legal matrix of the case.
8. In the Facts and Circumstances of the case and in Law, the Ld. Commissioner of Income Tax (Appeals) has erred in disregarding the Fact and Law that the Appellant was not obligated to furnish the return of Income pursuant to the provisions of sub- section (1) of section 139.”
Brief facts of the case are that the assessee is an individual and has not filed his return of income for the year under consideration. The assessee’s case was reopened based on the information shared and uploaded through ‘Insight Portal’ in accordance with the ‘Risk Management Strategy’ formulated by CBDT, vide notice u/s. 148, dated 25.03.2023 pursuant to order u/s. 148A(d), dated 24.03.2023, where the assessee is said Sr. No. Information Description Transaction Code Amount (in Rs.) 1. FRM-61B Statement of reportable account u/s. 1,68,544 285BA(1) 2. SFT-005 Purchase of debentures year for 22,00,000 acquiring bonds or debentures issued by the company or institution 3. TDS-195 TDS Statement – payment made to 1,894 non-residents (Section 195) Total 23,70,438 4. The ld. AO issued notices u/s. 148 and 142(1) on several dates and then passed the assessment order u/s. 147 r.w.s. 144 of the Act, dated 09.02.2024, being the best judgement assessment, where the ld. AO determined the total income at Rs. 23,70,438/, towards financial transactions which remained unexplained and undisclosed due to non- compliance by the assessee.
Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 06.11.2024, dismissed the appeal filed by the assessee on the ground that the assessee has violated the provisions of Section 249(4)(b) of the Act, where the assessee has failed to make payment of the amount equal to the advance tax which was due on his income as per Section 249(4)(b) of the Act.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. AO before (A.Y. 2019-20) Shaju Raman Arangath the first appellate authority but the same was dismissed by the ld. CIT(A) for non- compliance of provisions of Section 249(4)(b) of the Act, where it is a requirement that no appeal shall be admitted unless at the time of filing of the appeal in case where the assessee has not filed his return of income, the assessee has paid an amount equal to an amount of advance tax which was payable by him.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee is a non-resident residing in Qatar and that the assessee was unaware of the notices issued by the ld. AO. The ld. AR further stated that the ld. CIT(A) has erred in dismissing the appeal without giving reasonable opportunity to the assessee on the grounds of dismissal. The ld. AR further stated that the assessee has made an investment in debentures out of the savings from his foreign income and the same cannot be held to be an unexplained income. The ld. AR prayed that the assessee be given one more opportunity to substantiate his claim before the ld. AO.
The ld. DR on the other hand controverted the said fact and stated that the assessee has been non-compliant before both the lower authorities. The ld. DR relied on the order of the lower authorities.
In the above factual matrix of the case, it is observed that the assessee has not been compliant during the assessment proceedings and consequently the ld. AO has passed an ex parte assessment order u/s. 147 r.w.s. 144, being the best judgment assessment. The ld. AR contended that the assessee was a non-resident working and residing in Qatar since 2012, was unaware of the various notices issued by the ld. AO. Upon considering the same, we deem it fit to extend the assessee with one more opportunity (A.Y. 2019-20) Shaju Raman Arangath to present his case before the ld. AO along with all documentary evidences in support of his contentions, by adhering to the principles of natural justice and in the interest of justice dispensation. The assessee is directed to comply with the proceedings before the ld. AO and the ld. AO is directed to decide the issue on the merits of the case based on the submission of the assessee and in accordance with law. We have not expressed any view on the merits and therefore we remand all these issues back to the file of ld. AO for de novo assessment.