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Facts
The assessee, an NBFC, received Rs. 5 lakh which was treated as an unexplained accommodation entry. The assessment was completed ex parte due to non-compliance by the assessee. The CIT(A) dismissed the appeal for non-prosecution.
Held
The Tribunal restored the matter to the Assessing Officer for de novo consideration in the interest of justice, allowing a last opportunity for the assessee to be heard. The Revenue did not oppose this.
Key Issues
Whether the assessee was denied a proper opportunity of hearing, and whether the matter should be remanded for fresh consideration on principles of natural justice.
Sections Cited
250, 144, 147
AI-generated summary — verify with the full judgment below
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKAR&
PER PRABHASH SHANKAR [A.M.] :- The above captioned appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] u/s 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years [A.Y.] 2011-12. 2. Facts in brief are that the assessee is an NBFC registered with RBI engaged in the business of investment and finance. Based on certain incriminating papers found during survey operation in the case of one
P a g e | 2 Memani Investment & Finance Pvt. Ltd.
M/s Dayal Tours and Travels,it was found that the assessee had received a sum of Rs 5 lakh an accommodation entry.This amount was treated as unexplained investment in the hands of the assessee by the ld.AO on account of its non compliance in the assessment proceedings which was completed in ex parte order u/s 144/147 of the Act .In the subsequent appeal also there was no proper compliance from the assessee who either
sought adjournments or made no response at all. Consequently, the ld
CIT(A) dismissed the appeal on account of non prosecution thereof by the assessee by holding that it had nothing to say in its defence w.r.t. to the addition made.
In the course of hearing the ld.AR of the assessee has contented that the allegation of the appellate authority is not correct in as much the assessee had made a written submission dated 19.06.2019 contesting the addition made by the AO .It was denied that the impugned sum was an accommodation entry rather it was a loan given to a party who also paid
interest thereon and also the amount was repaid on 11.11.2011. It was argued that the Ld. CIT(A) proceeded to pass ex parte order without giving effective opportunity of hearing to the assessee.The ld.DR has relied on the orders of authorities below.
P a g e | 3 Memani Investment & Finance Pvt. Ltd.
We have carefully considered all the relevant facts of the case,the contents of the orders and rival contentions. It is evident from the contents of the impugned order that despite several opportunities of hearing allowed, there was no compliance by the assessee before the AO. Considering all the relevant facts of the case, we are of the view that following the principles of natural justice, it would be fair and judicious
to allow a last opportunity of hearing to the assessee to explain the matter
before authorities below in the interests of justice. During the hearing, the Bench proposed for restoration of the matter to the ld.Assessing Officer for a de novo consideration. The Revenue did not oppose this plea. Thus, in the in the interest of justice, we deem it appropriate to send back the case for fresh consideration. The ld. AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles
of natural justice in the set aside remand proceedings for de novo adjudication of the entire matter. Needless to state, the assessee will
comply with notices and make available any details as deemed fit and sought by the Assessing authority .
Before parting with the subject,we would like to make it clear that setting aside the appeal for de novo consideration by us ,should not be construed in any manner affecting the merits of the case for which the P a g e | 4 Memani Investment & Finance Pvt. Ltd.
ld.AO is duly empowered to take an independent decision in accordance with the provisions of law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24/01/2025. ANIKESH BANERJEE PRABHASH SHANKAR "ाियकसद" /JUDICIAL MEMBER) (लेखाकारसद"/ACCOUNTANT MEMBER)
Place: मुंबई/Mumbai िदनांक /Date. 24.01.2025 Dhananjay Sr.PS
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent. 2. आयकर आयु" / CIT 3. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण DR, ITAT,
Mumbai गाड" फाईल / Guard file. 5. स"ािपत "ित //// आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.