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Facts
The assessee, an individual, did not file his return of income. The AO initiated proceedings under Section 148 and later Section 142(1) notices were issued due to cash transactions. The assessee did not respond to these notices, leading to an ex-parte assessment under Section 69A for unexplained money.
Held
The Tribunal set aside the ex-parte orders of the lower authorities and remitted the issue to the AO for a de novo assessment after hearing the assessee. The assessee was directed to cooperate for expeditious completion of the assessment.
Key Issues
Whether the ex-parte assessment order is sustainable when the assessee claims to have records to prove the source of cash deposits and did not respond due to unfamiliarity with e-proceedings? Whether the jurisdictional AO had the jurisdiction to initiate proceedings under Section 148 after the introduction of the e-assessment scheme?
Sections Cited
148, 142(1), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the ex-parte order of the NFAC, Delhi dated 27/03/2025 in respect of the A.Y. 2015-16.
The brief facts of the case are that the assessee is an individual and he has not filed his return of income. The AO based on the information had found that the assessee had carried out the cash transactions during the A.Y. 2015-16 and therefore a notice u/s. 148 was issued. The assessee had not responded to the said notice and thereafter several notices u/s. 142(1) were issued and also a show cause notice was issued. The assessee had not Page 2 of responded to any of the notices and therefore the AO had treated the said cash deposits as unexplained money u/s. 69A of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A). Even before the Ld.CIT(A), the assessee had not responded and therefore the Ld.CIT(A) had decided the appeal on merits and dismissed the same on the ground that the assessee had failed to produce any evidence / submissions in support of the appeal proceedings.
As against the said order, the present appeal has been filed by the assessee before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessee being not familiar with the e-proceedings had not viewed the portal to reply to the various notices issued by the AO. The Ld.AR submitted that they are having all the records to show that the assessment made ex-parte is not sustainable. The Ld.AR also filed an application to admit the additional grounds in which they raised a ground that the order of the jurisdictional AO is against the e-assessment scheme and therefore consequential proceedings are also bad in law and relied on the judgment of the Hon’ble Jurisdictional High Court in the case of Re Ramachandra Reddy Ravi Kumar vs. DCIT in W.P. No. 28182 of 2024 and also furnished a copy of the judgment and prayed to allow the appeal on this legal ground.
The Ld.DR relied on the orders of the lower authorities and submitted that the definition of assessing officer will include both the jurisdictional AO as well as the faceless AO and therefore the order cannot be found fault on the said reasoning. Further, the Ld.DR brought to our notice that the judgment of Hon’ble Bombay High Court in the case of Hexaware Technologies Ltd. vs. ACIT reported in 464 ITR 430 was challenged before the Hon’ble Supreme Court and prayed that the said legal ground may not be decided at this stage.
Page 3 of We have heard the arguments of both sides and perused the materials available on record.
The assessee raised a legal plea that the jurisdictional assessing officer has no jurisdiction to initiate proceedings u/s. 148 of the Act after the introduction of the e-assessment scheme. We have also considered the fact that the issue is subjudice before the Hon’ble Supreme Court and therefore at present, we are not adjudicating this issue and left it open to the assessee to raise the same as and when the same is required.
We have also considered the fact that the assessment order as well as the order of the Ld.CIT(A) were passed ex-parte. Before us, it is the contention of the assessee that the assessee had all the records to show that the cash deposits are from the known sources.
Considering the said facts, we are inclined to set aside the order of the lower authorities and remit this issue to the file of the AO for making denovo assessment after hearing the assessee. We also make it clear that the assessee should co-operate with the department to complete the assessment as expeditiously as possible otherwise it is open to the AO to pass an order in accordance with law.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 31st December, 2025.