LAKSHMISHA BHANDARY,MANGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE - 1, MANGALURU

The brief facts of the case are that the assessee is a builder. The assessee filed his return of income on 31/12/2022. The said return was processed u/s. 143(1) and the same was accepted.

Thereafter a survey u/s. 133A was conducted on 19/07/2022. Subsequently, the return was selected for complete scrutiny under CASS and notice u/s. 143(2) was issued. At the time of survey, several discrepancies were noticed like on-money receipts, unaccounted expenses, unexplained expenditure, notional income from house property and cash refunds. Thereafter notice u/s. 142(1) was issued for which the assessee furnished the details through online on 29/11/2023. Again another notice u/s. 142(1) was issued asking the assessee to furnish further details / documents. The assessee had not responded to the said notice. The AO summarised the discrepancies and issued a show cause notice for adding the incomes to the returned income. The assessee filed their reply after the due date for filing the same. The AO considered the submissions which are all vague and questioning the legality of the scrutiny assessment without giving any valid reasons on merits even though the assessee had admitted the discrepancies at the time of survey and post survey. Therefore the AO had made the assessment u/s. 144 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A). In spite of several notices issued to the assessee, the assessee had not responded and filed any written submissions and documents in support of the grounds raised by him. Therefore the Ld.CIT(A) had decided the appeal on merits and dismissed the same.

The assessee has challenged the said ex-parte order before this Tribunal with a delay of 52 days.

In support of the said delay, the assessee also filed an application to condone the said delay. In the said application, the assessee had explained the reasons for the delay and submitted that the assessee was suffering from Acute gastroenteritis and admitted to A.J. Hospital & Research Centre, Mangaluru. Thereafter he was advised for complete rest but not satisfied with the recovery, the assessee changed the treatment to Ayurveda and the said treatment took two more months for recovery and therefore the delay has been occurred. Considering the fact that the delay is only 52 days and the same has also been properly explained, we are condoning the said delay of 52 days in filing this appeal and proceeded to decide the appeal on merits.

At the time of hearing, the Ld.AR submitted that even though all the details are filed before the AO, the AO had not considered the same and therefore the appeal has been filed before the Ld.CIT(A) but unfortunately the assessee because of his ill health was not able to appear before the Ld.CIT(A) and therefore the Ld.CIT(A) had decided the issue ex-parte against the assessee. The Ld.AR therefore submitted that if an another opportunity has been granted, they will be able to convince the Ld.CIT(A) and the Ld.AR prayed for one more opportunity to appear before the Ld.CIT(A).

The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.

We have heard the arguments of both sides and perused the materials available on record.

At the outset, we find that the assessment order as well as the appellate order are both ex-parte orders. It is the case of the Ld.AR that all the details are filed before the AO but unfortunately the details and documents were not considered by the AO and a best judgment assessment was made. Before the Ld.CIT(A) also, the assessee was not able to appear because of his ill health.

Considering the above said facts and in order to render substantial justice, we are inclined to grant one more opportunity to the assessee to appear before the Ld.CIT(A). We, therefore set aside the order of the Ld.CIT(A) and remit this issue to the file of the Ld.CIT(A) for deciding the issue afresh, after hearing the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.