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Facts
The assessee filed an appeal against an ex-parte order by the CIT(A) which confirmed the AO's addition of Rs. 1,56,32,500 on account of foreign remittances. The assessee argued that the remittance was for Assessment Year 2015-16 and not the impugned year 2016-17.
Held
The Tribunal held that the ex-parte order by the CIT(A) did not go into the merits of the case. Considering the materials available, no further investigation was required, and the addition made by the AO was not justified as it pertained to a different financial year.
Key Issues
Whether the addition of foreign remittances was justified for the impugned assessment year when the evidence suggested it pertained to a prior year, and whether the ex-parte order by the CIT(A) was passed without considering the merits of the case.
Sections Cited
250, 143(2), 142(1), 271(1)(b), 40a(i), 156, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI.LAXMI PRASAD SAHU & SHRI.KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This appeal is filed by the assessee against the ex-parte Order passed bythe CIT(A)under section 250 of the Act, vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1059126841(1) dated 28.12.2023.
At the outset of hearing, it was noticed that assessee has filed appeal with a delay of 372 days. In this regard, assessee filed affidavit explaining the reasons for delay in filing the appeal. Considering the reasons explained in the above petition, we noted that assessee had sufficient cause for not filing appeal within time. Therefore, relying on the judgment of the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. MST Katiji
The learned Counsel further submitted that notice issued by the learned CIT(A) was not seen as it might have settled in spam folder. Therefore, appeal could not be presented at the time of appellate proceedings.
Briefly stated the facts of the case are that assessee filed return of income on 30.09.2016admitting income of Rs.1,75,20,460/-. The case was selected for limited scrutiny. Accordingly, notice under section 143(2) of the Act dated 07.09.2017 was issued and served on assessee on 14.09.2017. Subsequently, other statutory notices were issued to the assessee. The case was selected for limited scrutiny to verify whether outward foreign remittances are from disclosed sources and appropriate withholding and reporting obligations have been complied with. Accordingly, assessment proceedings were initiated by issue of notices under section 142(1) of the Act on various dates beginning from 18.07.2018 and 07.09.2018 calling for information in connection with the scrutiny assessments. Assessee made manual submission in response to notice under section 142(1) dated 18.07.2018 producing certain details such as balance sheet, P&L account and bank statements. Subsequently assessee did not respond. A penalty notice under section 271(1)(b) of the Act was issued to the assessee on 26.10.2018. Assessee did not respond to the show cause notice dated 28.11.2018. Since the case was getting time barred on 31.12.2018 and there was no compliance to the statutory notices issued under section 142(1) of the Act, disallowed the outward foreign remittances made by the assessee to the extent of Rs.1,56,32,500/- in the absence of any substantiating evidences / documents to prove, was treated as income of the assessee and completed the assessment on 12.12.2018.
Aggrieved from the above Order, assessee filed appeal before the learned CIT(A). The learned CIT(A) fixed the case for hearing on different dates but there was no response from the assessee’s side. Accordingly, he confirmed the Order of the AO.
Aggrieved from the above Order of the learned CIT(A), assessee filed appeal before the Tribunal. The learned counsel reiterated the submissions made before the lower authorities and he further submitted that during the course of assessment proceedings, the entire documents along with bank statements, Form 15CA were submitted. He further submitted that the amount considered by the AO for making addition under section 40a(i) of the Act of Rs.1,56,32,500/- is not related to the impugned Assessment Year. The bank has issued certificate for the amount remitted through Kotak Mahindra Bank which is placed at Paper Book Page No.17 and Form 15CA dated 08.01.2016, 11.02.2016, 22.02.2016, 26.02.2016 and 31.03.2015 were produced during the course of assessment proceedings which is available at Paper Book Page No.18-32 and these documents are also available in the income tax website. The AO could have verified. He further noted that Form 15CA dated 31.03.2015 is available at Paper Book Page No.30 to 32 in which amount of Rs.1,56,32,500/- was remitted which is related to Assessment Year 2015-16. Amount referred by the AO is not related to this year.
On the other hand, learned DRrelied on the Oder of the lower authorities and submitted that several opportunities were granted to the assessee to substantiate its case during the appellate proceedings but assessee did not avail and for non-compliance, the AO issued penalty notice under section 271(1)(b) of the Act. It clearly shows non co-operative nature and disregarding the notice issued by the Revenue authorities.
Page 5 of 6 8. Considering the rival submissions, we noted that case was selected for scrutiny to verify the amount remitted outside India and whether assessee has complied with the income tax provisions or not and has remitted the amount out of disclosed source. As per the submission of the assessee, From15CA was available with the Income Tax Department. However, the AO has accepted that financial statement, P & L A/c were submitted during the course of assessment proceedings and he has issued penalty notice under section 271(1)(b) of the Act. However, on going through the Paper Book filed by the assessee, the documents submitted was available at the time of assessment proceedings. Further, we noted that Order of learned CIT(A) is ex-parte without going into the merits of the case. We noted on the basis of mateirals produced before us and documents produced before the AO, no further facts are required to be investigated. Therefore, we relied on the judgment of Hon’ble High Court of Orissa reported in 336 ITR 112 in which it has been held as under:
Law is well settled once the materials are available on record, the appellate court should have disposed of the case on the merits to taking these materials into consideration and there is no need to direct remand
Here the dispute is only regarding amount remitted of Rs.1,56,32,500/- in the Assessment Year 2016-17 as per the AO. The bank statement was also filed during the course of assessment proceedings and bank certificate was also produced but the amount shown as per Form 15CA and as per Income Tax data does not tally and the disputed amount tallied with Form 15CA. Therefore the AO is not justified to make addition for the amount remitted in the Financial Year 2014-15 and the Revenue could not bring any adverse material to substantiate the findings of AO. From the arguments of learned DR that the assessee’s approach is disregarding the notices issued by the Page 6 of 6 Revenue authorities and not co-operating in the appellate proceedings in spite of notices issued by the learned CIT(A). We are imposing a cost of Rs.10,000/- to the assessee. Assessee has to show the proof of payment of cost to the AO before giving OGE. Needless to say that reasonable opportunity of being heard be given to the assessee. Accordingly, we allow appeal of the assessee is allowed.
In the result, appeal filed by the assessee is allowed.