Loading judgment…
Facts
The assessee filed an appeal against an assessment order under Section 144. The assessee had made cash deposits during demonetisation but did not file a return. Notices were issued, and in absence of response, the AO estimated income and made additions. The CIT(A) had passed conflicting orders regarding the appeal.
Held
The Tribunal noted that the assessment order was passed under Section 144 without hearing the assessee, and the CIT(A) had passed conflicting orders. Therefore, the Tribunal directed the AO to decide the issue afresh after providing the assessee an opportunity to be heard and furnish details.
Key Issues
Whether the assessment order passed under Section 144 without hearing the assessee is valid and whether the conflicting orders of CIT(A) require a fresh adjudication.
Sections Cited
144, 142(1), 133(6), 249(3), 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Mr Ramakrishna Govanahhaly (the assessee/appellant) against the appellate order passed by National faceless appeal Centre, Delhi (the learned CIT – A on 4 June 2025, wherein the appeal filed by the assessee against the assessment order passed under section 144 of the income tax act, 1961 (the act) on 26
September 2021 assessing the total income of the assessee at ₹ 3,143,946/– was dismissed. The assessee is aggrieved and is in appeal before us.
The fact shows that the assessee has made cash deposit during demonetisation period but did not file his return of income within the due date. Therefore notice under section 142 (1) of the act was issued on 30/11/2017 calling for the return of income. The assessee did not file any return of income. Several notices were issued including show cause notice on 4 September 2019 which was not responded to by the assessee and therefore in absence of any details, the learned assessing officer made the addition of entire cash deposit made during the demonetisation period as unexplained investment. It was also found as per enquiry under section 133 (6) of the act that assessee has been running his business wherein the gross receipts are to the tune of rupees one crore 50,24,952. As assessee has not furnished any details the learned assessing officer further estimated the income of the assessee at the rate of 8% of the gross response receipts. The learned assessing officer passed an assessment order under section 144 of the act we had in the addition of ₹ 1,941,500/– of cash deposit and business income of ₹ 1,201,996/– was made determining the total income of the assessee at ₹ 3,143,496/–.
Assessee preferred the appeal before the Commissioner of income tax (appeals) by on 25/2/2020 against the above assessment order. No hearing notices were received by the assessee against that appeal. The assessee was not aware that there is a migration of the appeal of the assessee to the National faceless appeal Centre, Delhi. Therefore assessee once again filed an online appeal on 13/6/2023 after gap of more than three years. Subsequently it was found that the original appeal filed by the assessee with CIT appeal masher was decided on 25/10/2024 holding that as the assessment order has been passed under section 144 of the act the issue is restored back to the file of the learned assessing officer. However, in conclusion the learned CIT – A that appeal is set-aside.
Subsequently another order was passed on 4/6/2025 by the NFAC in respect of the second appeal wherein the appeal of the assessee was dismissed. The reason given was that the appeal is dismissed in limine the as not maintainable on account of delay in filing, and no conversion on donation is granted under section 249 (3) of the income tax act, 1961. Further the appeal of the assessee has already been decided is set-aside against the same order of the AO under section 144 on 26 September 2019 by the CIT appeal on 28/10/2024. Accordingly the appeal of the assessee is dismissed as infructuous for statistical purposes as appeal has already been decided.
Assessee is in appeal against the appellate order passed by NFAC dismissing the appeal of the assessee holding as above.
The learned authorised representative vehemently supported that the order has already been passed by the learned CIT – A restoring the appeal of the assessee wherein the assessment order has been passed
under section 144 of the income tax act in terms of proviso to section 251 (1) (a) of the act, the above order passed by the NFAC is unsustainable.
The learned departmental representative vehemently supported the order of the learned CIT – A answer that when the appeal of the assessee has been already allowed by the original order of the learned CIT – A dated 28/10/2024, the assessee cannot be said to be aggrieved and the appeal deserves to be dismissed.
We have carefully considered the rival contention and perused the orders of the learned lower authorities. In this case on against the same assessment order to appeals filed by the assessee and to orders of the learned CIT – A have been passed. The assessee is aggrieved with both of them. However the simple issue involved in this appeal is that the assessment order has been passed under section 144 of the income tax act. The first order of the learned CIT – A has restored the appeal back to the file of the learned assessing officer but has not stated that the appeal of the assessee is allowed for statistical purposes and the matter is restored back by the learned CIT – A to the file of the learned assessing officer to decide it afresh. The second appellate order passed dismissed the appeal of the assessee. In view of these facts it is apparently clear that there is no specific direction about the decision in the appeal of the assessee.
On careful perusal of both the appellate orders now we direct the learned assessing officer to decide the issue afresh as the original
assessment order has been passed under section 144 of the income tax act and assessee was not heard. The learned assessing officer may issue a notice to the assessee, the assessee must furnish the necessary details before the learned assessing officer, the learned AO thereafter may decide the issue in accordance with the law.
Accordingly appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 30th day of September, 2025.