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Facts
The assessee filed a return of income declaring Nil income and was selected for scrutiny. Despite several notices, the assessee did not respond, leading to an ex-parte assessment where gross receipts were treated as income due to lack of proof for expenditure claims. The CIT(A) also dismissed the assessee's appeal ex-parte due to non-response.
Held
The Tribunal noted that the case was decided ex-parte by both lower authorities for non-prosecution and considered the entire receipts as income. However, considering the assessee's prayer and in the interest of justice, the issue was remitted back to the AO for fresh consideration with effective opportunities.
Key Issues
Whether the lower authorities were justified in deciding the case ex-parte without affording sufficient opportunity to the assessee, and whether the receipts should have been treated as income without proper consideration of expenditure claims.
Sections Cited
143(2)
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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 by the CIT(A) vide DIN and Order No. ITBA/NFAC/S/250/2023- 24/1054711912(1) dated 28.07.2023.
Briefly stated, the facts of the case are that assessee filed return of income electronically on 30.03.2018 declaring Nil income. The case was selected for scrutiny under CASS. Accordingly notice under section 143(2) of the Act was issued on 10.08.2018 through email to the email address registered in the Department. During the course of assessment proceedings several notices were issued to the assessee but there was no response from the assessee’s side and notice through speed post was also sent to the assessee on 17.12.2019. Inspite of that there was no response from the assessee’s side and the AO noted that the assessee has shown gross receipts for the year amounting to Rs.2,69,04,364/- and the receipt has been claimed as application of income but for want of proof of claim of expenditure, the entire receipts were treated as income for the year of the assessee and the AO completed the assessment on the basis of materials available before him.
Aggrieved from the above Order, assessee filed appeal on 29.01.2020. Later on the case migrated to NFAC in terms of notification No.76/2020 vide F.No.370142/33/2020-TPL dated 25.09.2020. During the course of appellate proceeding, the learned CIT(A) issued several notices to the email id : ttg.gowda@gmail.com available in the ITBA portal and on 15th June and 21st July notices were sent on 2 email IDs as noted by the CIT(A) but there was no response and learned CIT(A) observed that the assessee is not interest to pursue the appeal. In the absence of any reply from the assessee, the matter was decided ex-parte on the basis of material available before him and dismissed the appeal of the assessee.
Aggrieved from the above Order, assessee filed appeal before the Tribunal.
The learned Counsel submitted that the concerned person who was looking after the accounts of the assessee has left the institution, therefore, the notices issued by the AO could not be seen and further submitted that the case migrated to NFAC as per the scheme of notification noted above. The notice could not reach assessee or the notices might have settled in the spam folder. The learned Counsel requested and undertook that if a chance is given to the assessee, assessee will represent its case diligently and it will fulfil the requirements of the AO.
On the other hand, learned DR relied on the Order of the lower authorities and submitted that both the authorities have given several opportunities to the assessee but the assessee could not justify the application of income as claimed in ITR and objected giving further chance to the assessee.
Considering the rival submissions and on perusal of the entire material available on record and Orders of authorities below, we noted that the assessee has filed Paper Book, case law compilation containing page Nos.1 to 97 and we further noted that the case has been decided by both the authorities ex- parte for non-prosecution by the assessee and AO has considered the entire receipts as income. The principal theory to bring to tax of income is real income theory. However, in this case considering the prayer of the assessee and in the interest of justice we are remitting this issue back to the file of JAO for a fresh consideration and decide the issue as per law after giving 4 effective opportunities to the assessee. Assessee is directed to produce requisite documents to supports its case and not to seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.
In the result, appeal filed by the assessee isallowed for statistical purposes.