Loading judgment…
Facts
The assessee filed a return of income, which was selected for scrutiny under CASS due to a discrepancy between reported income and turnover. Notices were issued, but the assessee did not provide satisfactory responses or substantiating evidence.
Held
The Tribunal noted that the assessee failed to represent her case before the lower authorities and did not comply with notices. However, in the interest of justice, the matter is remitted back to the CIT(A) for a fresh opportunity.
Key Issues
Whether the assessee should be granted a further opportunity to substantiate her claim before the CIT(A) after failing to comply with notices from the AO and CIT(A)?
Sections Cited
143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the assessee against CIT(A)’s order vide DIN &Order No: ITBA/NFAC/S/250/2024-25/1070147553(1) dated 06.11.2024.
Briefly stated the facts of the case are that the assessee filed return of income on 02.11.2022 declaring income of Rs.1,11,66,600/-. The case was selected for scrutiny under CASS to examine low income from TCS receipts Liquor and Turnover shown in ITR is substantially lower in comparison to turnover shown in GSTR 9C return. Accordingly, notice under section 143(2) of the Act was issued on 01.06.2023. Subsequently, other notices were issued to the assessee and details were called for. During the course of assessment proceedings, the AO issued several notices to the assessee. But there was no response and show cause notice was also issued to the assessee which is reproduced in the Assessment Order. Assessee filed reply but the same was not accepted and AO made various additions.
Aggrieved from the above Order, assessee filed appeal before the CIT(A) and during the appellate proceedings, various notices were issued to the assessee but the same were not complied with. Accordingly, for want of representation from the assessee’s side, appeal was dismissed.
Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel submitted that notices issued by the CIT(A) might have got settled in the spam folder and hence was not noticed. Therefore, assessee was unable to represent her case and he further submitted that the assessee’s intention was not to disrespect the notices issued by the Revenue authorities and requested and undertook that if a chance is given to the assessee, assessee will substantiate her claim with supporting evidences.
On the other hand, learned DR relied on the Order of authorities and submitted that during the assessment proceedings as well as before the learned CIT(A), assessee did not represent her case. Therefore, both the lower authorities were bound to decide the case ex-parte and the learned DR objected to any 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 case was selected for scrutiny under CASS with the reasons stated that there is difference in the turnover reported in financial statements and various notices were issued by the AO but the assessee could not substantiate the same with the supporting documentary evidences before the CIT(A) and learned CIT(A) has given chance to the assessee for substantiating his claim but was not complied with.
Considering the submissions of the assessee and in the interest of justice, we are remitting this issue back to the jurisdictional CIT(A) with a cost of Rs.5,000/-. The learned CIT(A) is directed to give reasonable opportunity of being heard to the assessee and decide the issue as per law and assessee is directed to prove the cash deposits with documentary evidence to substantiate her claim and not to seek unnecessary adjudication 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 is allowed for statistical purposes.