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Facts
The assessee failed to respond to notices from the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)], leading to ex-parte assessment and dismissal of appeals. The assessee sought condonation for the delay in filing the current appeal, citing inadvertent omission.
Held
The Tribunal condoned the delay in filing the appeal due to sufficient and reasonable cause. It set aside the orders of the AO and CIT(A) and restored the matter to the AO's file, granting the assessee another opportunity to present their case and provide necessary documentation.
Key Issues
Whether the assessee's delay in filing the appeal should be condoned, and if the matter should be remanded to the Assessing Officer for a fresh opportunity.
Sections Cited
144, 147, 144B, 142(1), 148, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the NFAC, New Delhi dated 12/06/2024 in DIN No. ITBA/NFAC/S/250/ 2024-25/1065605186(1) for the assessment year 2015-16.
Regarding the delay in filing the appeal by the assessee for 129 days, we note that the assessee has moved condonation petition supported by the affidavit stating that the email ID given to the revenue was created by the tax practitioner and the assessee did not have the relevant details of such email ID. Accordingly the notices issued by the authorities below were not responded. Nevertheless, the assessee approach to the tax practitioner in the month of December 2024 to enquire about the refund and at that point of time realized the status of the order of the learned CIT-A. As per the Ld. AR, the delay in filing the appeal has happened inadvertently and therefore the same should be condoned. The Ld. DR on the other hand did not raise any objection if the delay is condoned and the appeal is decided on merit as per law. In view of the above, we hold that there was sufficient and reasonable cause which prevented the assessee from filing the appeal within the stipulated time. Accordingly, we condone the delay and proceed to adjudicate the issue on merit of the case.
2.1 The facts of the case, in brief, are that the assessment was completed under sections 144 read with 147 and 144B of the Income- tax Act, 1961, on a best judgment basis. The Assessing Officer (AO) had issued statutory notices under sections 142(1), 148, and also a final show cause notice, but the assessee failed to respond on each occasion despite being provided with multiple opportunities. Consequently, the AO proceeded ex parte and completed the assessment based on information sourced from financial institutions and internal modules, namely AIMS and ITBA.
The AO observed that during the financial year 2014–15, the assessee had undertaken substantial transactions without furnishing any explanations or documents regarding the nature and source of such income. These transactions include unexplained cash deposits amounting to ₹28,10,000, unexplained time deposits of ₹16,00,000, interest income of ₹18,314, contract receipts totaling ₹2,60,500, and . commission/brokerage income of ₹2,31,168. Thus, a total addition of ₹49,19,982 was made to the assessee’s income.
Aggrieved, the assessee preferred an appeal before the learned CIT(A). However, the ld. CIT(A) also dismissed the appeal due to non- prosecution. The appellate authority recorded that despite issuance of three notices under section 250 between 2022 and 2024, and the opening of a communication window in November 2022 for online submissions, the assessee failed to make any representation or submission. Hence, the appeal was dismissed.
Being further aggrieved by the order of the ld. CIT-A, the assessee is now in appeal before us.
During the course of hearing, the learned Authorised Representative (AR) submitted that the non-compliance before the lower authorities was due to inadvertent omission and assured the Bench that the assessee is now willing to fully cooperate and comply with all notices. The learned AR requested that the matter may be set aside and restored to the file of the Assessing Officer so that the assessee may be given an opportunity to explain the nature and source of the credits and provide necessary documentation.
On the other hand, the learned Departmental Representative (DR), while supporting the orders of the AO and ld. CIT(A), fairly submitted that he has no objection if the matter is remanded to the file of the AO for proper adjudication, provided the assessee complies with the proceedings.
We have heard the rival submissions of both the parties and perused the material available on record. It is not in dispute that the assessment was framed ex parte due to the non-response of the assessee. Further, the appeal before the ld. CIT(A) was also dismissed for want of prosecution. However, now before us, the assessee has expressed willingness to cooperate and submit necessary documents. In our considered view, in the interest of natural justice, one more opportunity should be granted to the assessee to present his case. The principle of audi alteram partem demands that a person be given an effective opportunity to be heard before any adverse inference is drawn.
8.1 Accordingly, we deem it fit to set aside the orders of both the AO and the ld. CIT(A) and restore the matter to the file of the Assessing Officer. The AO is directed to provide adequate opportunity to the assessee to present his case, furnish the necessary documents, and substantiate the claims regarding the sources of income. The assessee is also directed to comply with the notices issued by the AO and not seek undue adjournments.
8.2 We make it clear that if the assessee again fails to cooperate or does not avail the opportunity granted, the AO shall be at liberty to proceed in accordance with law. 9. In the result, the appeal is allowed for statistical purposes. Order pronounced in court on 28th day of May, 2025 Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore, Dated, 28th May, 2025 .