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Facts
The assessee failed to file her income tax return for AY 2012-13 within the due date, eventually filing it belatedly. Information from the DDIT(Inv) revealed significant cash deposits, leading to the reopening of her case under Section 147 and issuance of notices under Section 148, to which she did not respond. The Assessing Officer completed the assessment ex-parte under Section 144, making substantial additions related to cash credits in various bank accounts.
Held
The CIT(A) dismissed the assessee's appeal due to her failure to submit any explanations or documentary evidence. However, the Tribunal observed that the assessee did not receive a proper opportunity to present her case before either the AO or the CIT(A), and thus remanded the entire matter back to the Assessing Officer for fresh adjudication, subject to the assessee cooperating and providing all necessary documents without seeking adjournments.
Key Issues
Whether the additions made by the Assessing Officer for cash deposits and credits were justified given the assessee's non-compliance, and whether the CIT(A) erred in dismissing the appeal without affording a proper opportunity of hearing.
Sections Cited
250, 1961, 147, 148, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 25.10.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1069948981(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2012-13.
The assessee has raised the following grounds of appeal:
1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The learned CIT[A] erred in disposing off the appeal without allowing proper and effective opportunity to the appellant in course of Hodike Hosahalli Venkate Gowda Sowmya, Maddur Page 2 of 5 the appellate proceedings under the facts and in the circumstances of the appellant's case.
3. Without prejudice to the above, the appellant denies herself liable to be assessed on a total income of Rs.27,77,674/- as against the returned income of Rs. 3,35,360/-, under the facts and in the circumstances of the case.
4. The learned CIT[A]/NFAC is not justified in sustaining ethe addition of Rs.26,86,630/- towards cash deposits and credits in the bank account of the appellant under the facts and in the circumstances of the appellant's case.
For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting he appeal and also order for the refund of the institution fees as part of the costs.
Brief facts of the case are that the assessee did not file her return of income for the Assessment year 2012-13 within the time limit as allowed under the Act. However she had filed her return of income belatedly on 26/03/2015 declaring Gross Total Income of Rs.3,42,620/- and claimed deduction under chapter VIA amounting to Rs. 7,258/- & thus declared Net Taxable Income of Rs.3,35,360/- As per the information received from the ld. DDIT(Inv), Mysuru vide letter dated 27/03/2019, the assessee had made cash deposits to the tune of Rs. 1,08,59,998/-. Thereafter the case was reopened u/s 147 of the Act & accordingly notices u/s 148 of the Act was issued. The assessee neither replied to any of notices nor replied to the show cause notice & accordingly the AO completed the assessment proceedings u/s 144 of the Act by making the following additions- i) Out of the total cash credits amounting to Rs.1,08,59,998/- in ICICI Bank Account, Rs.89,89,898/- was accepted by the AO to ii) Similarly, out of the total credits in Vijaya Bank amounting to Rs.12,59,432/-, the NEFT from T. Umesh amounting to Rs.1,57,100/- was treated as income of the assessee from other sources. Further the AO allowed the total cash deposits amounting to Rs.3,63,052/- towards receipt from sale of milk, tailoring & embroidery & ground rent. Accordingly the ground rent of Rs.70,000/- (1,00,000 – 30% of 1,00,000) treated as Income from House Property and the balance of Rs.2,63,052/- is treated as turnover of sale of milk, tailoring & embroidery and accordingly by applying the 8% of Rs.2,63,052/- the net profit from sale of milk, tailoring & embroidery is calculated amounting to Rs.21,044/- iii) As the assessee offers no explanations for the credit in Vijaya Bank through RTGS/NEFT from others amounting to Rs. 6,59,430/-, the AO treated the same as income of the assessee from other source. Accordingly, the AO completed the assessment on a total assessed Income of Rs.27,77,674/-.
Aggrieved by the assessment completed u/s 144 r.w.s. 147 of the Act, the assessee filed an appeal before the ld. CIT(A) /NFAC.
5. The ld. CIT(A)/NFAC dismissed the Appeal on the ground that the Assessee has not made a single submission/ explanation /documentary evidence to counter the findings of the AO and substantiate her stand. Further, the ld. CIT(A)/NFAC held that the fact of non-compliance on the part of the assessee clearly reveals that the assessee through her repetitive non compliances has shown complete lack of interest in pursuing the appeal and accordingly, in the absence of any reasonable, cogent and valid Hodike Hosahalli Venkate Gowda Sowmya, Maddur Page 4 of 5 evidences, advance by the assessee, the ld. CIT(A)/NFAC find no merits in the contentions raised & accordingly dismiss the appeal. .
Aggrieved by the order of the ld. CIT(A)/NFAC dated 25/10/2024, the assessee has filed the present appeal before this Tribunal.
Before us, the ld. AR of the assessee submitted that the ld. CIT(A)/NFAC has not provided proper & effective opportunity to the assessee. Further the ld. CIT(A)/NFAC has failed to decide the Grounds of appeal on merits and erred in upholding the order of AO and requested to provide one more opportunity of hearing before the AO to represent her case.
The Ld. DR on the other hand supported the order of the authorities below and submitted that the assessee has neither appeared before the AO nor before the CIT(A)/NFAC, which clearly demonstrate that the assessee is not interested in pursuing the Appeal. Further the ld. DR submitted that if the matter is remanded back to the AO that should be subject to the Cost to be impose on the assessee for her non-responsive behavior.
We have heard the rival submissions and perused the materials available on record. A perusal of the fact of the case shows that assessee could not represent her case before the ld. CIT(A)/NFAC at all as a result of which the ld. CIT(A)/NFAC has dismissed the appeal of the assessee by observing that in the absence of any plausible explanation and documentary evidences in support of the claims of the assessee, he did not find any merits in the contentions and accordingly dismissed the appeal of the assessee. On perusal of the order of AO, it is also found that the Hodike Hosahalli Venkate Gowda Sowmya, Maddur Page 5 of 5 assessee could not represent her case even before AO & the assessment order has been passed u/s 144 r.w.s 147 of the Act.
9.1 During the course of hearing, the ld. Counsel for the assessee requested that the assessee may be provided one more opportunity to represent her case before the ld. AO. In view of the above, considering the prayer of the ld. A.R. of the assessee, as well as in the interest of justice and fair play, we deem it fit to remit the entire issues involved in the present appeal to the file of AO for fresh adjudication in accordance with law after granting reasonable opportunity of being heard to the assessee. The assessee is also directed to produce all the necessary documents/evidences/information in support of her claim and shall not seek unnecessary adjournments. In case of further default on the part of the assessee, she will not be entitled for any leniency. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.