KUMARESAN MUTHUKRISHNAN,CHENNAI vs. ITO, INTERNATIONAL TAXATION WARD-1(2), MADURAI

Brief facts of the case are that the assessee is an individual, non-resident and has filed his return of income for A.Y.2019-20 on 30.12.2020, declaring total income of Rs.8,51,930/-. The case was selected for scrutiny under CASS and the AO issued notice u/s.143(2) r.w.s 143(3A) and 143(3B) on dated 29.06.2021 to the assessee. Further, the AO issued notices u/s.142(1) of the Act and SCN to the assessee and called for details. In response to the notice, the assessee submitted his reply along with details of cash deposit. On perusal of the details submitted by the assessee, the AO found that the assessee made cash deposits to the tune of Rs.11,26,000/- into his joint bank account maintained with ICICI Bank on various dates from 18.06.2019 to 20.032020 during the assessment year. Further, the AO observed the assessee stated that the amount of Rs.11,24,000/- was gifted by the father-in-law of the assessee and his wife during the F.Y 2018-19 and 2019-20 and the assessee has not furnished any data in support of the said claim. The AO was not convinced of the reply submitted by the assessee and made an addition of Rs.11,26,000/- treated as unexplained cash credits u/s.68 of the Act by arriving a total income of Rs.19,77,929/- and concluded the assessment proceedings by passing an order u/s.143(3) r.w.s 144C(3) of the Act dated 20.05.2022. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), Chennai-16 on 07.09.2022. 5. At the outset, we observed that ld.CIT(A) has provided three opportunities for the assessee to appear for hearings as detailed in paragraph 3.2 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A) passed an order dated 27.09.2023 by confirming the order of the Assessing Officer.

The ld.AR submitted that the assessee is a Non-resident Indian who resides permanently in Canada and he was not regularly monitor the appeal proceedings because the appeal was handled by the consultant of the assessee and became aware after consultation of another consultant. Hence, the appeal was not prosecuted before the ld.CIT(A). Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the ld.CIT(A) in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the ld.CIT(A), in case one more opportunity is provided.

Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an order without supporting documents and the same has been dismissed by the ld.CIT(A), Chennai-16 due to the assessee failing to furnish any data in support of his claim, except for stating that Rs.11,24,000/- was gifted by his father-in-law. We note that the AO has passed an order by making an addition of Rs.11,24,000/- and arrived the total income of Rs.19,77,929/-. The said addition has been questioned before the ld.CIT(A) and the same has been upheld by the ld.CIT(A), Chennai-16 due to non-participation of the assessee before the first appellate authority. Since the assessee failed to participate before the first appellate authority, we levy the cost of Rs.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

In the result, appeal filed by the assessee is allowed for statistical purposes.