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Facts
The assessee, a textile firm, had its assessment for AY 2012-13 reopened under Section 147, leading to an addition of Rs. 85,04,821/- as unexplained income. The ld. CIT(A) confirmed the addition ex-parte due to the assessee's non-response to notices, and the assessee subsequently filed an appeal with a delay of 199 days before the ITAT.
Held
The Tribunal condoned the delay in filing the appeal and, noting the assessee's negligence in participating before the ld. CIT(A), set aside the ld. CIT(A)'s order. The case was remitted back to the ld. CIT(A) for fresh adjudication, providing another opportunity to the assessee, subject to payment of Rs. 5,000/- as cost.
Key Issues
The key issue was whether the ld. CIT(A) was justified in passing an ex-parte order and confirming the addition when the assessee sought another opportunity to present its case.
Sections Cited
143(3), 147, 148
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER S.R.RAGHUNATHA, AM :
This appeal by the assessee is arising out of the order dated 18.12.2024, passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2012-13 against the order u/s.143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO dated 29.11.2019.
At the outset, we find that there is a delay of 199 days before us in the appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was unaware of the order of the ld.CIT(A) uploaded in the Income-Tax e-filing portal. Further, the notices and order were sent to the email ID ‘vaishalivishals@gmail.com’ instead of correct email ID of ‘groupstat23@gmail.com’ and the assessee became aware of the impugned order only on visiting CA office for statutory audit of books of accounts of FY 2024-25. Hence, there was a delay in filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit the appeals filed by the assessee for adjudication.
Brief facts of the case are that the assessee is a firm engaged in the business of trading of textiles and has filed its return of income on 29.09.2012 for AY 2012- 13, declaring total income of Rs.43,260/-. On verification of the report received from the Department, the Assessing Officer found that the partners of the assessee firm made huge round-term transactions, unusual single or aggregate transfers in a single/multiple days with no rationale or Bonafide purpose to their partners and third parties. However, the total income declared by the assessee firm was not commensurate with the huge transactions made by the assessee firm and the assessee firm had understated its income for the A.Y.2012-13, which was bring to tax the income chargeable to tax which has escaped assessment for the A.Y.2012- 13, the case was re-opened u/s.147 of the Act. The Assessing Officer issued notice u/s.148 of the Act on 31.03.2019. In response to the notice, the assessee firm filed its return of income on 27.04.2019. Further, the Assessing Officer issued statutory notices to the assessee to furnish details. In response to the notice, the assessee firm filed certain details without the supporting documents. On perusal of the documents submitted by the assessee, the Assessing Officer was found that amount of partners capital increased to the tune of Rs.85,04,821/- and making an addition of Rs.85,04,821/- treated as unexplained income and completed the assessment u/s.143(3) r.w.s 147 of the Act dated 29.11.2019.
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 14.01.2020. However, the assessee did not respond to any of the five notices issued by the ld.CIT(A) from 26.02.2021 to 22.11.2024 as shown in the para 5 of the order. Hence, the ld.CIT(A) passed an exparte order dated 18.12.2024 by confirming the order of the AO and dismissed the appeal of the assessee.
The ld.AR submitted that the assessee had not regularly checked the income tax portal and his email and hence he was not aware of the notices issued by the ld.CIT(A) and hence he could not submit the complete documentary evidence before the ld.CIT(A). In view of the above, the ld.AR prayed that the Hon’ble Tribunal may be pleased to set aside the order of CIT(A) and remit the issues to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the first appellant authority completed the appellate proceedings effectively.
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 AO has passed an order by considering the submissions made by the assessee along with the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC due to lack of documentary evidence before the first appellate authority. Since the assessee has failed to participate before the appellate authority and also delay in filing the appeal before us, we levy the cost of Rs.5,000/- 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.
Order pronounced in the open court on 01st December, 2025 at Chennai.