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Facts
The assessee, an individual, failed to file his return of income for AY 2015-16. Time deposits and cash deposits indicated escaped income, leading to a re-opened assessment. The assessee did not participate in assessment or appellate proceedings.
Held
The Tribunal noted the assessee's failure to participate in proceedings before the AO and CIT(A). While setting aside the CIT(A) order, the matter was remitted back to the AO for a de novo assessment.
Key Issues
Whether the CIT(A) order was justified in dismissing the appeal due to non-participation, and whether the matter should be remanded for a fresh assessment.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER S.R.RAGHUNATHA, AM:
This appeal of the assessee is filed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short “ld.CIT(A)”) for the assessment year (A.Y.) 2015-16, vide order dated 26.06.2025.
Brief facts of the case are that the assessee is an individual and had not filed his return of income for AY 2015-16. As per the information available with the :-2-: ITA 2392/Chny/2025 department, the assessee had made Time Deposits of Rs.35,00,000/- and cash deposits of Rs.27,04,000/- for the assessment year 2015-16 and thus income chargeable to tax has escaped assessment. The assessee had failed to declare these transactions, the notice u/s.148 was issued and the case has been re-opened u/s.147 of the Act. Since the assessee did not participate in the assessment proceedings by not responding to the statutory notices, the AO issued show cause notice to the assessee on 01.03.2024. In response to the SCN, the assessee submitted the documents and filed his return of income on 05.03.2024 for the A.Y.2015-16 declaring a total income of Rs.41,090/- and Gross Agricultural receipt of Rs.4,00,000/-. On perusal of the documents submitted by the assessee, the AO made an addition of Rs.18,00,000/- as unexplained money for non-furnishing of Capital Gain details and concluded the assessment proceedings u/s.143(3) r.w.s 147 of the Act dated 28.03.2024.
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC on 23.04.2024.
At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 5 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), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order dated 26.06.2025.
:-3-: ITA 2392/Chny/2025
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 appear before the ld.CIT(A). The ld.AR submitted that the ld.CIT(A) failed to consider the Capital Gains from the sale of the land arose only in the assessment year 2016-17, since the sale deed was registered on 25.04.2015, and therefore, the gains could not be taxed in subject assessment year.
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 AO to complete the assessment 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 information available with the department and the same has been dismissed by the ld.CIT(A) - NFAC due to non-participation of the assessee before the first appellate authority. Since, the assessee has failed to participate before the appellate authority, we levy the cost of Rs.2,000/- 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.
:-4-: ITA 2392/Chny/2025
In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the 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 court on 19th November, 2025 at Chennai.