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Facts
The assessee, Liverpool Fashions Limited, failed to file its return of income for AY 2017-18. The AO made an addition of Rs. 2,19,50,000/- on account of unexplained cash deposits and credits in its bank account. The CIT(A) upheld this addition, passing an ex-parte order.
Held
The Tribunal noted the delay in filing the appeal by the assessee and their lack of cooperation with the lower authorities. However, considering the interest of justice and the documents filed, the Tribunal imposed a cost of Rs. 10,000/- on the assessee and remanded the case back to the AO for a fresh assessment.
Key Issues
Whether the ex-parte assessment order and the CIT(A)'s order upholding the addition are valid, given the assessee's failure to appear and the alleged lack of proper communication.
Sections Cited
144, 69A, 115BBE, 250
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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
आदेश/ORDER PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER
This appeal is filed by the Assessee as against the appellate order dated 28-11-2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the ex parte assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18.
The grounds of appeal raised by the assessee are as under:
“1.1 The order U/s.250 passed on 28-11-2023 by NFACICIT(A)). Delhi (for short "CIT(A)") upholding the addition aggregating to Rs.2,19,50,000/- consisting of cash deposits of Rs. 39,40,000/- and credits of Rs. 1,80,10,000/- in bank account with Central Bank of India as unexplained deposit u/s 69A rws 115BBE is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. CIT(A), has grievously erred in law and or on facts in not appreciating that there was no valid communication of the notices of hearing so that the same could not be responded by the appellant. The CIT(A) ought to have appreciated that there was a sufficient cause for failure to comply with the notices claimed to be issued by NFAC. 3.1 The ld. CIT(A) has grievously erred in law and or on facts in upholding the addition aggregating to Rs.2,19,50,000/- consisting of cash deposits of Rs. 39,40,000/- and credits of Rs. 1,80,10,000/- in bank account with Central Bank of India as unexplained deposit u/s 69A rws 115BBE. 3.2 That the in the facts and circumstances of the Id. CIT(A), ought not to have upheld the addition aggregating to Rs.2,19,50,000/- consisting cash deposits Rs.39,40,000/- and credits of Rs. 1,80,10,000/- in bank of account with Central Bank of India as unexplained deposit u/s 69A rws 115BBE.”
The Registry has noted that there is a delay of 422 days in filing the appeal by the assessee. The assessee filed a notarized affidavit explaining that change in management, the assessee could not represent both before the AO as well as the CIT(A), which has resulted in a delay of 422 days in filing the above appeal. Ld. Counsel for the assessee filed before us a paper book running to 73 pages, wherein confirmation from the creditors, bank statements, ITRs filed by the assessee, thereby requested to give one more opportunity of hearing to the assesse to explain its case.
Ld. CIT.DR appearing for the Revenue submitted that the asessee neither co-operated before the AO nor filed evidences before the Ld.CIT(A). Therefore, the present appeal is liable to be dismissed.
We have given our thoughtful consideration and perused the materials available on record. The assessee has not filed the return of income for A.Y. 2017-18. Whereas, in its bank account with Central Bank of India, the assessee made cash deposit of Rs.39,40,000/-and total credits in the account of Rs.2,19,50,000/-. Since, the assessee failed to explain the cash deposit and credit entries appearing in the bank account, the AO made total addition of Rs.2,19,50,000/- as unexplained money u/s.69A of the Act and assessed to tax u/s.115BBE of the Act @ 60%.
Aggrieved against the same, the assessee filed appeal before the Ld.CIT(A). However, in spite of four opportunities, the assessee failed to response to the notices which are resulted in passing ex parte appellate order. However, the assessee filed relevant documents before us. Therefore, to meet the interest of justice, we need it fit to impose a cost of Rs.10,000/- payable by the assessee to the Income Tax Department for its non-cooperation before the lower authorities, within two weeks of receipt of copy of this order. On production of the receipt of the cost payment, the Ld. Jurisdictional AO (‘JAO’) is directed to give one more opportunity of hearing to the assessee and pass order on merits of the case. Needless to say, the assessee should cooperate by filing all required details and evidences before the JAO to pass a fresh assessment order.
In the result, the appeal filed by the assessee is allowed for statistical purposes.