ARUMUGAM RAVICHANDRAN,KARUR vs. ASSESSING OFFICER WARD 1 KARUR, KARUR

Brief facts of the case are that the assessee is an individual and proprietor of M/s.Arumugam Agro engaged in the business of selling fertilizers in Kulithalai and had not filed his return of income for the A.Y.2017-18. As per the information available with the department, the assessee had deposited Rs.11,71,500/- of cash in SBNs into his bank account during the demonetization period. To examine the genuineness of the sources of cash deposits made in SBNs statutory notices were issued to the assessee by the AO. However, the assessee did not respond for any of the notices from 09.03.2018 to 22.11.2019. Meanwhile, the AO collected the details of bank transactions from Canara Bank and found that the assessee had made total credits during the A.Y.2017-18 to the tune of Rs.77,23,360/- including SBNs of Rs.11,71,500/-. Since, the assessee had not responded to the statutory notices the AO concluded the best judgement assessment u/s.144 of the Act dated 11.12.2019 by making an addition of Rs.11,71,500/- u/s.69A of the Act along with 8% estimated business income on the balance amount of credits found in the bank account which works out to Rs.5,24,148/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC on 13.02.2020. 5. At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in Para 6 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 assessee’s appeal as deficient by confirming the order of the AO by passing an order dated 18.12.2024. 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 both before the AO as well as the ld.CIT(A). In view of the above, the ld.AR prayed for one more opportunity before the AO, since the exparte order has been passed by the AO u/s.144 of the Act. 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 exparte 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

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 to 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.

अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. धवभागीय प्रधतधनधि/DR 5. गार्ा फाईल/GF