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Facts
The assessee, an agricultural cooperative credit society, did not file its ITR for AY 2018-19. Its case was reopened under Section 147 based on cash deposits and withdrawals, leading to an ex-parte assessment under Section 144 by the AO who added Rs.5,22,79,391/- as unexplained money. The Ld.CIT(A) also dismissed the assessee's appeal ex-parte due to non-participation.
Held
The Tribunal condoned the significant delay in filing the appeal to the ITAT due to the assessee's lack of digital literacy. It set aside the Ld.CIT(A)'s order and remitted the matter back to the Assessing Officer for a de novo assessment, emphasizing the need to provide reasonable opportunity to the assessee. The assessee was directed to pay costs of Rs.10,000/- for non-participation before the lower authorities.
Key Issues
Whether the delay in filing the appeal to the Tribunal should be condoned; and whether an ex-parte assessment and appeal dismissal without providing adequate opportunity to the assessee is valid, especially considering the principles of natural justice.
Sections Cited
147, 144, 69A, 115BBE
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2018-19, vide order dated 16.01.2024.
At the outset, we find that there is a delay of 344 days in 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 outcome of the appeal before the ld.CIT(A) due to lack of digital literacy, infrequent Email usage and absence of physical communication which led to the delayed knowledge of the order passed.
:-2-: ITA. No:716/Chny/2025 Further, the members of the assessee society are agriculturists residing in remote village with limited access to infrastructure and not accustomed to latest technological advancement like e-assessment and e-filing systems. 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 appeal and admit the appeal filed by the assessee for adjudication.
Brief facts are that the assessee is a primary agricultural cooperative credit society engaged in the business of supplying fertilizers and other agricultural implements along with the credit facilities to its members. The assessee had not filed the return of income for the A.Y.2018-19. The case of the assessee’s was re-opened u/s.147 of the Act based on the data of cash deposit of Rs.59,24,391/- in bank account maintained with Cuddalore District Central cooperative Bank and cash withdrawal of Rs.4,63,55,000/- from the same bank account. Accordingly, the statutory notices were issued to the assessee. However, assessee had not responded for any of the notices. Therefore, show-cause notices dated 03.02.2023 and 16.02.2023 were issued upon the assessee. However, as the assessee failed to comply to the aforesaid notices issued from time to time the AO concluded the assessment by passing an exparte order u/s.144 of the Act by adding the amount of Rs.5,22,79,391/- of both cash deposit and withdrawals made during the A.Y. 2018-19 to the total income for the year under consideration u/s.69A r.w.s.115BBE of the Act as unexplained money.
Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT (A), NFAC, Delhi.
:-3-: ITA. No:716/Chny/2025
Before the ld.CIT(A) also, the assessee has neither filed written submissions nor filed any documentary evidence in support of his claim, in spite 4 opportunities provided by the ld.CIT(A) as per para 4 of its order from 01.08.2023 to 10.01.2024. Therefore, the ld.CIT(A) dismissed the appeal by confirming the order of the Assessing Officer. Aggrieved by the order of ld.CIT(A), the assessee has filed an appeal before us.
The ld.AR submitted that the assessee has not received notices issued by the ld.CIT(A). Hence, the appeal was not prosecuted before the ld.CIT(A) even the assessment order was passed exparte u/s. 144 of the Act by the Assessing Officer. Therefore, ld.AR prayed for one more opportunity may be provided to the assessee to represent his case before the Assessing Officer 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 AO, 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 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. Since, the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of :-4-: ITA. No:716/Chny/2025 Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
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 Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct 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. Order pronounced in the court on 23rd July, 2025 at Chennai.