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Facts
The assessee, engaged in poultry raw material business, deposited Rs. 52.26 lakhs in Specified Bank Notes (SBNs) during demonetization. Due to non-participation in assessment proceedings, the AO made an ex-parte addition under Section 69A read with Section 115BBE, and the CIT(A) dismissed the subsequent appeal for similar non-participation.
Held
The Tribunal condoned a 344-day delay in filing the appeal due to the tax practitioner's oversight and a new CA discovering the order. Relying on the Tin Box Company case, the Tribunal set aside the CIT(A)'s order and remitted the matter to the AO for a de novo assessment, providing the assessee a fresh opportunity. A cost of Rs. 10,000 was also levied on the assessee for past negligence.
Key Issues
Whether the delay in filing the appeal should be condoned; whether the ex-parte assessment and subsequent dismissal of appeal for non-participation by lower authorities was justified; and the scope for remitting the matter for a fresh assessment with due opportunity to the assessee.
Sections Cited
69A, 115BBE, 144, Chapter VI-A
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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 filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi dated 27.01.2024 and pertains to assessment year 2017-18.
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 Mr.Marimuthu, Tax Practitioner, Namakkal failed to give proper professional guidance to the assessee. The assessee
:-2-: ITA. No:720/Chny/2025 became aware of the appellate order dated 27.01.2024 passed by the CIT(Appeals), NFAC only after verified the portal by the new Chartered Accountant in the first week of March 2025 and the appeal was filed immediately on 10.03.2025. 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 interest of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication.
The brief facts of the case are that the assessee was an individual running a whole business of poultry raw materials and had filed return of income for the A. Y. 2017-18 on 31.03.2018 admitting an income of Rs.5,43,280/- after availing deductions under Chapter VI-A. The case was selected for scrutiny under CASS for verifying the abnormal cash deposit during demonetization period and statutory notices were issued to the assessee. During the A.Y.2017- 18 the assessee deposited SBNs to the tune of Rs.52,26,000/- in his bank accounts maintained with State Bank of India, Namakkal Branch and Lakshmi Vilas Bank Ltd, Namakkal during the demonetization period. The assessee did not participate in assessment proceedings and hence the AO made an addition of Rs.52,26,000/- as unexplained money u/s.69A r.w.s.115BBE of the Act, based on the material evidence available on records and passed an order u/s.144 of the Act on 28.12.2019.
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC.
:-3-: ITA. No:720/Chny/2025 5. At the outset, we observed that ld.CIT(A) has provided five opportunities for the assessee to appear for hearings as detailed in paragraph 3 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 was dismissed the assessee’s appeal as deficient by confirming the order of the AO dated 27.01.2024. 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 from 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, Delhi 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 Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
:-4-: ITA. No:720/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 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, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 22nd July, 2025 at Chennai.