Loading judgment…
Facts
The assessee, an individual, derived interest income. The Assessing Officer initiated reassessment proceedings under Section 147 after the assessee failed to file a return initially. The assessee later filed a return, but did not respond to notices or provide explanations for large bank credits and business expenses claimed. The Assessing Officer made additions for unexplained money and disallowed business expenses.
Held
The Tribunal noted the assessee's failure to cooperate and provide evidence, leading to ex-parte assessment orders. However, considering the assessee's undertaking to cooperate and in the interest of justice, the Tribunal remanded the matters to the Assessing Officer for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without granting further opportunity, and if a fresh opportunity should be granted to the assessee to present evidence, subject to cost.
Sections Cited
139, 148, 148A(d), 142(1), 144, 133(6), 69A, 147, 144B
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate orders dated 17.03.2025 and 19.03.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment years 2013-14 and 2015-16 respectively.
Since issues raised in both the appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience.
The assessee raised 10 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in dismissing the appeal in the given facts and circumstances of the case.
Brief facts emanating from record are that the assessee is an individual and derived income from other sources i.e., interest income during the year under consideration. According to the Assessing Officer, the assessee did not file return of income under section 139 of the Income Tax Act, 1961 [“Act” in short]. Accordingly, the Assessing Officer issued notice under section 148 of the Act. In response to the notice, the assessee filed his return of income on 20.08.2021 declaring total income of ₹.2,09,770/-. After following due procedure, the Jurisdictional Assessing Officer passed order under section 148A(d) of the Act dated 29.06.2022 and issued notice under section 148 of the Act on 29.06.2022, against which, the assessee did not file return of income.
Thereafter, the Assessing Officer issued various notices under section 142(1) of the Act, show-cause notice under section 144 of the Act, Central communication letter by NaFAC dated 10.04.2023 and show- cause notice under section 144 of the Act dated 20.04.2023. However, the assessee did not file any response to the above notices. After obtaining bank statement under section 133(6) of the Act, the Assessing Officer noted total credit at ₹.5,56,88,255/- in his ICICI bank account from various entities. Since the assessee could not explain with documentary evidences, the Assessing Officer treated the same as unexplained money under section 69A of the Act and added to the total income of the assessee. Further, on verification of the ITR filed by the assessee on 20.08.2021, the Assessing Officer noted that the assessee has not carried out any business activities, but, the assessee has shown total income of ₹.4,16,100/- in credit side of his P & L account as interest received and claimed total business expenses of ₹.1,56,868/- in debit side of P & L account. Since the assessee has not carried out any business activities, the Assessing Officer treated the same as income from other sources, added to the total income of the assessee as well as disallowed the claim of business expenses of ₹.1,56,868/- and added to the total income and completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 05.05.2023. On appeal, the ld. CIT(A) dismissed the appeal of the assessee since the assessee did not comply with the hearing notices or filed any documentary evidences in support of grounds of appeal.
4. The ld. AR Shri Hitesh, Advocate submits that non-compliance to the hearing notices issued by the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond assessee’s control. The ld. AR brought on record an affidavit, wherein, the assessee undertakes to provide full and utmost cooperation before the Assessing Officer and prayed that, one more opportunity may be afforded to the assessee to substantiate his claim before the Assessing Officer.
The ld. DR Ms. E. Pavuna Sundari, CIT objected the same and submits that if at all this Tribunal intends to afford one more opportunity to the assessee, that should be by way of cost as the assessee totally failed to prosecute its case before the Assessing Officer and the ld. CIT(A) inspite of ample opportunities afforded to the assessee.
Having considered the submissions of the ld. AR and ld. DR, we note that the Assessing Officer completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act by making various additions in the absence of explanation with documentary evidences. We find that there is no assistance from the assessee before the Assessing Officer and the ld. CIT(A). As there is no assistance from the assessee, taking into account the undertaking given by the assessee that the assessee is ready to appear and prosecute its case, in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer subject to the condition of payment of ₹.25,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the Assessing Officer shall satisfy the payment of cost and decide the issue afresh after considering the written submissions / documentary evidences as may be filed by the assessee to substantiate its claim. In any case, the assessee fails to appear before the assessing authority, it is open to the Assessing Officer to complete the assessment based on the material available on record and to pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
FY 2015-16 7. We note that the Assessing Officer completed the assessment for AY 2015-16 under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 25.05.2023 by making various additions in the absence of explanation with documentary evidences. We find that there is no assistance from the assessee before the Assessing Officer and the ld. CIT(A). As there is no assistance from the assessee, considering the undertaking given by the assessee that the assessee is ready to appear and prosecute its case, in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer subject to the condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the Assessing Officer shall satisfy the payment of cost and decide the issue afresh after considering the written submissions / documentary evidences as may be filed by the assessee to substantiate its claim. In any case, the assessee fails to appear before the assessing authority, it is open to the Assessing Officer to complete the assessment based on the material available on record and to pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 17th July, 2025 at Chennai.