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Facts
The assessee filed an appeal with a delay of 628 days. The appeal related to an assessment for AY 2017-18 where the Assessing Officer treated cash deposits of ₹.69,36,000/- as unaccounted income under Section 68 of the Act. The CIT(A) dismissed the appeal ex-parte due to non-compliance.
Held
The Tribunal condoned the delay and admitted the appeal. It held that the CIT(A) should have decided the grounds of appeal on merits and remanded the matter back to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without deciding on merits, and if the assessee should be given another opportunity to present their case.
Sections Cited
143(3), 142(1), 68
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Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 14.03.2023 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.
We find that this appeal is filed with a delay of 628 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer by passing exparte order in the facts and circumstances of the case.
Brief facts of the case are that the assessee file return of income for AY 2017-18 admitting total income of ₹.17,51,030/- and the case was selected for complete scrutiny under CASS. Note under section 143(2) of the Income Tax Act, 1961 [“Act” in short] dated 30.08.2018 and notices under section 142(1) of the Act dated 03.12.2019 & 16.12.2019 were served on the assessee. In response to the notices, the assessee furnished the details as called for. According to the Assessing Officer, the assessee made cash deposits of ₹.69,36,000/- during demonetization period in his bank account maintained with the City Union Bank in the form of Specified Bank Notes (SBN) after 08.11.2016 till December, 2016. After considering the submissions of the assessee, the Assessing Officer treated the entire cash deposits of ₹.69,36,000/- as unaccounted income under section 68 of the Act and added to the total income of the assessee by observing that since the assessee received the cash in the form of SBN from customers after 08.11.2016 has no legal traction since the SBN are not legal tender in those transactions. 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.
The ld. AR Shri T. Vasudevan, 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. He submits that the ld. CIT(A) ought to have decided the grounds of appeal on merits since the assessee deposited the cash balance available in the books of accounts as on 08.11.2016 in the bank in the months of November and December, 2016 as the bank did not accept the entire cash balance at one stroke. Thus, the ld. AR prayed that, one more opportunity may be afforded to the assessee to pursue her case before the ld. CIT(A).
The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to page 5 & 6 of the impugned order and argued that the ld. CIT(A) afforded sufficient opportunities to the assessee, but, it was not availed. She vehemently argued that costs may be imposed, in case this 4 Tribunal affords an opportunity by remanding the matter to the file of the ld. CIT(A).
Heard both the parties and perused the material on record. We note that the assessment was completed under section 143(3) of the Act dated 26.12.2019 and the assessee has filed the details in response to the statutory notices issued by the Assessing Officer. In this case, the assessee is involved in gold and silver jewellery trade and the transactions with the customers are in cash. The assessee has contended that the observations of the Assessing Officer in the assessment order that the assessee received SBN from the customers after 08.11.2016 is not factually correct. When all the details furnished by the assessee are available, the ld. CIT(A) ought to have called for assessment records, verified the details and decided the issue on merits, which was not done in this case. Taking into consideration of the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to afford one more opportunity and remand the matter to the file of the ld. CIT(A) subject to the condition of payment of ₹.2,000/- 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 ld. CIT(A) shall satisfy the payment of cost and decide the issue afresh on merits in 5 accordance with law. The assessee has liberty to file the written submissions/documentary evidences, if any, before the ld. CIT(A) to substantiate his claim. Thus, the grounds raised by the assessee are allowed for statistical purposes.