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Facts
The assessee's appeal is against an order of the CIT(A) for AY 2017-18. The appeal was filed with a delay of 415 days, which was condoned. The Assessing Officer made additions on account of cash deposits during demonetization and difference in property purchase value, treating them as unexplained investment and income.
Held
The Tribunal noted that the CIT(A) dismissed the appeal without deciding on merits due to non-compliance with hearing notices. The Tribunal, considering the interest of justice, decided to remand the matter back to the CIT(A) to decide the issues afresh on merits.
Key Issues
Whether the CIT(A) was justified in confirming additions made by the AO without deciding on merits, and whether the assessee should be granted another opportunity to present their case.
Sections Cited
143(2), 142(1), 69, 56(2)[(vii)(b)(ii)], 143(3), 44AB, 50C, 55A
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
Year: 2017-18 Antony Sunil, Vs. The Income Tax Officer, No. 59, 11th Trust Cross Street, Non Corporate Ward 1(7), Mandavelipakkam, Chennai 600 028. Chennai 600 034. [PAN:BXBPS7987P] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Anandd Babunath, F.C.A. ��थ� की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 04.06.2025 घोषणा की तारीख /Date of Pronouncement : 30.06.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 23.11.2023 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 415 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 8 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the additions made by the Assessing Officer by passing exparte order without considering the issues on merits 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 ₹.5,50,830/- 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 27.09.2018 and notices under section 142(1) of the Act dated 23.01.2019 & 23.10.2019 were issued on the assessee calling for details. In response to the notices, the assessee furnished the details as called for. According to the Assessing Officer, the assessee made cash deposits of ₹.9,84,500/- in IDBI Bank account and ₹.23,82,500/- in South Indian Bank Ltd. during demonetization period in the form of Specified Bank Notes (SBN). Before the Assessing Officer, the assessee has submitted that the source for cash deposits from sale of livestock and stated that local vendor usually make payments of their daily cash collection, which are separately kept in accumulated form for payments to their suppliers and such payments are collected by the assessee and deposited into his bank and transferred to poultry owners. After considering the submissions of the assessee, the Assessing Officer treated the entire cash deposits of ₹.33,67,000/- [9,84,500 + 23,82,500] as unexplained investment under section 69 of the Act and added to the total income of the assessee. Further, according to the Assessing Officer, the market value of the property purchased by the assessee is ₹.60,00,000/-, whereas, the assessee made payment of ₹.49,00,000/- as per document executed on 15.03.2017. When the Assessing Officer asked the assessee to furnish explanation, the assessee could not explain the difference amount between stamp duty value and purchase consideration of ₹.11,00,000/-. Thus, the Assessing Officer brought to tax the said difference of ₹.11,00,000/- under section 56(2)[(vii)(b)(ii)] of the Act and completed the assessment under section 143(3) of the Act dated 20.12.2019. 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 Anandd Babunath, F.C.A. 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. With regard to the cash deposits, the ld. AR argued that assessee’s account was duly audited under section 44AB of the Act and the books of account were never rejected nor the sales were disputed and the Assessing Officer ought not to have made addition under section 69 of the Act. Further, he submits that the Assessing Officer ought not to have applied the provisions of section 50C of the Act on the property bought by the assessee had his spouse, wherein, the guideline value was exorbitantly higher that the actual market value without seeking for the valuation report of the DVO under section 55A of the Act. He further argued that the Government of Tamil Nadu reduced the guideline value with effect from 08.06.2017 by 33% in respect of the properties across the State, wherein, the land purchased by the assessee has been revised from the assessed value as per the Stamp Valuation Authority, which was ignored by the Assessing Officer while completing the assessment. He further submits that the ld. CIT(A) ought to have decided the grounds of appeal on merits by calling assessment records. Thus, the ld. AR prayed that, one more opportunity may be afforded to the assessee to pursue his case before the ld. CIT(A).
The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 5 of page 4 & 5 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 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 20.12.2019 and the assessee has filed the details in response to the statutory notices issued by the Assessing Officer. We have considered the issue-wise submissions of the ld. AR and also noted that the impugned order was not passed on merits by calling assessment records. Taking into consideration of the submissions of the ld. AR, 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 ₹.10,000/- 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 issues afresh on merits in 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th June, 2025 at Chennai.