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Facts
The assessee, an individual, failed to file a return of income. Information regarding cash deposits of Rs. 62,38,500/- led the AO to issue notices under Section 148A(b) and later under Section 147/148 of the Act. The assessee did not respond to these notices, leading to an ex-parte assessment.
Held
The Tribunal noted the assessee's non-cooperation in both assessment and appellate proceedings. While an ex-parte order was passed by the CIT(A), the Tribunal decided to set aside the order and remit the matter back to the AO for de novo assessment after providing due opportunity.
Key Issues
Whether the ex-parte assessment and appellate orders are to be upheld when the assessee failed to participate, or if the matter should be remanded for proper opportunity.
Sections Cited
139(1), 148A(b), 147, 148, 144, 144B
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
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 2016-17, dated 12.02.2025.
The brief facts of the case are that the assessee is an individual had not filed return of income u/s.139(1) of the Act. As per the information of cash deposits to the tune of Rs.62,38,500/- by the assessee into his two bank accounts for the A.Y.2016-17, the AO had issued notice through the :-2-: ITA. No.:725/Chny/2025 registered email u/s.148A(b) of the Act on 28.02.2023 to the assessee. In response to the said notice u/s.148A(b), assessee did not file any reply. However, the AO was reopened the case u/s.147 of the Act and issued notice u/s.148 dated 27.03.2023 to the assessee. Further, the AO also issued various notices to the assessee to appear and furnish the details of cash deposit. However, the assessee failed to respond to all the notices and also did not file the return of income also. Since the assessee failed to participate in assessment proceedings, the assessment was concluded u/s.147 r.w.s.144 r.w.s.144B of the Act dated 24.02.2024, by adding an amount of cash deposit of Rs.62,38,500/- on account of unexplained cash deposits into his various bank accounts.
Aggrieved by the order of the AO assessee preferred an appeal before the ld.CIT(A),NFAC, Delhi. However, the assessee did not respond to any of the four notices issued by the ld.CIT(A) from 12.12.2024 to 30.01.2025. Hence, the ld.CIT(A) passed an exparte order dated 12.02.2025 by confirming the order of AO and dismissed the appeal of the assessee.
The Ld.AR for the assessee submitted that the assessee has failed to take note of hearing notices sent through e-mail, resulting in non-cooperation of assessee during the appellate proceedings as well as assessment proceedings. It was prayed in the interest of justice and equity, the issue may be restored to the files of the AO as a last opportunity for proper representation of his case.
:-3-: ITA. No.:725/Chny/2025
The Ld.DR submitted that adequate opportunities were provided from the offices of the AO and the ld.CIT(A) and there is no violation of principles of natural justice. Therefore, it was prayed the appeal of the assessee may be dismissed.
We have heard rival submissions and perused the materials on record. The Office of the First Appellate Authority had issued three hearing notices. It was the contention of the ld.AR that the assessee had failed to take note of hearing notices sent from the office of the ld.CIT(A). We note that the AO has also passed an exparte order by considering the information available with the department along with few information and documents submitted by the assessee and made an addition and the same has been upheld by the ld.CIT(A) - NFAC due to non-participation of the assessee in the first appellate proceedings. Since the assessee has failed to participate both before the AO as well as the appellate proceedings, we levy the cost of Rs.5,000/- (Rupees Five Thousand only) 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. Accordingly, in the interest of justice, we set aside the order of the 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 order in accordance to law, after providing
:-4-: ITA. No.:725/Chny/2025 reasonable opportunity to the assessee. Needless to say, 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 open court on 12th June, 2025 at Chennai.