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Facts
The assessee, an individual, did not file her Income Tax Return for A.Y. 2017-18. Following information of cash deposits during demonetization, the AO completed an ex-parte assessment under Section 144, making additions for unexplained money under Section 69A and business income. The Ld. CIT(A) also dismissed the assessee's appeal ex-parte due to non-participation, confirming the AO's order.
Held
The Tribunal condoned the 307-day delay in filing the appeal, finding reasonable cause. It set aside the Ld. CIT(A)'s order and remitted the matter back to the AO for a de-novo assessment, directing the AO to provide a fresh opportunity to the assessee. The Tribunal also imposed a cost of Rs. 15,000/- on the assessee for non-participation in earlier proceedings.
Key Issues
Whether there was a reasonable cause for the delay in filing the appeal; whether the ex-parte assessment and appellate orders violated principles of natural justice due to lack of opportunity to the assessee.
Sections Cited
142(1), 144, 69A
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
अपीलाथ� की ओर से/Appellant by : Mr. N. V. Krishnan, Advocate ��थ� की ओर से/Respondent by : Ms. Pryati Sharma, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 03.06.2025 घोषणा की तारीख/Date of Pronouncement : 11.06.2025 आदेश /O R D E R 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 2017-18, dated 19.02.2024.
At the outset, we find that there is a delay of 307 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was not aware about the completion of proceedings before the ld. CIT(A) since all notices were sent to her consultant email ID which were not brought to her notice. Further due to :-2-: ITA. No.:670/Chny/2025 her health issue of assessee’s brother related to cardiac issues she could not coordinate with her consultant. 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 interests 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 is an individual had not filed the return of income for the A.Y. 2017-18. As per the information of cash deposits to the tune of Rs.11,10,500/- during demonetization period i.e. 09.11.2016 to 30.12.2016 by the assessee into his bank account, the AO issued notice u/s.142(1) of the Act on 09.03.2018 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.144 of the Act dated 22.10.2019, by adding an amount of cash deposit of Rs.11,10,500/- on account of unexplained money u/s.69A of the Act along with 8% of Rs.1,40,345/- on other credits in the bank of Rs.17,54,323/- as business income.
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 :-3-: ITA. No.:670/Chny/2025 the five notices issued by the ld.CIT(A) from 08.01.2021 to 05.02.2024. Hence, the ld.CIT(A) passed an exparte order dated 19.02.2024 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 both the assessment as well as appellate 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.
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 five 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 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.15,000/- (Rupees Fifteen Thousand only) to be paid to State Legal Aid Authority, Hon’ble High
:-4-: ITA. No.:670/Chny/2025 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 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 11th June, 2025 at Chennai.