DURAIRAJAN ANUSUYADEVI,KARUR vs. ITO, WARD-1,, KARUR

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ITA 228/CHNY/2025Status: DisposedITAT Chennai05 May 2025AY 2019-20Bench: SHRI ABY T. VARKEY (Judicial Member), SHRI JAGADISH (Accountant Member)1 pages
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What did the Tribunal hold?

The tribunal noted that both the AO and the Ld. CIT(A) passed ex parte orders without going into the merits. Given the circumstances, the tribunal restored the matter to the AO for a de novo assessment. The assessee was directed to file submissions and documents, and a cost of Rs.10,000/- was imposed.

What were the facts?

The assessee failed to file a return of income for AY 2019-20. The AO received information about cash deposits in the assessee's bank account. After issuing notices which allegedly went into the SPAM folder, the AO made an ex parte addition under Section 69A of the Act. The Ld. CIT(A) also dismissed the assessee's appeal ex parte.

What were the issues?

Whether the ex parte orders passed by the AO and CIT(A) are justified without considering the assessee's explanation regarding non-receipt of notices, and whether the assessment should be remanded for a fresh de novo assessment.

Which sections of the Income-tax Act were involved?

Section 148,Section 69A,Section 250

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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI JAGADISH

Hearing: 19.03.2025Pronounced: 05.05.2025

आदेश / O R D E R

PER ABY T. VARKEY, JM:

1.

This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 06.11.2024 for the Assessment Year (hereinafter referred to as "AY”) 2019-20.

2.

The assessee is noted to have been aggrieved by the action of the Ld.CIT(A) passing ex parte order qua assessee without going into the merits of the case.

3.

The brief facts are that the assessee didn’t file return of income (RoI) for AY 2019-20. The AO received information that in assessee’s bank account, there was cash deposits to the tune of Rs.2,44,27,001/-.

1. Therefore, the AO issued notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) to re-open the assessment; and simultaneously, the AO issued notices to several banks and found out that the assessee has deposited total cash to the tune of Rs.4,45,15,229/- in her bank accounts. The AO issued notices to the assessee ‘as to why’ the cash deposits totaling Rs.4,45,15,229/- should not be brought to tax as undisclosed and unexplained income u/s.69A of the Act. Finding no response from the assessee, the AO passed ex parte assessment order and made an addition of Rs.4,45,15,229/- u/s.69A of the Act. According to the Ld.AR of the assessee, the reason for not responding to the show cause notices (SCN) issued by the AO, was not intentional/willful/deliberate but it was because the notices didn’t drop in the ‘Inbox’ of the assessee/Auditor, but unfortunately it got delivered in the ‘SPAM’ account of the assessee and therefore, it went unnoticed. On appeal, the Ld.CIT(A) has dismissed the appeal ex parte qua assessee without going into the merits of the case. We don’t countenance the action of the Ld.CIT(A) for not deciding the grounds of appeal as required under sub-section 6 of Section 250 of the Act. Be that as it may, we note that the assessment order has also been passed ex parte order qua assessee, and the assessee has given reason that the notices issued by the AO has gone into the SPAM account of the assessee/Auditor, because of which, assessee/Auditor was not aware of the assessment proceedings going on before the AO which led to passing of ex parte order wherein the addition of Rs.4,45,15,229/- was made. Before us, the assessee has filed huge Paper Book comprising of ‘405’ pages wherein the assessee has filed the following documents:

Sl.No. Particulars Page No. 1 Books of Accounts with 1-377 Ledger Vouchers 2 Journal Voucher Register 378-402 3 Trial Balance 403 4 Profit & Loss A/c 404 5 Balance Sheet 405

4.

In the light of the evidences filed before us (supra) and the fact that the AO as well as the Ld.CIT(A) has passed ex parte order, and since the AO is the primary authority vested with the powers to assess the income of an assessee, and since, he didn’t get opportunity to look into the relevant documents, it would be in the interest of both sides that the assessment is restored back to the file of the AO for de novo assessment; and for such an action, we rely on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).

5.

In the light of the above discussion, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO for de novo assessment. The assessee is directed to file the written submissions and other relevant documents to prove the nature and source of money deposited in bank accounts as noted by the AO. Since there is negligence on the part of the assessee, cost of Rs.10,000/- is imposed which the assessee should remit to the State Legal Aid Authority, Hon’ble Madras High Court, and produce necessary proof of depositing of the same before the AO and thereafter, the AO to frame de novo assessment after hearing the assessee in accordance to law.

6.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 05th day of May, 2025, in Chennai.

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