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Facts
The assessee, an individual, failed to file his income tax return for Assessment Year 2018-19. Information revealed cash deposits, TCS on motor vehicle purchase, and amounts received from relatives. The Assessing Officer issued various notices which went unanswered, leading to an ex-parte best judgment assessment.
Held
The Tribunal noted that the assessee failed to participate before both the Assessing Officer and the CIT(A). Despite the negligence, to meet the ends of justice, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the Assessing Officer for a fresh assessment.
Key Issues
Whether the assessee was provided sufficient opportunities to represent his case before the lower authorities, and if not, whether the matter should be remanded for a fresh assessment.
Sections Cited
148, 142(1), 144B, 147, 144, 68, 40A(2)(b)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA
अपीलाथ� की ओर से/Appellant by : Mr. K. Vishwa Padmanabhan, C.A. ��थ� की ओर से/Respondent by : Ms. Deeptha, Addl. C.I.T. सुनवाई की तारीख/Date of Hearing : 29.04.2025 घोषणा की तारीख/Date of Pronouncement : 05.05.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-3, Chennai, dated 03.01.2025 and pertains to assessment year 2018-19.
Brief facts are that the assessee is an individual and not filed his return of income for the Assessment Year 2018-19. As per the information available with the department it was noticed that the assessee had made cash deposit to the tune of Rs.61,77,580/- and TCS on purchase of motor vehicle for a consideration of Rs.11,14,340/- and also received amounts from relatives
:-2-: ITA. No.:407/Chny/2025 u/s.40A(2)(b) to the tune of Rs.28,10,700/-. In order to verify the facts, the Assessing Officer issued notice under Section 148 dated 31.03.2022 requiring the assessee to furnish necessary details with documentary evidence. Further, a show cause notices under section 142 (1) dated 05.01.2023 and 17.01.2023 were also issued requiring the assessee to explain the nature and source of cash deposits along with supporting documentary evidences. Subsequently, a show cause notice under Section 144B dated 31.01.2023 and another notice dated 09.02.2023 were issued to the assessee. However, the assessee did not respond to the above notices issued by the Assessing Officer. Therefore, the Assessing Officer completed the assessment by passing an order u/s.147 r.w.s. 144 of the Act dated 23.03.2023 on best judgment basis by making the following additions. - Cash deposit as unexplained money U/s.68 Rs.61,77,580/- - Purchase of Motor Car Rs.11,14,340/- - Payment and receipt of amounts U/s.40A(2)(b) Rs.28,10,700/- Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT (A).
Before the ld.CIT(A) also, the assessee has neither filed written submissions nor filed any documentary evidence in support of his claim to the notice of hearing issued. Therefore, the CIT(A) dismissed the appeal by confirming the order of the ld. Assessing Officer by passing an order dated 03.04.2025. Aggrieved by the order of CIT (A), the assessee has filed appeal before us.
The ld.AR submitted that the assessee has not received notices issued by the ld.CIT(A). Hence, the appeal was not prosecuted before the CIT(A) even
:-3-: ITA. No.:407/Chny/2025 the assessment order was also passed u/s.147 r.w.s.144 r.w.s.144B of the Act by the A.O. Therefore, he prayed that one more opportunity may be provided to the assessee to represent his case before the Assessing Officer.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department and the same has been dismissed by the ld.CIT(A) - NFAC due to non-participation of the assessee before the first appellate authority. Since, the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.10,000/- 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.
In view of the above and to meet the ends of justice we set aside the order of 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 assessment order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
:-4-: ITA. No.:407/Chny/2025
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 05th May, 2025 at Chennai.