Loading judgment…
Facts
The assessee, an individual, failed to file his return of income for AY 2017-18. The AO noticed a cash deposit of Rs.42,31,500/- and issued notices under Section 142(1) and a show cause notice, to which the assessee did not respond. Consequently, the AO made an addition of Rs.23,74,000/- under Section 69 on a best judgment basis.
Held
The Tribunal condoned the delay in filing the appeal, noting a reasonable cause due to miscommunication. It set aside the CIT(A)'s order and remitted the matter back to the AO for a fresh assessment after providing the assessee with an opportunity to present their case and file documents.
Key Issues
Whether a reasonable cause existed for the delay in filing the appeal, and if the matter should be remitted to the AO for fresh assessment due to non-participation before lower authorities.
Sections Cited
142(1), 144, 69
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA
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, vide order dated 12.02.2024.
At the outset, we find that there is a delay of 294 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 CIT (A) has sent the notices / communications to the tax consultant’s Email IDs and since the assessee has handed over the appeal papers to the tax consultants, the assessee was under a :-2-: ITA. No:481/Chny/2025 belief that they will respond to the notices. Therefore, the assessee didn’t respond to the notice issued by the CIT(A). 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.
Brief facts are that the assessee is an individual and not filed his return of income for the Assessment Year 2017-18. During the course of assessment proceedings, it was noticed by the Assessing Officer, that the assessee had made cash deposit to the tune of Rs.42,31,500/- during the demonetization period. In order to verify the facts, the Assessing Officer issued notice under Section 142(1) dated 24.11.2017 requiring the assessee to submit the return of income. Further, a show cause notice dated 15.05.2019 was also issued requiring the assessee to explain the nature and source of cash deposits along with supporting documentary evidences. However, the assessee did not respond to both the notices issued by the Assessing Officer. Therefore, the Assessing Officer completed the assessment under Section 144 of the Act on best judgment basis by making addition of Rs.23,74,000/- under Section 69 of the Act. 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. Therefore, the CIT(A) dismissed the appeal by confirming the order of the ld.
:-3-: ITA. No:481/Chny/2025 Assessing Officer. 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 the assessment order was passed under Section 144 by the ld. Assessing Officer. Therefore, he prayed that one more opportunity may be provided to the assessee to represent his case before the ld. 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.5,000/- 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 :-4-: ITA. No:481/Chny/2025 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.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 05th May, 2025 at Chennai.