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Facts
The assessee, engaged in export of cloth sales, filed their return for AY 2017-18. The case was reopened, but the assessee did not participate in assessment or appeal proceedings. The Assessing Officer passed an exparte order, which was confirmed by the CIT(A), who dismissed the assessee's appeal.
Held
The Tribunal noted that both lower authorities passed orders without the assessee's participation. To meet the ends of justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer for a denovo assessment.
Key Issues
Whether the lower authorities' orders passed exparte without the assessee's participation are legally sustainable, and whether a fresh opportunity should be granted.
Sections Cited
144, 147, 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI ABY T VARKEY & 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), ADDL/JCIT (A)-3, National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017- 18, dated 05.12.2024.
The assessee is an individual engaged in the business of export of cloth sales and filed his return of income manually for the assessment year 2017-18 on 02.05.2018 declaring total income of :-2-: ITA. No:350 /Chny/2025 Rs.4,40,070/-. The case was reopened accordingly, statutory notices were issued to the assessee. However, the assessee did not participate in the assessment proceedings and hence the assessing officer passed an exparte order under Section 144 r.w.s 147 of the Act dated 27.12.2019 by estimating income from business @ 8% of the turnover and also making an addition of Interest and duty drawback income Rs.25,93,632/- by rejecting the income declared in the return of income. Subsequently, the assessee filed an appeal before the ld. CIT (A), NFAC. However, the assessee did not participate in the appeal proceedings, in spite of providing four opportunities by the ld.CIT(A) from 22.02.2021 to 22.11.2024 as noted in paragraph 3 of the ld.CIT(A) order. Hence, the ld.CIT(A) passed an order dated 05.12.2024 by confirming the Assessing Officer’s order and dismissed the appeal of the assessee. Aggrieved by the order of the ld. CIT (A), the assessee is in appeal before us.
The ld.AR submitted that on the facts and circumstances of the case the order of the lower authorities in dismissing the appeal of the assessee is bad in law and is not legally justified. The ld.AR brought to our notice that both the orders of the Assessing Officer and that of ld.CIT(A) are passed without the participation of the assessee and hence prayed for one more opportunity before the Assessing Officer in the interest of natural justice. Further, the ld.AR stated that he
:-3-: ITA. No:350 /Chny/2025 undertakes to appear before the Assessing Officer and submit all the required information and documents as and when called for.
Per contra, the ld.CIT (A) fairly conceded for remitting the matter back to the Assessing Officer, since the order was passed u/s.144 of the Act.
We have heard the rival contentions and perused the material 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 made an addition and the same has been dismissed by the ld.CIT(A) - NFAC due to non-participation of the assessee in the first appellate proceedings. Therefore, we set aside the order of the ld.CIT(A), to meet the ends of justice we 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. Since the assessee has failed to participate in the appellate proceedings, 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. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
:-4-: ITA. No:350 /Chny/2025
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th April, 2025 at Chennai.