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Facts
The assessee, engaged in the retail pharmaceutical business, deposited Rs. 10,04,420/- in cash during the demonetization period. The AO, after the assessee failed to comply with notices, completed the assessment ex-parte under Section 144 and made additions. The CIT(A) dismissed the assessee's appeal for non-compliance.
Held
The Tribunal condoned the delay in filing the appeal and, considering the principle of natural justice, set aside the impugned order. The appeal was restored to the AO for de novo assessment with a cost of Rs. 10,000/- to be deposited by the assessee.
Key Issues
Whether the assessee was provided sufficient opportunity of being heard and whether the appeal should be restored for de novo assessment after payment of costs.
Sections Cited
142(1), 144, 69A, 115BBE
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
The captioned appeal filed by the assessee is directed against the order of the Ld. Ld. Commissioner of Income Tax (Appeals) (NFAC) Delhi [CIT(A)] dated 12.10.2023 for Assessment Year 2017- 18.
The registry has noted delay of 422 days in filing the appeal.
Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication.
The assessee is an individual, engaged in the business of retail in pharmaceutical products in the name of M/s.Arasu Medicals. During the course of assessment proceedings, it was noticed by the AO that assessee has deposited cash amounting to Rs.10,04,420/- into her bank account during demonetization period. Therefore, the AO issued notice u/s.142(1) of the Act on 09.03.2018. But the assessee failed to comply with the notice. Thus, the AO completed the assessment u/s.144 of the Act by passing ex-parte order on best judgment basis and made addition of Rs.10,04,420/-u/s.69A r.w.s. 115BBE of the Act.
Aggrieved, the assessee challenged order of assessment passed u/s.144 of the Act before the CIT(A). However, the assessee neither filed written submissions nor any evidences in support of its claim and failed to comply with the notices issued by CIT(A). Therefore, the CIT(A) dismissed the appeal filed by the assessee. Now, assessee is in appeal before us.
We have heard both the parties and perused records. Before us, the ld. Counsel for assessee submitted that assessee was not aware about the notices and the CIT(A) has passed an ex-parte order without providing sufficient opportunity of being heard. Therefore, he pleaded that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his case before the CIT(A). The ld.DR stated that the assessee is habitual defaulter in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of the appeal.
Though, we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) as well as before the AO despite notices for the reasons stated above. Therefore, the impugned order is set aside and the appeal is restored back to the file of AO for denovo assessment, after affording proper opportunity of hearing to the assessee, subject to cost of Rs.10,000/- which shall be deposited by the assessee within 30 days from the date of receipt of the order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the cost deposit will be furnished by the Assessee before AO. The assessee is directed to substantiate its case with all evidence and documents, if any, forthwith without any fail, failing which AO shall be at liberty to proceed with proceedings on merits as per law. The ld. counsel, who appeared also assured the bench that he will ensure that the assessee will prosecute the case diligently.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th April, 2025