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Facts
The assessee, an individual running a rice mill, filed an ROI of Rs.3,11,420/- for AY 2017-18. The case was selected for scrutiny due to large cash deposits during demonetisation and an increase in sales/decrease in profitability. The AO made an addition of Rs.23,11,500/- as unexplained money under Section 69A, leading to an ex-parte order by the CIT(A) due to the assessee's non-participation.
Held
The Tribunal condoned the 421-day delay in filing the appeal due to the assessee's health issues, but noted the assessee's non-chalant attitude in not participating in previous proceedings. It set aside the CIT(A)'s ex-parte order and remitted the matter back to the CIT(A) for fresh adjudication after providing a reasonable opportunity to the assessee, levying a cost of Rs.5,000/- for non-participation.
Key Issues
Whether the CIT(A) was justified in passing an ex-parte order and whether the delay in filing the appeal before the ITAT should be condoned, and if the matter should be remitted back to the CIT(A) for fresh adjudication.
Sections Cited
139(1), 143(3), 69A
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI, HON’BLE & SHRI S. R. RAGHUNATHA, HON’BLE
आयकर अपीलीय अिधकरण, ‘सी’ �यायपीठ, चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी मनु कुमार िग�र, �ाियक सद� एवं �ी एस. आर. रघुनाथा, लेखा सद�य के सम� BEFORE SHRI MANU KUMAR GIRI, HON’BLE JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:537/Chny/2025 िनधा�रण वष� / Assessment Year: 2017-18 Pappathi, ITO, No.7/26, Raja Street vs. Ward 2, Aranthangi, PudukKottai – 614 616. PudukKottai – 614 616. [PAN: AKGPP-6709-H] (��यथ�/Respondent) (अपीलाथ�/Appellant) अपीलाथ� क� ओर से/Appellant by : Ms. Y.Sridhar, F.C.A. ��यथ� क� ओर से/Respondent by : Ms. Anitha, Addl.CIT सुनवाई की तारीख/Date of Hearing : 23.04.2025 घोषणा की तारीख/Date of Pronouncement : 25.04.2025 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 18.10.2023.
:-2-: ITA. No: 537/Chny/2025 2. The brief facts of the case are that the assessee is an individual, carrying on the business of modern rice mill in the name of M/s.Sri Karthik Modern Rice Mill. The assessee has filed return of income for the assessment year 2017-18 u/s. 139(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) on 12.10.2017 by declaring total income of Rs.3,11,420/-. The case was selected for COMPLETE scrutiny assessment under CASS for the reason that “Large cash deposit during demonetisation period and abnormal increase in Sales and decrease in profitability as compared to preceding previous year”. The statutory notices were issued by calling for various information to complete the assessment, and the assessee has not responded to the same. However, the assessee responded to the show cause notice and filed the details that the assessee has deposited cash of Rs.1,25,79,300/- during the impugned assessment year and Rs.25,63,500/- during the demonetisation period. Hence, the assessee had the Assessing Officer passed an order u/s.143(3) of the Act on 29.12.2019 by making an addition of Rs.23,11,500/- of cash deposit of SBNs as unexplained money u/s.69A of the Act. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A), NFAC.
:-3-: ITA. No: 537/Chny/2025
The ld.CIT(A), NFAC issued notices to the assessee by providing an opportunity to submit the documents and evidence in support of the grounds of appeal filed per para 5 of the ld.CIT(A) order. However, the assessee has failed to respond or submit any submissions before the appellate authorities and hence the ld.CIT(A) confirmed the order of the AO by dismissing the grounds of appeal filed by the assessee by passing an order dated 18.10.2023. Aggrieved by the order of the ld.CIT(A), NFAC, the assessee preferred an appeal before us with a delay of 421 days.
4. At the outset, the ld.AR for the assessee stated that the delay in filing the appeal is due to physical and mental health condition of the assessee, as the assessee was suffering from Disc prolapse, symptoms of muscle weakness and numbness and filed an affidavit along with the doctor’s certificate. Further, the ld.AR for the assessee stated that the order of the ld.CIT(A) has been passed without the participation of the assessee and hence prayed for one more opportunity before the ld.CIT(A) to prosecute the assessee’s appeal.
:-4-: ITA. No: 537/Chny/2025 5. Per contra, the ld.DR submitted that the assessee is negligent in responding to the notices of the department and hence for confirming the order of the ld.CIT(A).
We have heard rival contentions and noticed that the ld.CIT(A) has passed an exparte order by considering the information available and based on the AO’s order without the participation of the assessee in the first appellate proceedings. We note the assessee was suffering from health issues as per the affidavit filed, we are inclined to condone the delay in filing the appeal before us. However, we do not deprecate the non chalant attitude of the assessee in non-participation in appellate proceedings. 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.
In the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to :-5-: ITA. No: 537/Chny/2025 ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, 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 court on 25th April, 2025 at Chennai.