Loading judgment…
Facts
The assessee, running M.R.Traders, filed a return for AY 2017-18. The AO noticed a significant difference between total receipts and bank credits, leading to a notice u/s.148. The assessee did not comply, and the AO made an addition u/s.69 r.w.s. 115BBE.
Held
The Tribunal restored the appeal to the AO for de novo hearings, setting aside the CIT(A)'s ex-parte order. The assessee was granted another opportunity due to principles of natural justice, subject to a cost of Rs.5,000/-.
Key Issues
Whether the assessee was denied natural justice by the ex-parte orders of the AO and CIT(A), and if a fresh opportunity for hearing should be granted.
Sections Cited
148, 69, 115BBE, 147, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI
The captioned appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 12.12.2024 for Assessment Year 2017-18.
Brief facts are as under: The assessee is an individual running a business in the name of M.R.Traders filed his return of income for assessment year 2017- 18 declaring total income of Rs.4,98,160/-. On perusal of profit & loss account submitted by the assessee, the AO noticed that there was a huge difference of Rs.3,61,60,024/- between the total receipts shown by the assessee and total credits as per his bank account and assessee has shown very less receipts in return of income. Therefore, the AO issued notice u/s.148 dated 31.03.2021 requiring the assessee to furnish certain details. However, the assessee has not complied with the notices. Thus, the AO has completed the assessment on best judgement basis by making addition of Rs.3,61,60,024/- as unexplained investment u/s.69 r.w.s. 115BBE of the Act.
Assessee further challenged order of assessment u/s147 r.w.s. 144 read with section 144B of the Act before the ld.CIT(A) who proceeded ex-parte and dismissed appeal of the assessee. Aggrieved by the CIT(A) order, assessee is in further appeal before us.
We have heard both the parties and perused material on record. Before us, the ld. Counsel for assessee submitted that the though CIT(A) has sent the notices, however, those notices were not received by the assessee. Therefore, assessee did not find occasion to file the written submissions/responses. Therefore, ld. counsel prayed that the assessee may be provided an adequate and proper representation to file evidence and documents, if any, to substantiate his case. 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 the case and prayed for dismissal of the appeal.
We have heard rival submissions and perused materials on record. Though, we concur with the submissions of Ld. Sr. DR, however, keeping in mind the principle of natural justice, we deem it appropriate to grant another opportunity of hearing to the assessee. We also find that assessee has not properly represented before the ld.CIT(A), despite notices for the reasons stated above. We also note that even before AO the order is ex-parte. Accordingly, the impugned orders are set aside and the appeal is restored back to the file of the AO for de novo appeal hearings, after affording proper opportunity of hearing to the assessee, subject to cost of Rs.5,000/- which shall be deposited by the assessee within 30 days from the date of receipt of these orders 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, who shall proceed for de novo appeal hearings, after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents regarding disallowance, if any, forthwith without any fail, failing which AO shall be at liberty to proceed with the appeal hearings 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 1st April, 2025