K K TEX,TIRUPPUR vs. ITO, WARD 1(4), TIRUPPUR, TRIUPPUR
What did the Tribunal hold?
The Tribunal, while acknowledging the assessee's failure to properly represent itself, restored the appeals to the AO for denovo assessment based on the principle of natural justice. This is subject to a cost of Rs. 5,000/- per appeal to be deposited by the assessee.
What were the facts?
The assessee firm did not file returns of income. The case was reopened based on information about high-value credits in the bank account. The AO assessed a portion of these credits as undisclosed income, which was upheld by the CIT(A).
What were the issues?
Whether to grant another opportunity for denovo assessment to the assessee who failed to appear before the appellate authorities despite notices, considering the principle of natural justice.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI JAGADISH
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
आदेश / O R D E R
PER MANU KUMAR GIRI (Judicial Member):
The captioned appeals filed by the assessee are directed against the orders of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] of even date 13.11.2024 for Assessment Years 2013- 14 and 2014-15.
& 85 /Chny/2025 :- 2 -:
Brief facts are as under:
The assessee firm had not filed the return of income. The case of the assessee reopened for the reason ‘ on the basis of information available with the department that the assessee has high value credits into its bank account either by cash or transfers amounting to Rs.95,05,290/- in FY 2012-13 Rs.2,82,28,865/- in FY 2013-14. In the assessment proceedings the assessee vide reply dated 08.03.2022 stated that the firm had engaged in the business of facilitating procurement of textile material on commission basis for traders in Tirupur. In view of the above facts, an amount of Rs.11,40,635/- (12% of Rs.95,05,290/-) and Rs.33,87,464/- (12% of Rs.2,82,28,865/-) are treated and assessed as undisclosed income of the assessee by the AO for AYs 2012-13 and 2013-14 respectively.
Assessee further challenged the both orders 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 confirmed the orders of the AO on merits. Aggrieved, assessee is in appeal before us.
Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the notices however, assessee sought adjournment but did not filed the written submissions. Therefore, he prayed that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his explanation regarding high value cash/transfer deposits. The ld.DR & 85 /Chny/2025 :- 3 -: stated that the assessee is habitual defaulter in appearing before the appellate authority hence no lenient view is to be taken in these cases and prayed for dismissal of the both appeals.
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 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 appeals are restored back to the file of Ld. AO for denovo assessments on merits after affording proper opportunity of hearing to the assessee subject to cost of Rs.5,000/- each appeal 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 deposits in both cases will be furnished by the Assessee before Ld.AO whose shall proceed for denovo assessments after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents regarding high value cash/transfer deposits, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the both assessment proceedings on merits as per law. The ld. counsel, who appeared also assured the bench that he will ensure that the assessee will prosecute these cases diligently.
& 85 /Chny/2025 :- 4 -:
In the result, both the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the open court on 25th March 2025 at Chennai.
More judgments on Section 147
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- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
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