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Facts
The assessee firm failed to file returns and its cases were reopened based on information regarding high-value cash/transfer credits in its bank accounts. The Assessing Officer assessed these credits as undisclosed income. The assessee challenged these orders before the CIT(A) who proceeded ex-parte and confirmed the AO's orders.
Held
The Tribunal set aside the impugned orders, restoring the appeals to the file of the AO for denovo assessment. This was done to grant the assessee another opportunity for hearing, subject to a cost of Rs. 5,000/- per appeal to be deposited with the Tamil Nadu State Legal Services Authority.
Key Issues
Whether the assessee should be granted another opportunity for denovo assessment despite not properly representing itself before the lower authorities and facing ex-parte orders.
Sections Cited
147, 144, 144B
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI JAGADISH
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.