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Facts
The Assessing Officer (AO) made an addition of Rs. 6,36,500 on account of cash deposits during demonetization and Rs. 7,15,807 as income from business. The assessee challenged the assessment order before the CIT(A), who proceeded ex-parte and confirmed the AO's order.
Held
The Tribunal, while noting the assessee's failure to appear before the CIT(A) and the ex-parte nature of the AO's order, restored the appeal to the AO for de novo assessment. This was done to ensure principles of natural justice, subject to a cost of Rs. 5,000 to be paid by the assessee.
Key Issues
Whether the assessee was prevented from appearing before the appellate authorities due to non-receipt of notices, and if a de novo assessment should be allowed on cost.
Sections Cited
69A, 144
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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 appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 12.09.2023 for Assessment Year 2017-2018.
Brief facts are as under: The AO made an addition of Rs.6,36,500/- on account of cash deposits during demonetization in the assessee bank account treating as unexplained cash u/s 69A of the Income Tax Act, 1961. The AO also assessed sum of Rs.7,15,807/- as income from business.
Assessee further challenged the order of assessment u/s 144 of the Act before the ld.CIT(A) who proceeded ex-parte and confirmed the order 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 8 notices but assessee failed to appear on account ofnon- receipt of notice by the assessee, hence the assessee was prevented from appearance on the purported dates. 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 cash deposits during demonetization. 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 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) despite notices for the reasons stated above. We also note that even before AO the order is ex-parte. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment on merits 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 this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld.AO whose shall proceed for denovo assessment after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents regarding cash deposits during demonetization, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the 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 his case diligently.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 25th March 2025 at Chennai.