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Facts
The assessee, a wholesale trader, had their income estimated ex-parte by the AO due to discrepancies in cash deposits. The CIT(A) also confirmed the ex-parte assessment. The assessee appealed, citing reasons like the Covid-19 pandemic for not appearing before the appellate authorities.
Held
The Tribunal condoned the delay in filing the appeal, citing the principle of natural justice. The impugned orders were set aside, and the appeal was restored to the CIT(A) for fresh hearing, subject to a cost of Rs. 5,000, to allow the assessee an opportunity to present their case with evidence.
Key Issues
Whether the assessee should be granted another opportunity to present their case before the CIT(A) after ex-parte orders were passed by both the AO and CIT(A) due to non-representation.
Sections Cited
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 04.09.2023 for Assessment Year 2013-14.
The registry has noted delay of 107 days in filing the appeal. Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication.
Brief facts are as under:
The assessee is an individual whole sale trader in building construction material. He derives income only from this business. The assessee has filed the return of income for AY 2013-14 on 24.09.2014 electronically admitting total income of Rs.5,93,630/- and paid tax due thereon of Rs.50,186/-. The case of the assessee was taken up for scrutiny under CASS for the reason to verify cash deposits in savings account which were more than the turnover.
The AO proceeded ex-parte and estimated the income u/s 144 of the Act under the beast judgment assessment. The income was estimated @15% on the admitted turnover of Rs.3,77,75,400/- which works out to Rs.56,66,310/- and also added interest income of Rs.2,56,700/- totalling Rs.59,23,010/-.
Assessee further challenged the ex-parte order of assessment passed u/s144 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 notices however, the assessee missed to received notices on account of Covid-19 pandemic hence the appeal was not prosecuted before the ld. CIT(A). Even notice issued after covid-19 was not received. 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 in savings account. 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 the 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 orders are set aside and the appeal is restored back to the file of Ld. CIT(A) for fresh appeal hearingafter 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 same will be furnished by the Assessee before Ld.CIT(A) whose shall proceed for denovo appeal hearing 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 in saving bank account, if any, forthwith without any fail, failing which ld. CIT(A) shall be at liberty to proceed with the appeal hearing as per law. The ld. counsel, who appeared also assured the bench that he will ensure that the assessee will prosecute this appeal case diligently. All the legal issues, if any, are kept open before the ld.CIT(A).
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 25th March 2025 at Chennai.