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Facts
The assessee, a cattle feed trader, challenged an ex-parte assessment order passed by the AO regarding unexplained cash deposits of Rs. 2.49 crore. The AO's order contained contradictory findings regarding the production of books of accounts and their rejection under Section 145(3). The CIT(A) upheld the addition due to the assessee's non-compliance and failure to produce additional evidence under Rule 46A.
Held
The Tribunal observed the contradictory conclusions by the AO and the lack of objective analysis by the lower authorities. It set aside the orders of the lower authorities and remitted the matter back to the AO for de novo adjudication, granting the assessee a final opportunity to present its case and supporting evidence.
Key Issues
The key legal issues included the validity of an ex-parte assessment order with contradictory findings, the lack of objective and comprehensive analysis by lower authorities on cash deposits, and the opportunity for the assessee to present evidence during assessment and appellate proceedings under Rule 46A.
Sections Cited
250, 145(3), 46A
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
Years: 2018-19 Mr.Asirvatham Madalaimuthu, Income Tax Officer, Prop:Deepika Traders, Ward-1(1), No.11, Varatanapalli Salai Road, Krishnagiri Asst. Unit, Church Complex, Income Tax department Kandhikuppam, Krishnagiri Dist., Tamil Nadu-635 104. [PAN: BWKPM7080H] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : Shri S.Sridhar(Erode) Advocate प्रत्यर्थी की ओर से /Revenue by : Shri Nilay Baran Som, CIT सुिवाई की तारीख/Date of Hearing : 26.12.2024 घोर्णा की तारीख /Date of Pronouncement : 12.02.2024 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2024-25/1067409759(1) dated 07.08.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2018- 19. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 07.08.2024 passed by NFAC, Delhi.
2.0 At the outset, the Ld. Counsel for the assessee informed that the Ld.AO has passed an ex-parte order holding assessee’s failure to file details regarding the source of cash deposits in his bank accounts of Rs. 2,49,89,780/-. The assessee is reportedly in the business of retail and wholesale of cattle feed trading. It was argued that the Ld. AO has taken contradictory arguments that is on page-2 it has stated that the assessee has not produced any books of accounts and on page-4 it has held that in the light of defects in the books of accounts the same are rejected u/s 145(3). The Ld. Counsel submitted that Ld. First Appellate Authority has confirmed the addition on the premise that firstly the assessee had failed to comply with the statutory notices of the Ld. AO and secondly that no request was made before him for admission of any evidences under Rule-46A. It was accordingly argued by the assessee that the matter may be considered for remitting it back to the Ld. AO for re-adjudication. The Ld. Counsel for the assessee assured that full compliance would now be made. The Ld. DR relied upon the order of authorities below. 3.0 We have heard rival submissions in the light of material available on records. The inadequate compliance by the assessee before the Ld.AO and Ld.CIT(A) is made out from records. However, the lower authorities have not done any independent enquiry to buttress their
Page - 2 - of 4 arguments. The contradictory conclusions drawn by the Ld. AO are also borne on records. Be that as it may be, we are of the view that the matter concerning cash deposits in assessee’s bank accounts and its connection with the trading results have not been objectively and comprehensively analyzed by the lower authorities. We are of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file supporting evidences before the Ld.AO. Accordingly, the order of lower authorities is set aside and the Ld. AO is directed to re-adjudicate the matter de novo after giving due opportunity of being heard and by passing a speaking order. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. Any non-compliance on the part of the assesse can be adversely viewed. The assessee is at liberty to produce all or any other evidences deemed relevant in support of its Page - 3 - of 4 claims before the Ld. AO during the re-adjudication proceedings. Accordingly, all the grounds of appeal raised by the assessee are therefore allowed for statistical purposes. 4.0. In the result, the appeals of the assesse is allowed for statistical purposes. Order pronounced on 12th , February-2025 at Chennai. Sd/- Sd/- ( एबी टी. वकी) (अयिताभ शुक्ला) (ABY T VARKEY) (AMITABH SHUKLA) न्यानयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 12th , February-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT – Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
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