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Facts
The assessee's credit card payments of ₹.90,50,998/- were treated as unexplained expenditure under Section 69C by the Assessing Officer, leading to a rectified total income of ₹.82,80,924/-. The CIT(A) dismissed the assessee's appeal ex-parte due to non-response to notices, which the assessee attributed to circumstances beyond their control.
Held
The Tribunal condoned the delay in filing the appeal before it and remanded the matter back to the CIT(A) for fresh adjudication on merits, subject to the assessee paying ₹.5,000/- to the State Legal Aid Authority within 30 days. The CIT(A) is directed to consider the assessee's condonation petition for delay at the CIT(A) level and decide the appeal afresh.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte and if the matter should be remanded for a fresh decision on the merits of the addition made under Section 69C.
Sections Cited
69C, 154
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 06.06.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.
We find that this appeal is filed with a delay of 81 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 3 grounds in his appeal and mainly challenged the exparte order of the ld. CIT(A) in confirming the addition made by the Assessing Officer.
Brief facts of the case are that the assessee filed his original return of income on 10.02.2018 admitting total income of ₹.4,99,260/-. The case was selected for limited scrutiny to verify credit card payments. Against the notices, the assessee furnished credit card statements to settle the credit card dues. The Assessing Officer asked the assessee to furnish the source for payment of credit card dues with documentary evidences. The assessee submitted credit card payment details and claimed that the payments were made to the credit card bills from his internal generation of cash and payment made through the available limit of other card, but, the assessee did not furnish comprehensive explanation for the source of payment of credit card dues. On consolidation of assessee’s submissions, the Assessing Officer noted that the assessee made payments to an extent of ₹.90,50,998/- and as the assessee failed to substantiate the source for the above payments made, the same were treated as unexplained expenditure under section 69C of the Income Tax Act, 1961 [“Act” in short] and added to the returned income of the assessee. Subsequently, after verification of the credit card statement, the Assessing Officer passed rectification order under section 154 of the Act determining total income of the assessee at ₹.82,80,924/-. The assessee carried the matter in appeal before the ld. CIT(A). Since there was no response to the notices issued by the ld. CIT(A), the ld. CIT(A) dismissed the appeal filed by the assessee.
The ld. AR Shri B. Ramakrishnan, F.C.A. submits that non response to the notices issued by the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond assessee’s control. He further submits that the ld. CIT(A) did not adjudicate the ground raised by the assessee on merits. Thus, the ld. AR prayed that one more opportunity may be afforded to the assessee for pursuing his case before the ld. CIT(A).
The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 4 of the impugned order and argues that the ld. CIT(A) has given ample opportunities to the assessee, but, it was not availed. She vehemently argued that the costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the ld. CIT(A).
Considering the facts and circumstances of the case and submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) subject to the condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the ld. CIT(A) shall satisfy the payment of cost and afford an opportunity to the assessee for filing condonation petition in support of an affidavit for the delay. The ld. CIT(A) shall consider the same and condone the delay. The ld. CIT(A) shall decide the matter afresh in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.