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Facts
The assessee, an individual, filed a return for AY 2013-14. The AO initiated reassessment proceedings under Section 147/148, noting significant cash deposits, rental income, and interest in the bank account, and eventually assessed a much higher total income by adding unexplained income under Section 69A and rental income. The CIT(A) dismissed the assessee's appeal for non-prosecution after the assessee failed to comply with notices.
Held
The Tribunal upheld the validity of the notice issued under Section 148, citing extensions provided by TOLA due to the COVID period. However, it ruled that the CIT(A) erred in dismissing the appeal for non-prosecution, as the law mandates a decision on merits after providing a proper opportunity of being heard. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case for fresh adjudication.
Key Issues
1. Whether the reassessment proceedings initiated under Section 147/148 were time-barred. 2. Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding on merits or providing proper opportunity of hearing.
Sections Cited
147, 144B, 250, 246A, 148, 69A, 142(1), 250(6), 250(1), 251(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2013-14 dated 26.03.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“01. That the Assessment made under section 147 read with section 144B of the Income Tax Act, 1961 by the Income Tax Officer Ward 2(4), Raiganj, North Dinajpur and the Appeal preferred under section 246A thereon and confirming of the Assessment and dismissing of the said Appeal by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi was not based upon the facts and circumstances of the Case and cannot be sustained. ITA No.: 1085/KOL/2025 Assessment Year: 2013-14 Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma.
That determination of Total Income of Rs.9,89,64,541 and imposition of Income Tax (including various Interest charged) of Rs.9,14,47,209 taking unlawfully and arbitrarily was against the tenet of law and cannot be sustained.
That initiation of proceeding u/s. 147 for the Assessment year 2013- 2014 on 26.03.2021 after completion of 6(six) years was against the tenet of law and barred by limitation and cannot be sustained.
That the Appellant keeps reserve her right to add further Ground(s) on or before the hearing of the Appeal.”
Brief facts of the case are that the assessee is an individual and had filed his return of income showing total income of ₹23,090/- for AY 2013-14. The Assessing Officer (hereinafter referred to as Ld. 'AO') noted that the assessee had deposited cash amounting to ₹2,98,73,520/- in his bank account and had also received rent of ₹4,92,350/- and interest of ₹71,160/- during the FY 2012-13 relevant to AY 2013-14. He had also made payment to contractors amounting to ₹27,550/- during the year but had not filed his return of income for the said assessment year. Therefore, the Ld. AO had reasons to believe that the income of the assessee had escaped assessment within the meaning of section 147 of the Act and issued notice u/s 148 of the Act. In response to the said notice, the assessee filed his return of income showing total income of ₹33,091/-. The Ld. AO examined the facts of the case and treated a sum of ₹9,82,52,161/- as unexplained income u/s 69A of the Act and the rental income amounting to ₹6,89,290/-, which were added to the total income of the assessee and the total income was assessed at ₹9,89,64,541/- u/s 147 r.w.s. 144B of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who issued two notices for hearing to the assessee but the assessee ITA No.: 1085/KOL/2025 Assessment Year: 2013-14 Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma. remained non-compliant. The Ld. CIT(A) cited several decisions of various courts and Tribunals and held that the assessee was not keen on pursuing the appeal by filing requisite details to substantiate his claim and, therefore, the additions to total income as challenged in the grounds of appeal were confirmed and accordingly, the appeal of the assessee was dismissed. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined.
The Ld. AR submitted that the notice u/s 148 of the Act dated 26.03.2021 for AY 2013-14 was complied with, the return was filed but the assessment was made ex parte due to non-compliance before the Ld. AO. In the Form no. 35 filed, the email address given was incorrect and our attention was drawn to page 43 of the paper book where the email is mentioned but the wrong address is given. Our attention was also drawn to Para 2 at page 2 of the assessment order and it was also mentioned that the case was reopened on 26.03.2021 and the proceeding was stated to be time barred.
The Ld. DR countered the issue of the notice being time-barred by stating that during the COVID period on account of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), the notice issued till 30.06.2021 for AY 2013-14 was a valid notice. For the limitation expiring between 20.03.2020 to 31.03.2021, TOLA extended the limitation period to 30.06.2021. For the AY 2013- 14, the limitation for the issue of the notice was extended till 30.06.2021 ITA No.: 1085/KOL/2025 Assessment Year: 2013-14 Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma. and the notice issued u/s 148 of the Act on 26.03.2021 was a valid notice. The new regime came only with effect from 01.04.2021 and the new regime was not applicable to the notice issued. On the facts of the case. Notice u/s 142(1) of the Act was also issued.
We have considered the submissions made. Since the notice was issued on 26.03.2021, the new regime was not applicable as the old regime for the issue of notice under section 148 of the Act for reassessing the income was existing and on account of the limitation expiring on 31.03.2020, the limitation for issuing the notice u/s 148 of the Act was extended up to 30.06.2021 by TOLA. Hence, the challenge for the notice issued u/s 148 of the Act is not correct and this ground of appeal is dismissed. However, since the assessee could not comply before the Ld. AO on account of email address incorrectly mentioned nor did the Ld. AR appear before the Ld. CIT(A), therefore, in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. CIT(A) may be allowed so that a proper opportunity of being heard may be provided.
We further note that section 250(6) of the Act casts a duty upon the Ld. CIT(A) to pass an order in appeal which should state the points for determination and a decision as well as the reason for arriving at such decision. We find that at both the stages of assessment order before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee. The Ld. AR requested that the matter may be remitted to the Ld. CIT(A) while the Ld. DR supported the order of the Ld. CIT(A). We note that in Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras) it has been held that ITA No.: 1085/KOL/2025 Assessment Year: 2013-14 Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma. a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose the assessee's appeal merely by holding that the Assessing Officer's order is a self-speaking order which requires no interference. It has also been held in the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) after discussing the provisions of sections 250(1) and 251(1) that the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. Therefore, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and restore the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and to be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereafter pass an order in accordance with law. For statistical purposes, the appeal of the assessee is partly allowed.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 29th December, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 29.12.2025 Bidhan (Sr. P.S.) ITA No.: 1085/KOL/2025 Assessment Year: 2013-14 Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma. Copy of the order forwarded to:
Smt. Sneha Brahma, Legal Representative of Late Shyamal Kumar Brahma, Debinagar, Raiganj, Uttar Dinajpur, West Bengal, 733129. 2. ITO, Ward-2(4), Raiganj.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order