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Facts
For AY 2017-18, the assessee filed a return of income of Rs. 4,95,190/-, but information suggested escaped assessment of Rs. 73,39,987/- from land transactions. Assessment was completed ex-parte by the AO under Section 144 read with Section 144B, adding Rs. 5,00,000/- as unexplained cash credit under Section 68. For AY 2018-19, the assessee did not file a return despite notices, leading to an ex-parte assessment under Section 144 read with Section 144B, with various additions under Sections 69A, 69, and 68. In both cases, the CIT(Appeals) dismissed the assessee's appeals ex-parte due to non-compliance.
Held
The ITAT observed that the CIT(Appeals) dismissed the appeals ex-parte without considering their merits. To ensure natural justice, the Tribunal remitted both appeals back to the CIT(Appeals) for fresh adjudication on merits, with a direction to decide them afresh and cautioned the assessee to cooperate with the proceedings.
Key Issues
Whether the CIT(Appeals) was justified in dismissing the appeals ex-parte without deciding them on merits, especially when the underlying assessments were also completed ex-parte due to the assessee's non-compliance.
Sections Cited
147, 148, 143(3), 142(1), 68, 250, 144, 148A(b), 148A(d), 144B, 69A, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
The present appeals bearing and 819/KOL/2025 are directed at the instance of assessee against the orders of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, both dated 17th February, (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy 2025 passed for Assessment Years 2017-18 and 2018-19 respectively.
The ld. Authorized Representative of the assesese has filed a petition dated 23rd June, 2025 before the Bench with a prayer for short adjournment of cases fixed for hearing as he could not prepare the paper book in order to represent his case properly before the Bench. Leaving aside his prayer, I decided to dispose of the appeals after perusing the material available on record.
First we take the ITA 818/KOL/2025 for the assessment year 2017-18. Brief facts of the case are that the assessee filed his return of income for the A.Y. 2017- 18 on 29.03.2018 declaring total income of Rs. 4,95,190/- The assessee during the year under consideration was involved in the transaction of sale and purchase of land. Subsequently the investigation unit Jalpaiguri of the department had carried out investigation/ enquiries in the case of the assessee and prepared the report which was later forwarded to the Office of ITO Ward-1 (1), Jalpaiguri for necessary action. Thereafter for the verification of the issues proceedings u/s 147 of the Act were initiated in this case by the ITO Ward-1 (1), Jalpaiguri after taking prior approval of the competent authority. The notice u/s 148 of the Act dated 30/03/2021 was issued to the assessee whereby assessee was required to furnish the return of income within 30 days of receipt of letter but 2 (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy assessee had failed to file the return of income within due date. As per the information available in the insight portal that the assessee had purchase and sale of land during the FY 2016-17 relevant to AY 2017-18 amounting to Rs.73,39,987/- but the assessee filed his return of income of Rs.4,95,190/- on 29.03.2018 which has not been included in the return of income for the AY 2017-18. Therefore, the purchase sale of land of the assessee to the tune of Rs.73,39,987/- had escaped assessment within the meaning of section 147 of the Income Tax Act. No scrutiny assessment under section 143(3), where return of income was filed for the AY 2017-18, therefore, only requirement to initiate proceedings under section 147 of the Act for escapement of assessment. Notice under section 142(1) of the Act was issued along with detailed questionnaire to the assessee but no reply was received from the assessee. In the meantime, the case of the assessee was selected under the faceless assessment scheme and the case was transferred to the Faceless Assessment Unit. A notice was issued to the assessee to furnish the information and in response, the assessee furnished the reply on 15.02.2022 whereby the assessee has requested the reasons of reopening of case and also the bifurcation of the escaped income of Rs.73,39,987/-. In compliance to the notice issued under section 142(1) of the Act dated 25.02.2022, the assessee submitted the computation of income, statement of bank accounts, 3 (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy details of movable and immovable property along with sources of income. Since the assessee failed to file supporting documents to substantiate his claim that the source and nature of loan was for land advance and hence the amount of Rs.5,00,000/- remained unexplained and accordingly the amount of Rs.5,00,000/- was treated as unexplained cash credits under section 68 of the Act by the ld. Assessing Officer and added to the total income of the asseessee. Thus, the ld. Assessing Officer assessed the total taxable income of the assessee at Rs.9,95,190/-Being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) dismissed the appeal of the assessee ex- parte by mentioning as under :- “4. During appellate proceedings statutory notices u/s.250 of the I.T. Act were issued and duly served on the appellant on ITBA on 23.05.2023, 11.07.2024, 29.07.2024, 14.08.2024, 21.11.2024 and 06.01.2025, however appellant did not respond to any of these notices issued. The appellant also failed to respond to the enablement of communication window issued by the NFAC on 09.11.2022. It is also to be noted that the appellant failed to respond even to any of the statutory notices issued by the AO u/s 142(1) of the I.T. Act and hence the assessment was finalized ex- parte u/s 144 of the I.T. Act. 4.1 Considering the consistent non-compliance by the appellant and in the absence of any explanation and authentic documentary evidences in support of grounds of appeal raised, I do not find any reason to interfere with the findings given by the AO in the assessment order and hence the addition made by the AO in the impugned assessment order is upheld. All the grounds of appeal raised by the appellant stand dismissed. (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy
5. On being aggrieved, the assessee preferred an appeal before the ITAT. filed by the assessee before the Tribunal, brief facts are that the assesee did not file his return of income for the AY 2018-19. As per information available, the assessee received pension income of Rs.2,30,407/- and salary income of Rs.2,61,960/- aggregating to Rs.4,92,367/- under the head “income from salary”. The assessee has made cash deposits to the tune of Rs.5,80,000/- in SBI, Siliguri Branch in addition to other than cash credits of Rs.26,94,587/- during the period relevant to the AY 2018-19. During the relevant period, the assessee has purchased a car by payment of cash amounting to Rs.4,07,700/- and also purchased a land for the consideration of Rs.11,58,000/- jointly with Mohammad Hakimuddin. A show- casue notice issued under section 148A(b) and order under section148A(d) was passed on 31.03.2022 in the absence of any explanation from the assessee. A notice under section 148 was issued on 31.03.2022 calling for the return of income with 30 days of receipt of the notice, but the assessee did not respond and not file his return of income for the AY 2018-19. As the assesese has not furnished any explanation and information in response to the show-cause notice, the ld. Assessing Officer had no option except to complete the assessment basing on the available information as proposed in the show-cause notice. Finally, ld. Assessing Officer 5 (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy completed the assessment under section 144 read with section 144B of the Act determining the taxable income of the assessee at Rs.40,95,327/- [i.e. income from other sources in absence of any proof of salary i.e. Rs.5,01,886/-, Rs.20,179/- regarding variation in respect of interest income, Rs.9,87,700/- relating to variation in respect of unexplained money u/s 69A (cash deposit Rs.5,80,000/- and cash payment Rs.4,07,700/-), Rs.5,79,000/- in respect of unexplained investment under section 69, and Rs.20,06,562/- with respect to variation for unexplained credits under section 68]. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte and taken the same view in the appeal of the assessee for AY 2017-18 at para 4 in page 4 as stated above. Thereafter the assessee preferred an appeal before the ITAT.
At the time of hearing, ld. Counsel for the assessee contended that the ld. CIT(Appeals) dismissed the appeals of the assessee ex- parte without going into the merit of the case. The ld. CIT(Appeals) was of the view that in absence of any submission inspite of given so many opportunities to the assessee to substantiate his claim in support of his contention, the contention raised by the assessee cannot be accepted.
At the outset, ld. Departmental Representative submitted that sufficient opportunity was being provided to the assessee but the assessee failed to appear before the ld. CIT(Appeals). Therefore, the ld. CIT(Appeals) has no other option except dismissing the 6 (A.Y. 2017-2018) & (A.Y. 2018-2019) Dilip Roy appeals and he pleaded to uphold the orders passed by the ld. CIT(Appeals) in both the appeals.
I have heard both the sides and perused the material available on record. The ld. CIT(Appeals) dismissed the appeals of the assessee ex-parte without going into the merit of the case. By considering the totality of the facts and circumstances of the case, and in order to ensure the principle of natural justice, I am of the view that it is a fit case to provide one more opportunity to the assessee. Therefore, I remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeals without any inference on the observations of earlier orders passed by him and to decide it afresh on merit. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate orders in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in both the appeals are allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 28/07/2025.