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Facts
The assessee filed an income return for A.Y. 2013-14, which was selected for scrutiny. Despite notices under Section 143(2) being issued, no reply was filed, leading the Ld. AO to assess a significantly higher income. The Ld. CIT(A) dismissed the assessee's appeal on grounds of limitation and merits, as the assessee claimed unawareness of notices due to the firm's dissolution and the partner's illness.
Held
The Tribunal set aside the orders of the Ld. AO and Ld. CIT(A), remitting the case back to the Ld. AO for fresh adjudication after hearing the assessee. The penalty appeal under Section 271(1)(c) was also set aside as the main order was quashed.
Key Issues
Whether the Ld. CIT(A) was justified in dismissing the appeal on limitation and merits without providing the assessee an opportunity to be heard, especially when the assessee pleaded unawareness of notices and presented evidence regarding the firm's dissolution and partner's illness.
Sections Cited
143(2), 271(1)(c)
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Income Tax Appellate Tribunal, “D” BENCH, KOLKATA
Before: SHRI PRADIP KUMAR CHOUBEY, JM & SHRI RAKESH MISHRA, AM
The brief facts of the case is that the assessee has filed the return of income for the A.Y. 2013-14, declaring total income at ₹1,89,150/-. The case of the assessee was selected for scrutiny. Subsequently, notices u/s 143(2) of the Income-tax Act, 1961 (the Act) was issued. The assessee did not file any reply in response to the notices, as a result of which the ld. AO assessed the total income at ₹37,76,140/-. Aggrieved by the said order, the assessee preferred the appeal before the ld. CIT (A), wherein the appeal of
Being aggrieved and dissatisfied, the assessee has preferred the appeal.
The ld. AR by filing an affidavit submitted that the assessee firm was unaware of the notices issued by the ld. AO and due to this the assessee could not appear before the ld. AO to present his case. The ld. AR has given undertaking that the proper compliance will be made, if the appeal of the assessee being remitted back to the file of the ld. AO to pass a fresh order after hearing the assessee. His further submission is that the ld. CIT (A) has dismissed the appeal of the assessee first of all on the ground of limitation by not condoning the delay and also on merit. The ld. AR has filed documents before us which according to him are the essential piece of evidence to substantiate the case of the assessee. His prayer is that the assessee has to give an opportunity to place his case before the ld. Assessing Officer.
The ld. DR though supports the impugned order but did not raise any objection in remitting the appeal of the assessee to the file of the ld. AO for fresh adjudication.
Upon hearing the submission of the respected parties, we have perused the order of the ld. lower authorities and find that the AO has assessed the income of the assessee when there was no compliance on behalf of the assessee. The ld. CIT (A) has also dismissed the appeal of the assessee when assessee did not furnish any documentary evidences before the ld. CIT (A). The ld. AR has filed an affidavit which are as follows: -
“I, Subash Kumar Agarwal, son of Late Hira Lal Agarwal aged about 59 years, by religion Hindu, residing at 1, Kalitala Lane, Howrah 711106 do hereby solemnly of firm and state as follows: -
That I am one of the partners of M/s Subash Kumar Agarwal and, as such, I am competent to swear this affidavit on behalf of the said firm.
2. That an assessment proceeding was initiated for AY 2013 -2014 on 12.09.2014.
3. That the assessee, a partnership firm was dissolved in the month of May 2013. 4. That the assessee firm was unaware of the notices issued by the AO the assessee firm had dissolved and I was unwell. 5. That it was only on receipt of the tax recovery notices from the department, I came to know about the initiation of the assessment proceedings and assessment order being passed. 6. That an appeal was prepared and filed before the CIT(A) only on 10.01.2019 7. That I give an undertaking that proper compliance will be made in case the abovementioned matter is restored back to the lower authority by the Hon'ble Tribunal 8. That the facts stated in para 1 to 7 are true to the best of my knowledge and belief and paragraph 8 is an undertaking given by me.” 07. The assessee has also filed following documents: -
a. Copy of dissolution deed. b. Copy of certificate from the doctor. c. Copy of letter from the TRO. d. Copy of ITR filing record.
Going over the order passed by the lower authorities, considering the affidavit, we are inclined to restore the appeal of the assessee before the ld. AO for fresh adjudication at the interest of justice demands to that. Accordingly, the order passed by the ld. AO confirming by the ld. CIT (A) are hereby set aside. The appeal of the assessee is remitted back to the file of the ld. AO for fresh adjudication after hearing the assessee. The assessee is directed to co-operate in the proceedings. The appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24.06.2025.