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Facts
The assessee filed a return of income for AY 2012-13. The case was reopened under Section 147 of the Act, and the Assessing Officer added Rs. 11,74,082/- as unexplained cash credit on account of investment in a penny stock company. The assessed income increased to Rs. 16,69,230/-.
Held
The Tribunal found that the CIT(A) had passed an ex-parte order without going into the merits of the case. Therefore, the Tribunal remanded the issue back to the CIT(A) to re-examine the matter on merits after providing a reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without affording proper opportunity to the assessee to represent their case.
Sections Cited
10(38), 147, 142(1), 271(1)(c), 250
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
order
: May 20, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against an order dated 25.11.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
At the outset, it is noted that there is a delay of 14 days in filing the instant appeal before the Tribunal. The assessee has submitted an application for condonation of such delay explaining reasons for the delay. We, after perusing the petition made in the application, satisfy that there were bona fide and sufficient reasons for such delay. We, therefore, condone the delay and admit this appeal for adjudication.
Assessment Year: 2012-13 Kakoli Ganguly, Legal Heir of Haradhan Halder
Brief facts of the case are that the assessee filed his return of income for assessment year 2012-13 by declaring total income of Rs.5,05,143/-. However, on receipt of the information from DDIT, Kolkata regarding the investment in penny stock company namely M/s Konark Commercial & Industries Ltd. and claimed deduction u/s 10(38) of the Act to the tune of Rs.10,54,082/-. The case of the assessee was reopened u/s 147 of the Act after obtaining necessary approval from the higher authorities consequent to enquiry and satisfaction of the Assessing Officer. Accordingly, statutory notice u/s 142(1) of the Act was issued and served upon the assessee. In compliance to the same, daughter of the assessee or legal heir of the assessee namely Smt. Kakoli Ganguly represented and the Assessing Officer completed the assessment in the hands of the legal heir. During the assessment proceedings, multiple notices 142(1) along with detailed questionnaires were also issued to the assessee seeking information regarding investment in penny stocks namely M/s Konark Commercial & Industries Ltd. After considering the reply of the assessee and various materials available on record, the Assessing Officer viewed that the investment was made in non-viable company i.e. M/s Konark Commercial & Industries Ltd., which was registered as bogus stock company and the Assessing Officer treated Rs.11,74,082/- as unexplained cash credit towards transaction in shares of M/s Konark Commercial & Industries Ltd. and the Assessing Officer made the addition of Rs.11,74,082/- in the hands of the assessee and the added the same to the income of the assessee thereby increasing the assessed income of the assessee at Rs.16,69,230/- and doing so, the Assessing Officer also initiated penalty u/s 271(1)(c) of the Act for concealment of income.
Aggrieved by the above order, the assessee preferred an appeal before the ld. CIT(A). However, the appeal of the assessee was dismissed Assessment Year: 2012-13 Kakoli Ganguly, Legal Heir of Haradhan Halder by the ld. CIT(A) sustaining the order of the Assessing Officer solely on the ground of non-compliance on various notices fixed for hearing.
Dissatisfied with the above order, the assessee preferred appeal before this Tribunal raising various grounds. However, the primary contention of the assessee is that the impugned order of the ld. CIT(A) was an ex parte order and the assessee did not get proper opportunity to represent her case, therefore, one more opportunity may be given to the assessee in order to substantiate the claim of the assessee before the ld. CIT(A).
5. On the other hand, the ld. DR objected to such prayer made by the assessee stating that although sufficient opportunities have been given to the assessee, the assessee failed to comply with the notices issued by the ld. CIT(A), therefore, the appeal was rightly dismissed by the ld. CIT(A). He also stated that the assessee could not show any valid reason for non-prosecution of her case before the ld. CIT(A) hence, the appeal may be dismissed in limine.
We, after hearing the rival submissions and perusing the materials available on record, find that in the present case, since the impugned order of the ld. CIT(A) passed ex parte without going into merits of the case and the assessee could not represent the case instead of multiple opportunities have been provided by the ld. CIT(A), therefore, in the interests of justice, we deem it necessary to remand the whole issue to the file of the ld. CIT(A) with a direction to re-examine the matter on merits after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to strictly comply with the notices issued by the ld. CIT(A) as and when asked for without any fail and in case, the assessee failed to appear in remand proceedings, the ld. CIT(A)
Assessment Year: 2012-13 Kakoli Ganguly, Legal Heir of Haradhan Halder may pass a speaking order in accordance with law on the basis of materials available on record. 5. In terms of the above, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 20th May, 2025.