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Facts
The assessee deposited Rs. 9,45,000 cash during demonetization but failed to comply with notices issued under Sections 143(2) and 142(1). The AO completed assessment under Section 143(3) for AY 2017-18, assessing higher income, and the CIT(A) dismissed the subsequent appeal ex-parte due to non-compliance.
Held
The ITAT set aside the order of the Ld. CIT(Appeals) to uphold the principle of natural justice and remitted the matter back to the Ld. CIT(Appeals). The assessee is to be given another opportunity to be heard, with a caution to cooperate with the proceedings.
Key Issues
The key issue was whether the CIT(Appeals) was justified in dismissing the assessee's appeal ex-parte and if the assessee should be granted a further opportunity to present its case on merits.
Sections Cited
143(2), 142(1), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the assessee Shri Somnath Das Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 21, 2025 Date of pronouncing the order: February 26, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Addl./JCIT(Appeals), Kanpur dated 26th February, 2024 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Prahalad Rai Sutodia 2. Brief facts of the case are that the assessee is an individual, who filed his return of income for the assessment year 2017-18 on 25.03.2018 in ITR-2 declaring total income of Rs.4,86,610/-. In his return of income, the assessee has shown that cash amounting to Rs.9,45,000/- has been deposited in his Bank account during the demonetization period of 09.11.2016 to 31.12.2016. The case was selected for limited scrutiny by CASS. Notice under section 143(2) of the Act was issued to the assessee on 21.09.2018 by ITO, Ward-35(1), Kolkata from ITBA and duly served on the assessee. Further notice under section 142(1) of the Act was issued on 03.06.2019 alongwith detail questionnaire and served upon the assessee by e-mail requesting to submit his reply on or before 18.06.2019. Due to non-compliance by the assessee, the ld. Assessing Officer has left with no alternative but to assess the income of assessee on the basis of information/data available on the records and the assessment was completed under section 143(3) of the Act assessing the total income at Rs.14,31,610/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate its claim, but the appellant did not file the written submissions and did not represent the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal ex-parte on 26th February, 2024.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) did not consider the case on merit, rather he just upheld the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.14,31,610/- as unexplained. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate his claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing (A.Y. 2017-2018) Prahalad Rai Sutodia which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/02/2025.