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Facts
The assessee did not file an income tax return for AY 2013-14. Information revealed insurance commission income and substantial cash/term deposits, leading the AO to reopen assessment under Section 147. Despite filing a belated return, the assessee failed to comply with subsequent notices, resulting in a best judgment assessment with significant additions for unexplained money and undisclosed income.
Held
The Tribunal found that the CIT(A) erred by dismissing the assessee's appeal for non-prosecution without considering the merits, contrary to established legal principles. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for a de novo assessment, granting the assessee a fresh opportunity to present their case, albeit with a nominal cost for non-compliance.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without considering the merits, and if the assessee should be granted a fresh opportunity for hearing before the Assessing Officer.
Sections Cited
147, 148, 143(2), 142(1), 144, 69A, 144B, 250, Chapter-VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
1 ITA.No.230/Hyd./2025 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.230/Hyd./2025 Assessment Year 2013-2014 Nagankesy Venkata The Income Tax Officer, Reddy, SANGAREDDY Ward-1, SANGA REDDY PIN – 502 221 vs. Telangana. PAN ACHPN6425F PIN – 502 032. (Appellant) (Respondent) For Assessee : CA Kumar Pal Tated For Revenue : Shri Gurpreet Singh, Sr. AR Date of Hearing : 21.07.2025 Date of Pronouncement : 25.07.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the assessee against the order dated 17.01.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2013-2014.
Brief facts of the case are that, the assessee is an individual and had not filed his return of income for the assessment year 2013-2014. As per the information
2 ITA.No.230/Hyd./2025 available, during the previous financial year relevant to assessment year 2013-2014, the assessee has earned an income of Rs.8,571/- towards insurance commission, and the assessee has deposited cash of Rs.1,90,85,150/- maintained with Andhra Bank, Mogadampally Branch, Sangareddy District vide Savings Bank A/c.no.xxxxx2302. On verification from ITBA portal, it is noticed that, the assessee had not filed return of income for the assessment year 2013-2014, admitting the income earned from commission of Rs.8,571/- and also not disclosed the source of funds for the cash deposits made of Rs.1,90,85,150/- and term deposit of Rs.2,00,000/-. Therefore, the Assessing Officer had reason to believe that income chargeable tot ax has escaped assessment and reopened the assessment u/sec.147 of the Income Tax Act, 1961 [in short “the Act”]. The Assessing Officer issued notice u/sec.148 of the Act on 30.03.2021 through ITBA portal and served upon the assessee. In response, the assessee also filed his return of income on 30.04.2021 declaring total income of Rs.3,14,570/-. Thereafter, the Assessing Officer issued
3 ITA.No.230/Hyd./2025 notice u/sec.143(2) of the Act on 21.01.2022 and communicated the copy of reasons for reopening the assessment. Further, during the course of assessment proceedings, the Assessing Officer issued notices u/sec.142(1) of the Act on 28.01.2022 and 09.02.2022 and also show cause notice u/sec.144 of the Act on 17.02.2022. Subsequently also, the Assessing Officer issued notices u/sec.142(1) of the Act on 12.11.2021, 28.01.2022 and 09.02.2022. In response to the said notices/show cause notice, the assessee neither appeared nor furnished any documentary evidences to substantiate his case. In absence of any reply from the assessee, the Assessing Officer determined the total income of the assessee at Rs.1,97,47,540/- as against the returned income of the assessee at Rs.3,14,570/- by making addition of unexplained money u/sec.69A of the Act amounting to Rs.1,92,93,721/-, undisclosed income of Rs.4,764/-, disallowance as per Chapter-VIA amounting to Rs.45,000/- and addition on account of undisclosed income of Rs.89,485/- vide best Judgment assessment order passed
4 ITA.No.230/Hyd./2025 u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.
On being aggrieved by the assessment order passed by the Assessing Officer, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A) also, despite service of notices u/sec.250 of the Act, the assessee did not chose to appear nor furnished any documentary evidences in support of his claim. Therefore, the learned CIT(A), in absence of any documentary evidences placed before him, sustained all the additions made by the Assessing Officer.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
CA, Kumar Pal Tated, Learned Counsel for the Assessee submitted that, the learned CIT(A) has erred in dismissing the appeal filed by the assessee for non- prosecution and upheld the additions made by the Assessing Officer towards cash deposit into bank a/c and commission received from LIC of India and also adhoc
5 ITA.No.230/Hyd./2025 disallowance of agriculture income, without appreciating the fact that, the Assessing Officer has considered total credits into bank account including cash deposit of Rs.1,92,93,721/-, whereas the total deposits into bank a/c including cash and credit was only Rs.66,68,517.50. Although, the assessee could not explain it’s case with relevant evidences, but, the fact remains that, the assessee has narrated the facts before the learned CIT(A). Further, the learned CIT(A) without considering the relevant facts, has simply sustained the additions made by the Assessing Officer for want of prosecution from the assessee. He, therefore, submitted that, given one more opportunity, the assessee would file relevant details to justify it’s case. Therefore, he submitted that, the matter may be set-aside to the file of Assessing Officer.
Shri Gurpreet Singh, learned Sr. AR for Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the assessee did not file any evidences in support of his case before the Assessing Officer which is evident from the ex-parte order passed by the 6 ITA.No.230/Hyd./2025 Assessing Officer. Before the learned CIT(A), the assessee neither appeared nor submitted any details. Therefore, the learned CIT(A) passed ex-parte appellate order for non- prosecution. Since the appellant could not explain as to why he has not appeared before the authorities below, there is no reason to give another opportunity to the assessee. He, therefore, submitted that, the order of the learned CIT(A) should be upheld.
We have heard both the parties, perused the material on record and the orders of the authorities below. Admittedly, the assessee did not file relevant evidences in support of his case before the Assessing Officer, except filing return of income, in response to notice issued u/sec.148 of the Act, which is evident from the subsequent notice issued u/sec.142(1) of the Act on various dates, for which, no compliance from the assessee. Therefore, we cannot find fault with the best judgment assessment order passed by the Assessing Officer. Further, although, the assessee has filed appeal before the learned CIT(A), once again, there is no compliance, which is evident from the ex-parte order
7 ITA.No.230/Hyd./2025 passed by the learned CIT(A), where the case was listed for hearing on many occasions, but, no compliance from the assessee. However, the fact remains that, the learned CIT(A) dismissed the appeal filed by the assessee for non- prosecution without considering the issues on merits on the basis of material available on record. It is well established principle of law by the decisions of various Courts/ Tribunals that, even in case of non-appearance of the appellant, the appeal should be decided on merits on the basis of material available on record. Since the learned CIT(A) has dismissed the appeal filed by the assessee for non-prosecution and without considering the issues on merits on the basis of material available on record, in our considered view, the issues needs to be set-aside to the file of Assessing Officer for reconsideration. Since the assessment proceedings itself is ex-parte and the assessee did not get proper opportunity of hearing, in our considered view, the matter needs to be set-aside to the file of Assessing Officer. Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of Assessing Officer
8 ITA.No.230/Hyd./2025 with a direction to consider the case of the assessee de novo, after providing reasonable opportunity of hearing to the assessee to explain his case. The assessee shall furnish relevant details in support of his case as and when the case is called for hearing. Further, the assessee is also directed to pay a nominal cost of Rs.10,000/- [Rs.Ten Thousand Only] for showing lethargic approach before the lower authorities and the costs imposed above shall be paid to Prime Minister’s National Relief Fund and produce the relevant proof of payment to the Registry of the Tribunal within 15 days from the date of this order.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 25.07.2025.