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Facts
The assessee failed to file its return of income for AY 2018-19. Based on information regarding cash deposits and interest income, the AO initiated reassessment proceedings. The assessee did not respond to notices, leading to an ex-parte assessment order.
Held
The Tribunal held that the CIT(A)/NFAC's order was in violation of Section 250(6) of the Act for failing to state points of determination and reasons for the decision. The Tribunal set aside the CIT(A)/NFAC's order and restored the issue to the CIT(A)/NFAC for fresh adjudication.
Key Issues
Whether the CIT(A)/NFAC erred in dismissing the appeal ex-parte without proper adjudication on merits, and whether the reassessment proceedings are valid when the assessee was not given adequate opportunity due to incorrect email communication.
Sections Cited
148A, 148, 147, 144, 144B, 69A, 133(6), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2018-19 Nandigram Krashi Awam Gram DCIT, Exemption Circle, Vikas Sanstha Suga, Aurangabad Sugaon (Barhali), Taluka Mukhed, Vs. Dist. Nanded-431715 PAN : AAATG6010A अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Kishor B Phadke (Virtual) Department by : Shri Ramnath P Murkunde Date of hearing : 03-07-2025 Date of 12-09-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 26.07.2024 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)”/“NFAC”] pertaining to Assessment Year (“AY”) 2018-19.
Briefly stated the facts are that it is a case of reassessment. The assessee did not file its return of income for AY 2018-19. Based on the information flagged as per risk Management Strategy formulated by the CBDT, the Ld. Assessing Officer (“AO”) found that the assessee has made cash deposits of Rs.1,95,50,170/- with Union Bank of India and has earned interest income from IDBI Bank Ltd. amounting to Rs.33,564/-. Accordingly, notice u/s 148A(b) of the Income Tax Act, 1961 (the “Act”) was issued which was not responded to by the assessee. Due to lack of any response furnished by the assessee, the Ld. AO based on the information available on record concluded that the income chargeable to tax has escaped assessment pertaining to cash deposits of Rs.1,95,50,170/- and interest income of Rs.33,564/- aggregating to Rs.1,95,83,734/- for the relevant AY 2018-19 vide order passed u/s 148A(d) of the Act dated 27.03.2022. Accordingly, notice u/s 148 of the Act was issued on 29.03.2022 which was duly served upon the assessee. In response to the said notice, the assessee did not file its return of income. Thereafter, several notices were issued by the Ld. AO, the details of which are provided in para 2 of his assessment order which remained un-complied with. The assessee submitted its part response to the final show cause notice issued on 07.03.2023 seeking compliance by 14.03.2023 asking the assessee to explain the source of cash deposits with supporting evidences. The Ld. AO simultaneously obtained information from various banks u/s 133(6) of the Act. In response thereto, IDBI Bank confirmed credit amount of Rs.15,97,493/- and Chhtrapati Rajarshi Shahu Urban Co-op. Bank Ltd. confirmed the credit amount of Rs.1,07,48,454/- in the assessee’s account. The assessee was also granted opportunity through video conference, however, no one appeared for and/or on behalf of the assessee at the scheduled time. The Ld. AO noted that though the assessee has submitted its reply on 12.03.2023 in response to the above show cause notice dated 07.03.2023 but has failed to explain, justify and substantiate that cash deposited was from explained source and tax treatment of interest income. The Ld. AO therefore proceeded to complete the assessment on 23.03.2023 u/s 147 r.w.s. 144 read with section 144B of the Act making an addition of Rs.3,18,96,117/- (Rs.1,95,50,170/- + Rs.15,97,493/- + Rs.1,07,48,454/-) as deemed income of the assessee u/s 69A of the Act for the reason that the assessee failed to offer any explanation about the nature and source of acquisition of the said money. He also made an addition of interest income of Rs.33,564/- as income from other sources for the reason that the same has not been offered for taxation by not filing income tax return.
On appeal several notices were issued by the Ld. CIT(A)/NFAC but all of these were not complied by the assessee. In the last notice issued by the Ld. CIT(A)/NFAC on 19.06.2024, seeking compliance by 04.07.2024, the assessee was specifically asked to submit : (i) evidence/documents/written submission in support of the grounds of appeal and statement of facts; (ii) any Jurisdictional High Court or Jurisdictional ITAT orders that the assessee wanted to rely upon; (iii) appellate orders passed by appellate authorities (whether in favourable to the assessee or otherwise) on the same issues as agitated by the assessee in the instant appeal; (iv) details of appeals pending before CIT(A)/NFAC/ITAT/ High Court filed by the assessee on issues which are similar to those agitated by the assessee in the instant appeal and (v) upload copy of return and submissions made during assessment proceedings. However, no compliance was made nor any adjournment application was filed by the assessee. The Ld. CIT(A)/NFAC therefore dismissed the appeal of the assessee for non-prosecution and upheld the order of the Ld. AO on the ground that during the appellate proceedings the assessee has not submitted any written or oral arguments with evidences against the findings of the Ld. AO inspite of several opportunities granted to the assessee and even during the assessment proceedings, the assessee had failed to explain, justify and substantiate its claim with any documentary evidence.
Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
1. The learned CIT(A), NFAC erred in law and on facts in confirming the addition of Rs.3,19,29,681/- u/s 68 of the ITA, 1961 on account of unexplained money made by the learned AO.
2. Learned CIT(A) ought to have granted an appropriate opportunity of being heard to the appellant for making requisite submission considering the principle of natural justice. The appellant intends to make all the requisite submissions along with related documentary evidence. However, the same could not be submitted since the notices have been glossed over by the appellant due to unavoidable circumstances.
3. The learned CIT(A), NFAC erred in law and on facts in confirming jurisdiction of learned Jurisdictional AO by issuing notice u/s 148 dated 29-03-2022 of the ITA, 1961. Appellant contends that notices ought to have been initiated by the Faceless assessing officer (FAO) considering the recent pronouncement in case of Hexaware Technologies Limited v/s ACIT (Bombay HC-162 taxmann.com 225). As such, the appellant contends that the present re-assessment proceedings are bad in law and ought to be quashed.
4. The appellant contends that, the appellant's books of account are audited under BPT as well as under ITA and as such, the same ought not to be disturbed.
5. The appellant contends that, the cash deposits have been made out of fees collected from students and as such, the same ought not to be treated as unexplained to the extent of such fees.
6. The appellant contends that, the cash has been withdrawn from time to time in the past, as such, the telescoping to the extent of earlier cash withdrawals ought to be granted to the appellant.
7. Appellant contends that, the appellant has carried out various inter-bank transfers which form part of the total credits which have been considered as unexplained credits. As such, the appellant contends that, the same ought not to be treated as unexplained to the extent of such inter-bank transfers.
8. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal.”
5. Although a number of grounds have been raised by the assessee, however, these are all relate to the ex-parte order of the Ld. CIT(A)/NFAC confirming the above additions made by the Ld. AO except ground No. 3 which has not been pressed by the Ld. AR and hence dismissed as “not pressed”.
The Ld. AR submitted that non-compliance to the notices issued by the Ld. CIT(A)/NFAC was not intentional as the notices were sent on the incorrect email id and hence not received by the assessee. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate its case by filing all the requisite details/ documentary evidence before the Ld. CIT(A)/NFAC. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the CIT(A)/NFAC to decide issue afresh on merit after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld. CIT(A)/NFAC. He accordingly submitted that the order of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee should be dismissed.
We have heard the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that despite number of opportunities granted, the assessee did not make any submission which constrained the Ld. CIT(A)/NFAC to dismiss the appeal filed by the assessee by passing an ex-parte order. Before us, the Ld. Counsel for the assessee has contended that the non-compliance was not intentional as the notices were sent on wrong email-id and therefore requested for an opportunity to be granted to the assessee to present and substantiate its case before the Ld. CIT(A)/NFAC by filing the requisite details/documentary evidences in support of its claim. From perusal of the order of the Ld. CIT(A)/NFAC, we find that he has dismissed the appeal of the assessee due to the absence of any evidence/ material/explanation offered by the assessee. The Ld. CIT(A)/NFAC has upheld the order of the Ld. AO without himself dwelling into the merits of the case. The Ld. Ld. CIT(A)/NFAC relied on the decisions in the case of CIT Vs. B. Bhattacharjee & Another, 118 ITR 461 (SC); New Diwan Oil Mills Vs. CIT, (2008) 296 ITR 495 (P & H); Estate of Late Tukojirao Holkar Vs. CWT, 223 ITR 480 (MP) and Pradeep Kumar Jhawar Vs. DCT, CC in (Kol-Tribunal) and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. None- the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
Considering the totality of the facts of the case and in the interest of justice and without going into the merits of the appeal, we deem it proper to set aside the order of the Ld. Ld. CIT(A)/NFAC and restore the issue to his file to decide the same afresh on merits as per fact and law after giving one final opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. The assessee is also directed to provide the correct email-id for receiving notices of hearing to the Department and remain vigilant in responding to the same. We direct and order accordingly. The effective grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 12th September, 2025.
Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 12th September, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,
िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune