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Facts
The assessee, an AOP, filed its income tax return. The case was reopened under Section 147 due to a mismatch of Rs.1,17,39,571/- between declared receipts and departmental data. Due to continuous non-compliance, the Assessing Officer completed an ex-parte assessment under Section 147 read with Section 144 read with Section 144B, making the entire difference an addition, which the CIT(A)/NFAC subsequently upheld ex-parte.
Held
The Tribunal noted the ex-parte orders by both authorities and the assessee's claim of being an AOP unfamiliar with tax proceedings. In the interest of justice, it restored the matter to the Assessing Officer, directing a final opportunity for the assessee to file a reconciliation statement and requisite details, after which the AO should decide the issue as per law.
Key Issues
Whether the ex-parte assessment and first appellate orders, passed due to the assessee's non-compliance regarding an unexplained receipt mismatch, should be sustained, or if the assessee deserves a final opportunity to present its case.
Sections Cited
147, 148, 142(1), 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the ex-parte order dated 12.06.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2019-20.
Facts of the case, in brief, are that the assessee Datta Digambar Sahakari Vahatuk Kamgar Sanstha Ltd. is an AOP and filed its return of income on 20.09.2019 declaring total income of Rs.61,50,780/-. Subsequently the assessee filed a revised return on 06.02.2021 declaring the same income. The case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) with the reason that there is mismatch between the total receipts shown by the assessee and the information available in the database of the department, according to which there is a difference of Rs.1,17,39,571/- and the difference remained unexplained. Subsequently, notice u/s 148 of the Act was issued to the assessee on 24.03.2023. Since there was no response from the side of the assessee, the Assessing Officer issued notice u/s 142(1) of the Act 5 times due to non-compliance on various occasions. The Assessing Officer thereafter issued show cause notice asking the assessee to explain as to why the order should not be passed ex-parte. Since there was again non-compliance from the side of the assessee, the Assessing Officer completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act determining the total income of the assessee at Rs.1,78,90,351/- by making the addition of Rs.1,17,39,571/-.
Since, despite 3 opportunities granted by the Ld. CIT(A) / NFAC there was no compliance from the side of the assessee, the Ld. CIT(A) / NFAC upheld the addition made by the Assessing Officer in absence of any material before him.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that the Assessing Officer as well as Ld. CIT(A) / NFAC have passed the order ex-parte. She submitted that the assessee is an AOP and the members are not well versed with the intricacies of tax proceedings. She submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details. She accordingly submitted that the matter may be restored to the file of the Assessing Officer.
The Ld. DR on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee. He submitted that despite number of opportunities granted by the Assessing Officer, there was no compliance from the side of the assessee to the statutory notices issued by the Assessing Officer. Similarly, there was no compliance before the Ld. CIT(A) / NFAC despite 3 opportunities granted. Since the assessee has scant regard to the department, therefore, the order of the Ld. CIT(A) / NFAC sustaining the addition made by the Assessing Officer should be upheld.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that the case of the assessee was reopened on the basis of discrepancies between the gross receipts shown at Rs.15,54,73,072/- whereas the information available in the database and AIR/SFT/ Insight information shows the receipts to be Rs.16,72,12,643/-. Since there is a difference of Rs.1,17,39,571/- which remained unexplained, the Assessing Officer, after recording reasons, reopened the assessment as per provisions of section 147 of the Act and the notice u/s 148 of the Act was issued to the assessee. Since there was non-compliance to the statutory notices issued u/s 148 and 142(1), the Assessing Officer completed the assessment determining the total income of the assessee at Rs.1,78,90,351/- by making the addition of Rs.1,17,39,571/-. Since there was no compliance from the side of the assessee despite 3 opportunities granted by the Ld. CIT(A) / NFAC, he dismissed the appeal filed by the assessee. We find the assessee sought adjournment on one occasion but on two occasions there was non-compliance from the side of the assessee for which the Ld. CIT(A) / NFAC passed the order ex-parte sustaining the addition made by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that in the interest of justice, the assessee should be given an opportunity to substantiate the difference in the receipts by filing re-conciliation statement. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and make its submissions, if any, without seeking any adjournment under any pretext failing which the Assessing Officer shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 26th August, 2025.