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Facts
The assessee, engaged in grain trading, did not furnish a return. The AO reopened the case under Section 147 upon noticing a large cash deposit in the assessee's bank account. The assessment was completed ex-parte after the assessee failed to respond to notices. The CIT(A) dismissed the appeal, upholding the AO's additions.
Held
The Tribunal found that the CIT(A) dismissed the appeal based on the incorrect impression that the assessee had not furnished any reply or compliance. The Tribunal noted that compliance was made before the predecessor authorities and during remand proceedings. The ex-parte order of the CIT(A) was set aside.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without considering the assessee's compliance and remand report, and whether the assessment proceedings under Section 147 were valid.
Sections Cited
147, 148, 142(1), 133(6), 144, 69A, 44AF, 243A, 243B, 243C
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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2010-11 Mr. Sudarshan Kisan Bhoi, Vs. ITO, Ward-3, Ratnagiri. 1520, Kalkai Nagar, At P.O. Bharne, Khed, Ratnagiri- 415709. PAN : ASAPB3569R Appellant Respondent Assessee by : Shri Bhuvanesh Kankani Revenue by : Shri Aviyogi Ambadkar Date of hearing : 11.03.2025 Date of pronouncement : 27.05.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 18.08.2023 passed by Ld. CIT(A)/NFAC for the assessment year 2010-11.
There is delay in filing of the present appeal. We are satisfied with the reasons mentioned in the condonation application duly supported by an affidavit that the assessee was prevented by reasonable cause for not filing the appeal within time. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeal.
The appellant has raised the following grounds of appeal :-
1. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that Ld. CIT(A)- NFAC erred in passing the order without perusing the submissions filed with Ld. CIT(A)-2 Kolhapur. Accordingly, the additions so upheld by Ld. CIT(A) be kindly deleted and appellant be granted just and proper relief in this respect.
2. Without prejudice to other grounds, on facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that Ld. CIT(A)-NFAC erred in passing the order without providing copy of remand report on additional evidences filed before Ld. CIT(A)-2, Kolhapur. Accordingly, the addition so upheld be kindly deleted and Appellant be granted just and proper relief in this respect.
3. On facts and circumstances prevailing in the case and as per provisions and scheme of the Act and per ITAT Rules, 1963 it is humbly prayed that, if the case is remanded back to the file of CIT(A)-NFAC since he did not peruse the submission filed before CIT(A)-2 Kolhapur and ITO-Ward (3) Ratnagiri during the course of remand proceedings, then Appellant be kindly awarded the cost of filing present appeal as per rule 32A of the ITAT Rules, 1963.
4. Without prejudice to other grounds, on facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the addition of Rs.37,08,310/- so made by Ld. AO and that upheld by Ld. CIT(A)-NFAC is incorrect and not according to the provisions of Act. Further, the income of Appellant be restricted to 5% of total turnover as per sec. 44AF of the Act. Accordingly, the Appellant be granted just and proper relief in this respect.
5. Without prejudice to other grounds, on facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the assessment proceedings initiated by Ld. AO are not in accordance with the provisions of Act in relation to re-assessment proceedings. Thus, the assessment proceedings 147 of the Act be kindly quashed and Appellant be kindly given appropriate relief in this regard.
6. Without prejudice to other grounds, on facts and circumstances prevailing in the case and as per provisions and scheme of the Act it be held that the interest computed u/s 243A, B and C of the Act be kindly deleted since the same is dependent on the incorrect and invalid additions so made by Ld. AO and that upheld by Ld. CIT(A). Accordingly, the Appellant be kindly given appropriate relief in this regard.
The appellant prays to be allowed to add, amend, modify, rectify, delete raise any grounds of appeal
at the time of hearing.”
4. Facts of the case, in brief, are that the assessee is an individual and said to be engaged in the business of trading in grains on retail basis and has not furnished its return of income for the period under consideration. As per the information in possession of the Department, it was noticed that the assessee had made cash deposit of Rs.36,30,583/- in his savings bank account accordingly the Assessing Officer issued a letter dated 06.11.2015 to the assessee which according to the Assessing Officer was duly served upon the assessee. The assessee did not made any response to the above said letter therefore the case was reopened and proceedings were initiated u/s 147 of the IT Act after obtaining approval from the competent authority. Subsequently, notice u/s 148 of the IT Act and notice u/s 142(1) of the IT Act were issued respectively, however no response was received from the side of the assessee. The Assessing Officer called information from the concerned bank by issuing notice u/s 133(6) of the IT Act. Since the assessee did not complied with any of the notices, the Assessing Officer completed the assessment u/s 147 r.w.s. 144 of the IT Act by determining the income at Rs.37,08,310/- as against no return filed by the assessee. The above said income includes unexplained money deposited in bank account covered u/s 69A of the IT Act of Rs.37,08,310/-.
5. Since according to Ld. CIT(A)/NFAC the assessee had not made any compliance at the appellate stage the addition made by the Assessing Officer were sustained and the appeal filed by the assessee was dismissed. It is this order against which the assessee is in appeal before the Tribunal.
6. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR further submitted that originally notice of appeal hearing was issued from the office of Ld. CIT(A)- 2, Kolhapur on 2nd October 2019 and in compliance to the same the assessee furnished written submission before Ld. CIT(A)/NFAC who forwarded the same to the Assessing Officer for his comments through remand report. The Assessing Officer then issued a letter and asked the assessee to represent his case on 10th of December, 2019. In response to this letter, the assessee also furnished a letter referring the additional evidences produce by him before Ld. CIT(A)- 2, Kolhapur and requested the Assessing Officer to consider them in his remand report. Copy of all these communications were produced before the bench in paper book. Ld. AR accordingly submitted before the bench that admittedly the assessee made compliance before Ld. CIT(A)- 2, Kolhapur and also before the Assessing Officer in connection with the remand report. However, Ld. CIT(A)/NFAC in his ex-parte order denied to have received any compliance from the side of the assessee and accordingly dismissed the appeal filed by the assessee. Accordingly, Ld. AR submitted before the bench that the ex-parte order passed by Ld. CIT(A)/NFAC may kindly be set-aside since it is based on wrong finding of fact.
7. Ld. DR appearing from the side of the Revenue relied on the orders passed by subordinate authorities and requested to confirm the same.
8. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that Ld. CIT(A) has dismissed the appeal of the assessee under the wrong impression that the assessee has not furnished any reply in compliance to the notices issued by his predecessor. Admittedly, prior to transfer of this appeal to NFAC, Delhi, notices were already issued by Ld. CIT(A)- 2, Kolhapur, and a remand report was also called from the concerned Assessing Officer who also issued notice to the assessee and the assessee also made compliance before him with regard to remand report required by Ld. CIT(A)- 2, Kolhapur. It was also the contention of Ld. counsel of the assessee that Ld. CIT(A)/ NFAC committed grave error in not considering the remand report forwarded by the concerned Assessing Officer and further erred in not providing the remand report to the assessee. Considering the totality of the facts of the case, we find force in the arguments of Ld. counsel of the assessee that the reply /response was submitted by the assessee and therefore the ex-parte order passed by Ld. CIT(A)/NFAC deserves to be set-aside wherein he passed the ex-parte order under the impression that no reply was furnished by the assessee. Accordingly we deem it appropriate to set aside the ex-parte order passed by Ld. CIT(A)/NFAC and remand the matter back to his file with a direction to decide all the grounds on merit as well as legal raised by the assessee afresh and as per fact & law after providing copy of remand report to the assessee and also after providing reasonable opportunity of hearing to the assessee. The assessee is hereby also directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents explanations and additional evidences if any in support of grounds on merit as well as legal, without taking any adjournment under any pretext otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Accordingly, ground number 1, 2, 4, 5 & 6 raised by the assessee are partly allowed for statistical purposes.
In ground No. 3 the assessee requested to award the cost of filing of present appeal to the assessee. In this regard we find that it was the transitional period during which the system was shifting from manual hearing to faceless hearing and therefore we do not find this to be a fit case for awarding the cost to the assessee. Thus, ground no.3 raised by the assessee is dismissed.