SATYAJEET GAJANAN PATIL,KOLHAPUR vs. ITO WARD 1(3), KOLHAPUR

This appeal filed by the assessee pertaining to the Assessment Year 2017-18 is directed against the order dated 21.10.2024 passed by the National Faceless Appeal Centre, Delhi [in short ‘NFAC’) u/s.250 of the Income-tax Act, 1961 (in short ‘the Act) which inturn is arising out of the Assessment order passed u/s.144 of the Act dated 21.12.2019.

Facts apropos this appeal are that the assessee is an individual engaged in trading of Paints and Hardware material under the name and style “Mahalaxmi Traders” on wholesale and retail basis. Income of Rs.7,17,900/- was furnished in the return of income filed for the A.Y. 2017-18 on 07.02.2018. The case was selected for scrutiny through Computer Aided Scrutiny Selection (CASS) to examine the cash deposits made during demonetization period which was followed by valid serving of notices u/s.143(2) and 142(1) of the Act. There was no compliance to such notices by the assessee. In the event, ld. AO based on the bank statements obtained from DCB Bank Ltd., Uchgaon Branch and NKGSB Coop. Bank Ltd. Uma Talkies, Kolhapur Branch noticed that the assessee deposited cash during demonetization period of Rs.71,00,000/- in Specified Bank Notes and brought to tax the said sum as unexplained money u/s.69A and also invoked the provisions of section 115BBE of the Act.

Aggrieved assessee preferred appeal before the ld.CIT(A)/NFAC and no succour was provided to him by the ld.CIT(A)/NFAC owing to non-prosecution, without discussing anything on merits of the issues.

Now the assessee is in appeal before the Tribunal by raising the following grounds :

When the appeal was called for, none appeared on behalf of the assessee despite due service of notice of hearing. We therefore proceed to dispose of the appeal with the able assistance from the ld. Departmental Representative exparte qua the assessee.

We have heard the ld. Departmental Representative and perused the record placed before us. A mere perusal of the orders of the lower authorities would reveal that the Assessment Order as well as the First Appellate order were passed exparte owing to non-participation of the assessee. The assessee by way of above grounds seek restoration of the matter to the file of ld.CIT(A)/NFAC as having passed the orders exparte. Further, it is the settled position of law that even in case of exparte proceedings the ld.CIT(A)/NFAC is obliged to pass a speaking order as contemplated u/s.250(6) of the Act by giving reasons for arriving such decision and adjudication thereof in light of decision of the Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay). Considering the totality of the facts and circumstances prevailing in the instant case, we are of the opinion that assessee deserves one more opportunity to meet the ends of justice. In view thereof, finding of ld.CIT(A)/NFAC is set aside and the issues on merits are being remitted to the file ld.CIT(A)/NFAC for denovo adjudication to be carried out after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A)/NFAC shall be free to proceed in accordance with law. Effective grounds of appeal raised by the assessee on merits are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.