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Facts
The assessee filed an income return and was selected for scrutiny. Notices were issued, but the assessee did not furnish explanations or evidence regarding cash deposits of Rs. 8,00,000 and investment in immovable property of Rs. 17,58,219. The Assessing Officer treated these as unexplained income and made additions under Section 69A, taxable under Section 115BBE, and initiated penalty proceedings.
Held
The Tribunal noted that the lower appellate authority (CIT(A)) dismissed the appeal without adjudicating on merits due to non-compliance by the assessee. The Tribunal set aside the order to the CIT(A) for fresh adjudication on merits, granting the assessee an opportunity to be heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits due to assessee's non-compliance, and if the case should be remanded for fresh adjudication.
Sections Cited
250, 143(1), 143(2), 142(1), 69A, 115BBE, 271AAC, 234A, 234B, 234C, 234D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 28.11.2023 for the Assessment Year 2017-18 against the order under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’].
The brief facts of the case are that the original return of income was filed by the assessee on 11.11.2017 declaring total income of Rs.3,03,880/-. The return was duly processed under Section 143(1) of the Act. The case was selected for complete scrutiny under CASS. Notice under Section 143(2) of the Act was issued through ITBA on 21.09.2018 which was served upon the assessee electronically. Further notice Assessment Year: 2017-18 Rohitji Chanduji Thakor vs. ITO Page 2 of 4 was also served upon the assessee on 25.09.2019 by Speed Post. Thereafter, notice under section 142(1) of the Act was also issued alongwith questionnaire on 23.05.2019, 04.07.2019, 22.07.2019 & 05.08.2019 through ITBA calling information which was also served upon the assessee electronically as well as by Speed Post. Further a show cause notice was issued on 29.11.2019 through ITBA as well as by Speed Post, which was served upon the assessee on 06.12.2019, asking to furnish certain details/clarification/explanation alongwith documentary evidence. In response to the show cause notice, the assessee did not furnish any reply/submission. As per the data available with the Assessing Officer, it was noticed that the assessee was having Bank account with HDFC Bank, Bopal Branch, Ahmedabad and deposited cash amounting to Rs.8,00,000/-. As the assessee had not furnished any explanation or any reply to the show cause notice issued on 29.11.2019, the amount of Rs.8,00,000/- deposited into Bank account was treated by the Assessing Officer as unexplained and added back to the total income of the assessee under Section 69A of the Act which is to be taxed under Section 115BBE of the Act. Penalty under Section 271AAC of the Act was initiated on the addition of Rs.8,00,000/-. It was also noticed that during the year under consideration that the assessee had entered into immovable property transaction and show cause notice was issued on 29.11.2019 calling for explanation. The assessee has purchased two properties and total share in the property including stamp duty was of Rs.17,58,219/-. In response to the show cause notice, the assessee didn’t furnish any details/evidence and source of investment in immovable property. Therefore, amount of Rs.17,58,219/- including stamp duty i.e. the investment made in immovable property was also treated by the Assessing Officer as unexplained and added back to the total income of the assessee under Section 69A of the Act which is to be taxed under Section 115BBE of the Act. Penalty under Section 271AAC of the Act was initiated on the addition of Rs.17,58,219/-.
Aggrieved with the Assessment Order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the impugned order and the appeal of the assessee was dismissed, as no compliance was made by the assessee before the ld. CIT(A) as well. The assessee is now in second appeal before us.
“1) The Ld. CIT(A) has erred in law and on facts of the case in deciding the appeal ex-parte in violation of principles of natural justice. 2) The Ld. CIT(A) has erred in law and on facts of the case in confirming the addition of Rs.8,00,000/- under Section 69A of the Act being cash deposits in the bank account of the appellant. 3) The Ld. CIT(A) has erred in law and on facts of the case in confirming the addition of Rs.17,58,219/- under Section 69A of the Act being investment in immovable property. 4) In any case, Section 69A of the Act has no application insofar as investment in immovable property is concerned. 5) The Ld. CIT(A) has erred in law and on facts of the case in upholding the action of the Ld. AO in invoking provisions of Section 115BBE of the act. 6) The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying interest under Section 234A/B/C/D/ of the Act. 7) The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in initiating penalty proceedings under Section 271AAC of the Act. 8) The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.”
5. Shri Tushar Hemani, Ld. Sr. Counsel appearing for the assessee submitted that the Ld. CIT(A) had not adjudicated the appeal of the assessee on merits and had dismissed the appeal in limine on the ground that the assessee had not made any compliance in the course of appeal proceeding. He submitted that the issues were not examined on merits as per the mandate of Section 250(6) of the Act. The Ld. Sr. Counsel requested that the matter may be set aside to the file of the Ld. CIT(A) for fresh adjudication of the appeal of the assessee on merits in accordance with law. The Ld. Sr. Counsel further submitted that the assessee will co-operate with the Ld. CIT(A) and furnish all necessary details and explanations as called for by the CIT(A) in the set aside appellate proceeding.
Assessment Year: 2017-18 Rohitji Chanduji Thakor vs. ITO Page 4 of 4 6. Per contra, Shri Ashok Kumar Suthar Ld. Sr. DR submitted that the assessee had neither appeared before the Assessing Officer nor before the Ld. CIT(A) and no compliance was made by the assessee at all at any stage. Under the circumstances, the Ld. CIT(A) had no occasion to examine the matter on merits as no material was ever brought on record by the assessee. Ld. Sr. DR supported the orders of the lower authorities.
We have considered the rival submissions. The assessee has not explained the reason for non-compliance either before the Assessing Officer or before the Ld. CITA). In the absence of any explanation, we deem it proper to impose a cost of Rs.5,000/- on the assessee, which should be paid to the Income Tax Department within 15 days of receipt of this order. Further, as the matter was not examined on merits by the Ld. CIT(A), we deem it proper to set aside the file to the Ld. CIT(A) with the direction to allow another opportunity of being heard to the assessee. The assessee is also directed to co-operate and comply with the notices issued by the CIT(A) in the said proceeding.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on this 28th April, 2025.