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Facts
The assessee's appeal against an ex-parte assessment order by the AO under Section 144 and subsequently upheld by the CIT(A) was filed with a delay of 355 days. The assessee contended that they did not receive proper notices from the CIT(A) at the correct email ID, leading to the ex-parte order, and similar circumstances prevented them from presenting their case before the AO. The additions challenged include unexplained cash deposits during demonetization under Section 69A read with Section 115BBE, and estimated business profit.
Held
The Tribunal condoned the delay in filing the appeal, set aside the order of the CIT(A), and restored the matter to the Assessing Officer for a fresh decision. This was subject to the condition that the assessee deposits Rs. 5,000/- in the Prime Minister Relief Fund and furnishes proof of deposit to the AO. The appeal was treated as allowed for statistical purposes.
Key Issues
1. Whether the delay in filing the appeal by 355 days should be condoned. 2. Whether the ex-parte assessment order passed under Section 144 by the AO and upheld by the CIT(A) without proper notice to the assessee was valid. 3. Whether cash deposits during demonetization could be treated as unexplained income under Section 69A read with Section 115BBE. 4. Whether the estimation of business profit was justified.
Sections Cited
144, 69A, 115BBE
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Income Tax Appellate Tribunal, CHANDIGARH
Before: SH. SANJAY GARG
ORDER The present appeal has been preferred by the assessee against the order dated 27.01.2024 of the Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘the CIT (Appeals)] pertaining to 2017-18 assessment year.
The assessee in this appeal has taken the following grounds of appeal :
ITA 413/CHD/2025 A.Y. 2017-18 2 1. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified in dismissing the appeal of the assessee/ appellant by holding that the ground of appeal is not tenable and upholding the additions made by the assessing officer.
2. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), is not justified in upholding the ex-parte order passed under section 144 of the Income Tax Act, 1961 by the Ld. Assessing Officer, that too without giving an opportunity of being heard. The same is 'against the principles of natural justice.
3. That in the facts and circumstances of the case, the learned Authorities below are not justified in treating the cash deposited in the bank account during the demonization period as unexplained income of the assessee/ appellant under section 69A read with section 115BBE of the Income Tax Act, 1961. The said addition is absolutely illegal and not sustainable in the eyes of law.
4. That in the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeals) is not justified in upholding the addition of Rs.4,17,430/- made by estimating the business profit of the assessee @ 19% of the total receipt.
5. That the order of the Ld. CIT(A) is bad in law and Facts
3. As per the report of the Registry, the appeal is time barred by 355 days. A separate application has been filed for condonation of delay, wherein, it has been pleaded that the assessee did not come to know about the notices/date of hearing before the ld.CIT (Appeals). It has been pleaded that the CIT (Appeals) sent the notices of hearing at a different e-mail Id and not at the e-mail Id which was mentioned in appeal Form No.35 furnished before him. The assessee, thus, was not aware of the dates of hearing before the CIT (Appeals) resulting into an ex-parte order of the CIT (Appeals). That even the assessee did not receive the copy of the order of the CIT (Appeals). Therefore, the delay has occurred in filing the appeal. The ld. counsel for the ITA 413/CHD/2025 A.Y. 2017-18 3 assessee has submitted that the assessee has a fair case on merit and assessee may be given an opportunity to present his case before the AO. He, in this respect, has brought my attention to the impugned assessment order to submit that the same is also an ex-parte/best judgement assessment order passed by the AO u/s 144 of the Income Tax Act. The ld. counsel for the assessee has submitted that due to certain unavoidable circumstances, assessee could not present his case before the AO also.
The ld. DR, on the other hand has relied upon the findings of the lower authorities.
Considering the rival submissions, I am of the view that interest of justice will be well served if the assessee is given an opportunity to present his case before the AO, however subject to payment of a reasonable cost which I assess at Rs.5000/- to be deposited in Prime Minister Relief Fund. Accordingly, the impugned order of the CIT (Appeals) is set aside and the matter is restored to the file of AO for decision afresh but subject to the condition that the assessee will deposit a sum of Rs.5,000/- to the Prime Minister Relief Fund and furnish the evidence/receipt of such deposit before the AO6. With the above observations,
ITA 413/CHD/2025 A.Y. 2017-18 4 appeal of the assessee is treated as allowed for statistical purposes.