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Facts
The assessee appealed against an ex-parte dismissal by the CIT(A) for Assessment Year 2017-18, where the CIT(A) failed to consider the merits or the assessee's explanation despite notices being issued via email. The original assessment was framed under Section 144 due to non-filing of the return of income and unexplained cash deposits of Rs. 12,26,000, and the assessee cited the passing of its earlier counsel as the cause for non-compliance. A delay of 8 days in filing the appeal was condoned by the Tribunal.
Held
The Tribunal found that the CIT(A) erred in dismissing the appeal ex-parte without considering the merits. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case to the Assessing Officer for fresh adjudication, directing the AO to provide a fair hearing and decide the matter independently on its merits, requiring the assessee's full cooperation.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without adjudicating on merits, particularly when the original assessment was completed ex-parte due to non-filing of return and unexplained cash deposits, and the assessee cited the demise of its counsel.
Sections Cited
144
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Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order of the Ld. CIT(A)/ NFAC, Delhi dated 29.08.2024, for the Assessment Year 2017–18.
At the outset, the Registry has pointed out that there is a delay of 8 days in filing the present appeal, for which the assessee has filed a condonation application.
Upon consideration of the condonation application filed by the assessee, I am satisfied that sufficient cause has been demonstrated. Accordingly, the delay is hereby condoned, and the appeal is admitted for adjudication.
The assessee has raised several grounds of appeal, including the primary grievance that the CIT(A) passed an ex-parte order without deciding the appeal on merits, even though there was a sufficient cause for non-compliance with the appellate notices. The assessee has submitted that its earlier counsel had passed away, and the notices were not brought to its attention, leading to non-compliance.
I have perused the material available on record. The assessment was framed u/s 144 on account of non-filing of the return of income and failure to satisfactorily explain
2 the source of cash deposits amounting to Rs, 12,26,000/-. The Ld. CIT(A) also dismissed the appeal for non-prosecution, despite noting that notices were issued via email. However, the Ld. CIT(A) did not examine the merits of the assessee’s contentions, nor the explanation offered in the reply dated 07.10.2019 before the AO, wherein month- wise sales, purchase details and partner capital balances were allegedly provided.
In the interest of justice and fair play, it is my considered view that the matter should be remanded to the Assessing Officer for proper verification and reconsideration of the assessee’s submissions and supporting documents. The assessee shall extend full cooperation in the fresh proceedings and furnish all necessary documentary evidence to substantiate its claims.
Accordingly, I set aside the impugned order of the CIT(A) and restore the matter to the file of the Assessing Officer for fresh adjudication in accordance with the law, after affording a reasonable opportunity of being heard to the assessee.
It is clarified that nothing herein shall be construed as an expression on the merits of the case. The Assessing Officer shall decide the matter independently and uninfluenced by any observations made in the earlier orders.
In the result, appeal of the Assessee is allowed for statistical purposes.