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Facts
The assessee did not file an income tax return for AY 2017-18. The AO noticed cash deposits of Rs. 1,53,84,500/- in the assessee's bank account and initiated proceedings under Section 147, treating these deposits as unexplained income under Section 69A. Interest income of Rs. 8,248/- was also added. The assessee's appeal before the NFAC was dismissed ex-parte for delay.
Held
The Tribunal found that the orders of both the AO and NFAC were ex-parte. Considering the facts, the Tribunal felt the assessee deserved another opportunity to present his case. Therefore, the NFAC order was set aside, and the file was restored to the AO.
Key Issues
Whether the NFAC erred in dismissing the appeal ex-parte without considering the merits, and whether the assessee should be granted another opportunity to present their case before the AO.
Sections Cited
147, 148, 144, 144B, 69A, 115BBE, 271AAC(1), 271F, 270A, 272A(1)(d), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY
This appeal has been preferred by the assessee against the order dated 21.03.2025, passed by the National Faceless appeal Centre (NFAC), Delhi for Assessment Year 2017-18.
2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Assessing Officer (AO) noticed that the assessee had made cash deposits/credits to the tune of Rs.1,53,84,500/- in his Bank Account No.50315793262, maintained with Allahabad Bank. To verify the source of cash deposits made by the assessee in his Bank account, the AO initiated proceedings under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) after issuing notice under section 148 of the Act to the assessee. However, the assessee did not file any return of income in response to notice under section 148 of the Act. Thereafter, the AO issued statutory notices to the assessee. However, the assessee did not respond to the notices issued by the AO. The AO, therefore, proceeded to complete the assessment after issuing show cause notice to the assessee. While completing the assessment under section 147 read with sections 144 and 144B of the Act, the AO treated the cash deposits of Rs.1,53,84,500/- made by the assessee in his bank account during the year under consideration as his unexplained income and added the same to the total income of the assessee under section 69A of the Act. The AO also found that the assessee had earned interest of Rs.8,248/- on FDR with Central Bank of India, Mehdawal, which was also added to the income of the assessee.
2.1 The Assessing Officer also invoked the provisions of section 115BBE of the Act and also initiated penalty proceedings under sections 271AAC(1), 271F, 270A and 272A(1)(d) of the Act, separately.
3.0 Aggrieved, the assessee preferred an appeal before the NFAC. However, the appeal before the NFAC came to be dismissed ex-parte qua the assessee by the NFAC not condoning the delay in filing the appeal before the NFAC.
4.0 Now, the assessee has approached this Tribunal challenging the orders of the AO as well as the NFAC by raising the following grounds of appeal:
1. BECAUSE on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has grossly erred in dismissing the appeal in limine.
2. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi ought to have adopted a justifiable liberal approach in deciding the issue of condonation of delay in filing the appeal subserving the cause of justice.
BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to appreciate that while deciding the issue of condonation of delay in filing the appeal it has to be kept in mind that the merits of the case has to be examined before deciding the case in limine. 4. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to appreciate that the merits of the case cannot be discarded solely on the technical grounds of limitation as the substantial justice is paramount. 5. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to adjudicate the specific ground of appeal that the addition and imposition of tax and interest are based on preconceived and biased notions which is grossly unjustified, erroneous and unsustainable in law.
BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to adjudicate the specific ground of appeal
that the learned Assessing Officer in considering the cash deposited in bank account of partnership firm [PAN :AAHFR4710K] as total Income of assessee [PAN: BMMPK2586A] without considering the nature of transaction and account holder's detail.
7. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhl has failed to adjudicate the specific ground of appeal that the cash deposited in Allahabad Bank A/C No. 50315793262 in MSME CC/OD loan a/c is held in the name of partnership firm M/S RAMRATAN PRASAD CHHEDI LAL. Hence, the issue of notice u/s 148 and 142(1) is unjustified.
8. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to adjudicate the specific ground of appeal that the assessee's total income for the year was Rs.94,830/- which was much below the maximum amount not chargeable to tax.
9. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has failed to adjudicate the specific ground of appeal that no notice either on e-mail ID of the appellant or speed post has ever been received by the appellant.
10. BECAUSE the learned Commissioner of Income Tax (Appeal), NFAC, Delhi has falled to adjudicate the specific ground of appeal that the appellant was a taxpayer of around 44 years and during-the-second and third phase COVID-19 pandemic he was confined to bed due to COVID-
19 effect and still he has been suffering from mental and physical ill health. Thus, due to these reasons he could not respond to notice as well as file appeal within due dates. 5.0 None was present for the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. However, looking into the facts of the case, we proceed to adjudicate the appeal ex-parte qua the assessee.
6.0 Since the order passed by the AO was under section 144 of the Act and the NFAC had dismissed assessee’s appeal in limine, the ld. CIT (D.R.) had no objection to the restoration of appeal to the file of the Assessing Officer.
7.0 We have heard the ld. Senior Departmental Representative and have also perused the material on record. It is evident that the orders passed by both the authorities are ex- parte qua the assessee. Looking into the facts of this case, we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, we set aside the order of the NFAC and restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the assessee to present his case. We also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.
8.0 In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 31/07/2025.