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Facts
The assessee did not file an Income Tax Return for AY 2014-15. Based on information of cash deposits of Rs. 1,90,90,465/- in a bank account, the assessment was reopened under Section 147. Due to continuous non-compliance with notices, the AO completed an ex-parte assessment under Section 144 read with Section 147, adding the entire amount under Section 69 and initiating penalty proceedings. The NFAC dismissed the assessee's appeal, again due to non-compliance, which the assessee attributed to being abroad for work and caring for ailing parents.
Held
The Tribunal acknowledged the assessee's non-compliance at both AO and NFAC levels but found reasonable cause for the same, considering the assessee's circumstances of working abroad and caring for parents. Consequently, the Tribunal restored the matter to the file of the Assessing Officer, directing a fresh opportunity of hearing to the assessee to present their case and evidence, with a warning that future non-compliance would result in an ex-parte order based on available records.
Key Issues
Whether the ex-parte assessment and appellate orders should be set aside due to the assessee's non-compliance, and if the assessee deserves a fresh opportunity to present their case.
Sections Cited
147, 148, 144, 69, 69A, 115BBE, 271F, 271(1)(c)
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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY
This appeal has been preferred by the assessee against order dated 24.01.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2014-15.
The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. On the basis of the information available with the Income Tax Department that the assessee had made cash deposits to the tune of Rs.1,90,90,465/- in his Bank Account No.0328010100001599 maintained with J.K. Bank, the case of the assessee was reopened under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) by issuing notice under section 148 of the Act. However, the assessee had not filed any return of income in response to notice under section 148 of the Act. The AO, thereafter, issued statutory notices to the assessee, requiring the assessee to furnish the details of cash deposits in his bank account. However, there was still no compliance from the side of the assessee. The AO, therefore, completed the assessment under section 144 read with 147 of the Act, assessing the total income of the assessee at Rs.1,90,90,465/- after making an addition of Rs.1,90,90,465/- under section 69 of the Act.
2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271F and 271(1)(c) of the Act, separately.
Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee for the reason of non-compliance by the Assessee.
Now, the Assessee has approached this Tribunal challenging the orders of the AO as well as NFAC by raising the following grounds of appeal:
1. That the Ld. Assessing Officer (herein referred to as the Ld. AO) as well as the Ld. Commissioner of Income Tax (Appeals), [here-in-after referred to as the Ld. CIT(A)] have erred in assessing the income at Rs.1,90,90,465/- and sustaining addition made by the Ld. Assessing Officer against the facts and circumstances of the case.
2. That the Ld. Lower authorities have erred in law as well as on facts of the case has erred in making additions amounting to Rs.1,90,90,465/- as unexplained money u/s 69A of the Income Tax Act, 1961 without appreciating the facts and circumstances of the case withdrawals made from the same bank account and acknowledging the explanation offered by the assessee.
3. That the Ld. CIT(A) has erred in law and on facts in upholding the addition made by the Ld. AO without appreciating the facts and explanations provided by the appellant in the statement of facts, and dealing in the merits of the case and written submissions filed before the Ld. CIT(A).
4. That the assessment order of the Ld. Assessing Officer dated 28.03.2022 and the Ld. CIT (Appeals), NFAC, having been passed without considering the withdrawals made from the bank account of Rs.1,88,77,890/- for business purposes, deserves to be set aside as the appellant was prevented with sufficient cause for not being able to make response to the notices sent by the department.
5. That the appellant craves leave to add to or amend the aforesaid grounds before disposal of the appeal.
During the course of hearing before us, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that both the authorities below have passed orders ex-parte qua the assessee. The Ld. A.R. further submitted that during the course of proceedings under section 148 of the Act, the assessee was working as a Driver in Saudi Arabia and his period of stay there was from 23.07.2019 to 12.04.2022. Since the assessee was not present in the Country during the relevant period, no compliance could be made before the AO. It was further submitted that the reason for non-compliance before the appellate authority was that the assessee was looking after his ailing parents. The Ld. A.R. submitted that there was reasonable cause for non-representation on behalf of the assessee before the authorities below. The Ld. A.R. prayed that in view of these facts, the matter may be restored to the file of the AO for deciding the matter afresh after providing reasonable opportunity of hearing to the assessee.
The Ld. Sr. D.R. had no objection to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R.
We have heard both the parties and have also perused the material on record. We find that there was non-compliance on behalf of the assessee before the NFAC as well as before the AO. However, looking into the facts of this case and the prayer of the Ld. A.R., we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, we restore this file to the Office of the Assessing Officer with the direction to provide an opportunity to the assessee to present his case and to produce the necessary evidences in support of the impugned transactions entered into by the assessee during the year under consideration. 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 the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 23/05/2025.