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Facts
The assessee failed to file the return of income for AY 2018-19. The AO received information of substantial cash deposits and withdrawals in the assessee's bank account, leading to a best judgment assessment under section 147. A penalty was also levied under section 271AAC(1) for delay in filing appeals before the NFAC.
Held
The Tribunal held that the assessee deserves one more opportunity to present their case before the NFAC. The appeals were restored to the NFAC for fresh adjudication after the assessee explains the delay and the NFAC condones it.
Key Issues
Whether the NFAC was justified in dismissing the appeals due to delay without providing a reasonable opportunity to explain the delay, and whether the appeals should be restored for adjudication on merits.
Sections Cited
147, 144, 144B, 69A, 69C, 115BBE, 234A, 234B, 271AAC(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
1. These appeals have been preferred by the assessee against separate orders, both dated 01.10.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2018-19.
The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash deposits to the tune of Rs.3,40,000/- and cash withdrawals to the tune of Rs.1,48,76,000/- in his Bank Account No.177911100000955 maintained with Andhra Bank during the year under consideration. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to explain the source of cash deposits and withdrawals. Since there was no compliance from the side of the assessee, the AO passed order dated 21.02.2023 as best judgment assessment, under section 147 read with 144 & 144B of the Act, computing the income of the assessee as under:
Income as per return : Nil (no return was filed by the assessee) Addition u/s.69A of the Act : Rs.3,40,000/- Addition u/s.69C of the Act : Rs.1,48,76,000/- Addition of contractual receipts : Rs.15,500/- Total income : Rs.1,52,31,500/- 2.1 The AO also passed a separate order, dated 14.08.2023 under section 271AAC(1) of the Act, imposing a penalty of Rs.11,75,436/-
Aggrieved, the Assessee preferred appeals before the NFAC, which dismissed the appeals of the assessee for the reason of there being delay of 306 days and 139 days in filing of the appeals before the NFAC against the quantum addition and against the penalty order respectively.
4. Now, the assessee has approached this Tribunal challenging the dismissal of his appeals by the NFAC by raising the following grounds of appeals:
1. On facts and circumstances of the case, the order passed by Ld. AO is bad in law and without jurisdiction and needs be quashed as the same is passed before service of notice u/s 148.
2. The Ld. Authorities below have erred in law as well as on facts in making and confirming the addition of Rs. 3,40,000/- u/s 69A of the Income Tax Act.
3. The Ld. Authorities below have erred in law as well as on facts in making and confirming the addition of Rs. 1,48,76,000/- u/s 69C of the Income Tax Act.
4. The Ld. Authorities below have erred in law as well as on facts in making the addition of Rs.15,500/- as Income from other sources.
5. That Ld. AO has made the above addition & disallowance arbitrarily, unjustly and are unwarranted & uncalled for and too high in the present case.
6. The Ld. AO has erred in law as well as on facts in taxing the alleged addition u/s 115BBE.
7. The order passed by the Ld. Authorities below is against principles of natural justice as the order is passed without reasonable opportunity of being heard and treating appeal as not admitted.
8. On the basis of facts and circumstances of the case, Ld. AO has erred both in law as well as on facts in charging interest under section 234A and 234B of the of the 1.T. Act 1961.
The appellant reserves the right to add, amend and delete any of the above grounds of appeal.
GROUNDS IN ITA NO.784/LKW/2024:
On facts and circumstances of the case, the order passed by Ld AO is bad in law and needs be quashed.
2. On facts and circumstances of the case, the order passed by Ld AO u/s 271AAC(1) is bad in law and without jurisdiction and needs be quashed as the same is passed before service of notice u/s 271AAC(1).
3. The Ld. Authorities below have erred in law as well as on facts in levying the penalty u/s 271AAC(1) of Rs.11,75,436/-.
The order passed by the Ld. Authorities below is against principles of natural justice as the order is passed without reasonable opportunity of being heard and treating appeal as not admitted.
5. The appellant reserves the right to add, amend and delete any of the above grounds of appeal.
None was present for the assessee when the appeals were called out for hearing. However, looking into the facts of the case, we proceed to adjudicate the appeals ex-parte qua the assessee.
The ld. D.R. had no objection to the restoration of appeals to the NFAC.
We have heard the Ld. D.R. and have also perused the material on record. Looking into the facts of these cases, we are of the considered view that the assessee deserves one more opportunity to present his cases and, therefore, in the interest of substantial justice, we restore these files to the Office of the NFAC with the direction to give an opportunity to the assessee to explain the delay in filing the appeals and thereafter, if the delay is properly explained, condone the delay and decide the appeals on merits after providing an opportunity to the assessee to present his cases. We also caution the assessee to fully comply with the directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the orders in accordance with law, based on 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 22/05/2025.