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Facts
The assessee, proprietor of Bushra Export House, filed a return declaring a total income of Rs.1,31,57,820/-. The Assessing Officer completed the assessment under Section 143(3) by making additions for foreign exchange fluctuations and capital introduced, totalling Rs.4,70,67,660/-. The assessee's appeal to the CIT(A) was dismissed ex-parte due to non-compliance.
Held
The Tribunal found that the CIT(A) erred by passing an ex-parte order without adjudicating the issues on merit and without providing a reasonable opportunity to the assessee. The Tribunal restored the case to the Assessing Officer for a fresh decision after granting an opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without providing reasonable opportunity to the assessee and adjudicating the issues on merit.
Sections Cited
143(3), 271(1)(c)
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 21.11.2023, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2014-15.
The brief facts of the case are that the assessee is proprietor of Bushra Export House, engaged in exports of Garments. The assessee filed his return of income for the year under consideration on 25.11.2014, declaring a total income of Rs.1,31,57,820/- in the status of individual. The case of the assessee was selected for scrutiny under CASS. During the course of assessment proceedings, the Assessing Officer (AO), from the Audit Report of the assessee, noticed that the assessee had shown Net Profit of Rs.69,96,656/- and Gross Profit of Rs.1,75,67,147/- on the turnover of Rs.32,49,62,029/-, during the year under consideration. After going through the books of account and replies submitted by the assessee, the AO completed the assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter called “the Act’), computing the income of the assessee as under:
Total income as per Return : Rs.1,31,57,820/- Addition of Foreign Gain Exchanges : Rs.3,11,63,636/- Addition on capital introduced : Rs.27,46,205/- Total income (rounded off) : Rs.4,70,67,660/- 2.1 The AO also initiated penalty proceedings under section 271(1)(c) of the Act, separately.
Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority. Later on, the case of the assessee was migrated to 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 order of the NFAC by raising the following grounds of appeal:
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the Ld. CIT-A) erred on facts and in law in dismissing the appeal of the appellant by passing an ex-parte order without adjudicating the issues involved in the appeal on merit by not providing reasonable opportunity to the appellant to have his say on the merit of the addition made by the Assessing Authority.
2. On the facts stated in the statement of facts, the Ld. CIT-A was not at all justified in dismissing the appeal of the appellant by passing an ex-parte order without adjudicating the merit of the case and hence the appellate order so passed by the Ld. CIT(A) deserves to be sent back to the CIT(A) with a direction to adjudicate the issue on merit after providing opportunity to the appellant 3. The Ld. CIT-A erred on facts and in law in confirming the addition of Rs.3,11,63,636/-made by the Ld. A.O. on account of alleged Foreign Exchange Fluctuation gain without appreciating the facts and the merit of the case. 4. The Ld. CIT-A erred on facts and in law in confirming the addition of Rs.27,46,205/-made by the Ld. A.O. on account of capital introduction into the business without appreciating the facts and the merit of the case that the capital so introduced into the business was made out of disclosed sources of income. 5. The appellant reserves his right to advance such other grounds before or at the time of hearing which he may consider fit and appropriate, for which he craves leaves to amend, alter or otherwise modify the grounds appearing with kind permission of the Hon'ble Bench.
During the course of hearing before us, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that the NFAC erred on facts and in law in dismissing the appeal of the assessee by passing an ex-parte order, without adjudicating the issues involved in the appeal of the assessee on merit and without providing reasonable opportunity of hearing to the assessee. The Ld. A.R. further submitted that certain details and documents relating to the transactions entered into by the assessee during the year under consideration could not be filed before the AO. The Ld. A.R. prayed that the matter may be restored to the file of the AO and if an opportunity is given, the assessee will produce all the relevant documents in support of his claim before the AO.
The Ld. CIT (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. 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 restore this file to the Office of the Assessing Officer with the direction to provide one opportunity to the assessee to present his case and 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 22/04/2025.