Loading judgment…
Facts
The assessee, a charitable society, was under scrutiny as cash deposits of Rs.7,76,89,268/- were made during demonetization, while only Rs.5,64,72,685/- was shown as income. The case was reopened under Section 147 and 148, leading to an addition of Rs.2,12,16,583/- as unexplained income.
Held
The Tribunal held that the assessee deserves another opportunity to present its case. Therefore, the appeal is restored to the NFAC for a hearing on merits.
Key Issues
Whether the NFAC was justified in dismissing the appeal ex-parte without giving adequate opportunity to the assessee to be heard.
Sections Cited
147, 148, 142(1), 144, 144B, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
This appeal has been preferred by the assessee against the order dated 31.07.2024, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017-18.
The brief facts of the case are that the assessee is a charitable society. It was noticed by the Income Tax Department that the assessee-society had made cash deposits to the tune of Rs.7,76,89,268/- during the demonetization period Whereas, the assessee had shown only Rs.5,64,72,685/- under Aggregate of income. Since the difference of Rs.2,12,16,583/- had not been shown by the assessee in the return of income for the year under consideration, the case of the assessee-society was reopened under section 147 of the Act by issuing notice under section 148 of the Act. The assessee did not file any return of income in response to notice under section 148 of the Act, but, filed a reply, vide dated 28.12.2021, in response to notice under section 142(1) of the Act. The Assessing Officer (AO), after considering the reply of the assessee, completed the assessment under section 147 read with sections 144 and 144B of the Act, assessing the total income of the assessee at Rs.2,12,16,580/-, after making an addition of Rs.2,12,16,583/- as unexplained/undisclosed income of the assessee.
2.1 The AO also initiated penalty proceedings under section 270A of the Act, separately.
Aggrieved, the Assessee preferred an appeal before 3. the NFAC. The appeal of the Assessee came to be dismissed in limine by passing an order ex-parte qua the Assessee.
Now, the assessee has approached this Tribunal challenging the dismissal of its appeal by the NFAC by raising the following grounds of appeal:
1. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing the order which is illegal, improper and against the principles of natural justice.
2. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing an ex-parte order without giving adequate opportunity of being heard.
The Commissioner of Income Tax (Appeal) has erred in law and on facts in confirming the addition of Rs.2,12,16,583/- made by Ld. Assessing Officer treating it as undisclosed income. 4. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing appellate order which is contrary to the facts and law. 5. The appellant craves leave to add, amend, alter or withdraw any grounds of appeal
or raise any new ground appeal during the pendency of appeal.
5. The ld. Authorized Representative for the Assessee submitted before us that the NFAC was not justified in dismissing the appeal of the Assessee by passing an order ex- parte qua the Assessee. The ld. AR prayed that the Assessee’s appeal may be restored to the file of the NFAC for the purpose of adjudication on merits.
Since the order passed by NFAC was an ex-parte order, the ld. Senior D.R. had no objection to the restoration of appeal to the NFAC.
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 its case and, therefore, we restore this file to the Office of the NFAC with the direction to hear the appeal on merits. We also caution the Assessee to fully comply with the notices and 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 order 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 22/04/2025.