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Facts
The assessee, Neeraj Gupta, had a substantial cash credit and commission income in AY 2017-18 but failed to file a return of income. The Assessing Officer (AO) issued notices under Section 148 and 142(1) of the Income Tax Act, but the assessee provided only a brief explanation without furnishing supporting documents. The AO completed the assessment ex-parte.
Held
The Tribunal acknowledged the assessee's lack of familiarity with tax proceedings and the challenges faced in providing documentation. Therefore, to ensure substantial justice, the Tribunal restored the appeal to the AO, granting the assessee one last opportunity to present their case and evidence.
Key Issues
Whether the assessment order passed ex-parte without considering the assessee's circumstances and lack of familiarity with tax procedures is valid, and if the assessee should be granted another opportunity to present their case.
Sections Cited
148, 142(1), 147, 144B, 69A, 115BBE, 271F, 271AAC(1), 272A(1)(d)
AI-generated summary — verify with the full judgment below
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 27.08.2024, passed by the National Faceless appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.
The brief facts of the case are that the Income Tax Department was in possession of information through Income Tax Business Application (ITBA) that there was a total cash credit of Rs.30,14,25,000/- in the Current Account No.115111007055 of the assessee, maintained with Allahabad Bank, Vill. Mohammad Purkala, Pomaksudpur Block, Pasgawan, Lakhimpur Kheri during the year under consideration and that the assessee had also received an amount of Rs.1,02,000/- as Commission or Brokerage. The assessee had not filed the return of income for the year under consideration. The Assessing Officer (AO) issued notice under section 148 of the Income Tax Act, 1961 (hereinafter called “the Act’), requiring the assessee to file the return of income for the year under consideration. However, the assessee did not file any return of income. The AO, thereafter, issued notice under section 142(1) of the Act, requiring the assessee to furnish the details relating to the transactions entered into by the assessee during the year under consideration with supporting evidence. However, the assessee except filing a reply online on 24.12.2021, stating that "Dear Sir/Mam, I, Neeraj Gupta working as banking corospondent in Indian Bank Allahabad from 2016. I missed my ITR filing in 2017-18 because I don't have the proper knowledge about it. I request you to please provide me the best solution by which I could solve my problem. Thank you", no details/documents were furnished. The AO completed the assessment under section 147 r.w.s. 144 and 144B of the Act, computing the income of the assessee as under:
Returned income (no returned filed) : Rs.Nil Addition u/s 69A of the Act : Rs.30,14,25,000/- Addition of Commission/Brokerage : Rs.1,02,000/-
Total assessed income : Rs.30,15,27,000/- 2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271F, 271AAC(1) and 272A(1)(d) of the Act, separately.
Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority. The appeal was migrated to the NFAC, which dismissed the appeal of the assessee for the reason of there being a delay of 143 days in filing of the appeal before the Ld. First Appellate Authority.
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:
That the Id. CIT(A) erred on facts and in law in dismissing the appeal in limine without considering the grounds of appeal
which is against the principle of natural justice.
2. That the Id. A.O. erred on facts and in law in passing ex- parte order because of facts assessee was not aware with the Income Tax matters and could not be able give any explanation before the Id. A.O. and the matter may kindly be remanded to the Id. A.O. to decide afresh.
3. That the basis of initiation of re-assessment proceeding by issue of notice u/s148 of the Income Tax Act, 1961, its continuation and culmination vide order u/s 147/144B of the Income Tax Act, 1961 dated 26-03-2022 is bad in law and liable to be cancelled. 4 That the CIT (Appeals) erred on facts and in law in confirming the addition of Rs.30,14,25,000/- as unexplained money u/s 69A of the Income Tax Act, 1961, which is contrary to the facts and circumstances of the case.
During the course of hearing before us, the Ld. A.R. submitted that the assessee was not well conversant with the income tax proceedings and, therefore, no proper compliance could be made before the AO. He 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 if an opportunity is given, the assessee will produce all the relevant documents in support of his claim before the AO.
The Ld. Senior 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 last opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO 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 AO 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.