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Facts
The assessee's case for AY 2010-11 was reopened under Section 147 due to a Rs.45,30,000/- cash deposit in his bank account in FY 2009-10. Despite a Section 148 notice, no return was filed, and no explanation for the deposit was provided, leading to an ex-parte assessment under Section 144 by the AO, confirming the addition under Section 68. The CIT(A) also dismissed the assessee's appeal ex-parte. The appeal to the Tribunal was delayed by 71 days, for which condonation was granted due to the accountant leaving and the assessee's terminal illness.
Held
The Tribunal noted that both the AO and CIT(A) passed ex-parte orders without providing proper opportunity. Upholding the principles of natural justice, the Tribunal set aside the impugned orders. The matter was restored to the Assessing Officer for a fresh assessment, giving the assessee an effective opportunity to represent his case and explain the source of the cash deposit.
Key Issues
Whether the ex-parte assessment and appellate orders were valid without providing proper opportunity to the assessee, and if the addition under Section 68 was justified when the assessee claimed no notice under Section 148 was received.
Sections Cited
68, 142(1), 144, 147, 148
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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 20.10.2023 pertaining to the assessment year 2010-11. The assessee has raised the following grounds of appeal: -
1. That the Ld. CIT(A),NFAC has erred in law and on facts and circumstances of the case in deciding and dismissing the appeal filed by the appellant ex-parte.
2. That the Ld. CIT(A),NFAC has not considered the evidence placed on record by the appellant during the course of assessment proceedings in respect of deposit of Rs.45,30,000/- in the bank account, and he is wrong in confirming the addition made by the Assessing Officer under section 68 of the Income-tax Act, 1961.
3. That the Ld. CIT(A), NFAC is not justified in confirming the addition in respect of bank deposit made by the appellant under section 68 of the Income-tax Act, 1961 on the facts and circumstances of the case which is contrary to the provisions of the Act.
4. That the Ld. CIT(A), NFAC has failed to appreciate that the Assessing Officer has wrongly proceeded to add the sum of Rs.45,30,000/- in the bank account of the appellant to be a cash credit within the meaning of 5. That no proper opportunity has been allowed to the appellant before passing the order ex-parte by the Ld. CIT(A), NFAC confirming the addition made by the Assessing Officer of Rs.45,30,000/- under section 68 of the Income-tax Act, 1961.
6. That the Ld. CIT(A), NFAC has erred in law and on facts and circumstances of the case in confirming the addition made by the Assessing Officer in the order passed under section 144 of the Income-tax Act, 1961, more particularly, when the appellant had filed the return in response to the notice under section 148 of the Income-tax Act, 1961 and has also replied to the queries made under section 142(1) by the Assessing Officer.
7. That the entire assessment framed is void ab initio and bad in law, in as much as, no valid notice under section 148 of the Income-tax Act, 1961 was served on the appellant, which renders the entire subsequent proceedings as nullity. 8. That the appellant craves leave to add, alter, amend or withdraw any or all grounds of appeal
at any time before or during the course of the hearing.”
2. It is reported by the Registry that the appeal is barred by limitation for 71 days. There is a delay in filing the present appeal, the assessee has filed an application seeking condonation of delay. The reasons for condoning the delay is stated that firstly, the accountant who was handling the accounts of the assessee left his services without any intimation. Further, the assessee himself was indisposed and was terminally ill. The Ld. Counsel for the assessee reiterated the submissions made in the affidavit filed in support of the condonation of delay. It is stated that the delay in filing was not deliberate but caused due to reasons beyond his control, he prayed for condonation of delay.
On the other hand, the Ld. DR opposed the submissions. He contended that the reasons stated by the assessee are not sufficient for condoning the delay.
We have heard rival submissions and perused the materials available on record. It is stated by the assessee that he Page 3 of 5 was terminally ill and also the accountant who was looking after the affairs of the assessee left job. It is emphatically stated that there is a reasonable cause for condoning the delay in the matter. It is stated in the Form no. 36 that the impugned order was communicated on 20.10.2023 to the assessee, the date when the order was passed and the appeal is barred by 71 days. We, therefore, considering the facts placed before us, are of the view that where the assessee pleaded about his terminal illness, it would be a fit case for adopting a liberal approach. Hence, the delay caused in the filing of instant appeal is hereby condone the delay and admit the appeal for hearing.
The facts giving rise to the present appeal are that the case was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter referred as to the “Act”) and a notice u/s 148 of the Act was issued on 30.03.2017 on the basis of that the assessee during the financial year 2009-10 had deposited cash in his bank account amounting to Rs.45,30,000/-. It is observed by the Assessing Officer that in response to the notice u/s 148 of the Act, no return income was filed by the assessee. It is further recorded by the Assessing Officer that despite various opportunities to the assessee. The assessee did not file any explanation regarding the source of cash deposited in the bank account, therefore, he proceeded to make assessment exparte to the assessee u/s 144 of the Act and he assessed income at Rs.63,48,200/-. Aggrieved by this, the assessee preferred an appeal before the Ld. CIT(A), before Ld. CIT(A) also, there was no representation on behalf of the assessee, therefore the appeal was dismissed exparte to the assessee. Now, the assessee is in appeal before this Tribunal.
Page 4 of 5 6. At the outset, the Ld. Counsel for the assessee in respect of the multiple grounds taken by the assessee submitted that no proper and effective opportunity was provided to the assessee. The assessee did not receive any notice u/s 148 of the Act and the assessee was deprived of valuable legal right for representing his case. He further stated that looking to the facts and circumstances of the present case if assessee is given one more opportunity, he would explain the source of cash deposited in his bank account.
On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the orders of the lower authorities.
We have heard the rival contention and perused the materials available on record, we find that the Ld. CIT(A) as well as the Assessing Officer have passed the impugned orders exparte to the assessee. It is the contention of the assessee that no notice as issued u/s 148 of the Act was received by him. It is further submitted that the assessee has plausible explanation regarding cash deposited in the bank account. Therefore, looking to the totality of the facts and the material placed before us, we are of the considered view that to sub-serve the principles of natural justice, assessee should be given proper opportunity to represent his case effectively. We hereby set aside the impugned orders and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving proper opportunity to the assessee. Grounds of appeal of the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 23/01/2025.