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Facts
The assessee, a proprietor of a trading business, did not file an income tax return for Assessment Year 2017-18. The Income Tax Department received information about cash deposits of Rs. 13,58,000/- made by the assessee during the demonetization period. Despite statutory notices and summons, the assessee did not respond adequately.
Held
The Tribunal condoned the delay in filing the appeal and, considering that the authorities below passed ex-parte orders, restored the case to the Assessing Officer (AO) to provide the assessee with one last opportunity to present their case and necessary evidence.
Key Issues
Whether the assessee should be granted an opportunity to present their case before the AO, especially when the initial orders were passed ex-parte due to non-compliance and delay in filing the appeal.
Sections Cited
131, 142(1), 44AD, 144, 115BBE, 271AAC, 270A, 271F, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Dinesh Kumar Gupta v. ITO-2(1) 69/192, Chitvapur Lucknow Station Road, Lucknow TAN/PAN:AKCPG5937A (Appellant) (Respondent) Appellant by: Shri Shailendra Mishra, Advocate Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 22 01 2025 Date of pronouncement: 23 01 2025 O R D E R
This appeal has been preferred by the assessee against the order dated 02.07.2024, 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 the proprietor of M/s Shri Bala Ji Traders situated at Akbarganj Rudauli, Faizabad. The assessee did not file the return of income for the year under consideration. The Income Tax Department was in possession of information received through Income Tax Business Application (ITBA) that the assessee had deposited cash amounting to Rs.13,58,000/- during the demonetization period (from 08.11.2016 to 31.03.2016). The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to furnish the source of aforementioned cash deposits and also to file the return of income for the year under consideration. However, the assessee did not respond to the notices issued by the AO. Thereafter, the AO issued summons under section 131 of the Income Tax Act, 1961 (hereinafter called “the Act’) and questionnaire along with notice under section 142(1) of the Act. In compliance to which, the assessee attended in person and his statement was recorded. In the statement recorded under section 131 of the Act, the assessee admitted to have deposited Rs.13,58,000/- in various Bank Accounts. The assessee also admitted that he had gross receipts of Rs.52,82,566/- and that no return of income had been filed for the year under consideration although returns had been filed for the preceding years and succeeding year as well. Since there was no further compliance by the assessee, the AO proceeded to complete the assessment ex-parte and treated the amount of Rs.13,58,000/- as unexplained cash credit and added the same to the income of the assessee.
2.1 The AO also worked out the income of the assessee from business on estimate basis @8% of the total turnover of Rs.52,82,566/- by applying the provisions of section 44AD of the Act, which came to Rs.4,22,605/-.
2.2 The AO, accordingly, completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.17,80,605/-, after making the aforesaid additions.
2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271AAC, 270A and 271F of the Act separately.
Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. The appeal was migrated to NFAC, which dismissed the appeal of the assessee 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. That the learned Commissioner of Income-tax (Appeals), NFAC has erred in law and on facts in arbitrarily upholding the addition of Rs.13,58,000 which has been casually made by Id. A.O. as unexplained cash credit u/s 69A resulting in levy of tax u/s 115BBE of the I.T. Act, 1961, failing thereby to treat the amount as part of business turnover of Rs.52,82,566 assessed u/s 44 AD of the I.T. Act. The addition of Rs.13,58,000 is not justified at all and liable to be deleted as such.
2. That the learned Commissioner of Income-tax (Appeals), NFAC has erred in law and on facts in failing to consider that the Id. A.O. has not allowed adequate opportunity of being heard to the assessee and passed the impugned assessment order u/s 144 of the I.T. Act, 1961, without placing on record any material in support the aforesaid addition which was made on the basis of presumption and surmises only.
3. That the appellant craves permission for amending the aforesaid grounds of appeal and / or for raising fresh grounds of appeal.
The Ld. Authorized Representative for the assessee submitted that there is a delay of 89 days in filing the appeal before the Tribunal. He submitted that the assessee had filed an application dated 02.12.2024 for condonation of delay, duly supported by an Affidavit and Medical Certificate, stating therein that the assessee was ill during the relevant period. Therefore, the appeal could not be filed within the stipulated period. He prayed that the delay be kindly condoned.
The Ld. Sr. D.R. had no objection to the delay being condoned.
In view of the prayer made by the Assessee, duly supported by Affidavit, Medical Certificate and no objection by the Ld. Sr. D.R., I condone the delay in filing of the appeal and admit the appeal for hearing.
The Ld. Authorized Representative for the assessee submitted before me that the both the authorities below have passed ex-parte orders qua the assessee. He prayed that the appeal may be restored to the Office of the AO, as the AO would be in a better position to examine the various evidences with regard to the cash deposits made in various bank accounts of the assessee, which the assessee would like to bring on record.
The Ld. Sr. D.R. had no objection to the restoration of appeal as requested by the ld. A.R.
I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present his case along with necessary evidences. I 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 AO 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 23/01/2025.