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Facts
The assessee, a cooperative society, was ex-parte before the Assessing Officer (AO) and the CIT(A) for the assessment year 2018-19. The AO made additions for cash withdrawals and contractual receipts, which were confirmed by the CIT(A). The assessee appealed to the ITAT, arguing that the CIT(A) passed an ex-parte order without affording sufficient opportunity.
Held
The Tribunal noted that the assessee was indeed ex-parte before the lower authorities and did not get an adequate opportunity to present its case. While acknowledging the assessee's responsibility to appear, the Tribunal considered it in the interest of justice to provide one more opportunity.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without considering the merits and affording sufficient opportunity to the assessee.
Sections Cited
69C, 115BBE, 271AAC, 270A, 234F
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’A” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;djvihyla-@ITA No. 890/JPR/2025
fu/kZkj.ko"kZ@AssessmentYear : 2018-19 Mawaliyo Ki Dhani DugdhUtpadak Mahila cuke The ITO Vs. Sahakari Samiti Ltd. Ward 7(2) Post: Machawa, Jhotwara, Jaipur- 303 706 Jaipur LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AAEAM 1735 D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Anoop Bhatia, CA jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 06/08/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 06 /08/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 22-01-2025, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2018-19 raising therein following grounds of appeal. ‘’1. On the Facts and Circumstances of the case and in the law the Ld. CIT(A) has grossly erred in passing the appellate order Ex-Parte without considering the facts on merits and affording sufficient opportunity of being heard. The impugned order is therefore violative of principles of natural justice and deserves to be quashed.
MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR 2. On the Facts and Circumstances of the case and in the law the Ld. CIT(A) has grossly erred in confirming the Total Income of assessee amounting to Rs. 1,59,42,246/-. Such Computation of Total income is Invalid as well as illogical in law and Deserves to be Quashed.
On the Facts and Circumstances of the case and the law the Ld. CIT(A) has grossly erred in upholding the addition u/s 69C of the Income Tax Act 1961, amounting to Rs. 1,56,71,000/- made by the Assessing Officer by treating the cash withdrawal from bank A/c of assessee as unexplained expenditure. Assessee prays that the transaction for sum equal to cash withdrawal being fully explainable deserves to be rolled back.
On facts and in circumstances of the case the Ld. CIT(A) has grossly erred in confirming the addition under the head income from other source amounting to Rs. 2,71,246/ made by the Assessing Officer by treating the contractual receipts in the assessee's bank account as unexplained amount. Assessee prays that such transaction being fully explainable as well as substantiated hence deserves to be deleted.’’ 2.1 During the course of hearing, the Bench noticed that there is delay of 66 days in filing the present appeal by the assessee for which the ld. AR of the assessee submitted that the ld CIT(A) dismissed the appeal of the assessee vide his order dated 22-01-2025 but the physical copy of ld. CIT(A)’s order was received by the assessee on 08-04-2025 and no order was served online. Hence, the assessee filed the appeal before ITAT is within the prescribed time limit and there is no delay as such in filing the appeal before ITAT. 2.2 On the other hand, the ld. DR did not controvert the issue stated on facts as submitted by the ld. AR of the assessee on the Bench and MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR submitted that the Bench may decide the issue as deem fit and proper in the interest of justice. 2.3 After hearing both the parties and perusing the materials available on record, the Bench noted that there is no delay in filing the appeal by the assessee as contended by the ld. AR of the assessee, if the same is considered with the date when served physically. Even otherwise since it was not served online, we considered the same on receipt of physical copy assessee filed and we considered the delay, if any, in the interest of justice 3.1 Apropos grounds of appeal of the assessee (supra), it is noticed that the ld CIT(A) has passed an ex-parte order in spite of providing multiple opportunities to assessee as the assessee had not complied with the notices issued during appellate proceedings and the assessee had not brought anything on record to rebut the findings of the AO. However, the ld. CIT(A)disposed off the appeal of the assessee on merit by dismissing the grounds of appeal raised before him. The relevant narration so made by the ld. CIT(A) at para 7.1.3. to 7.1.5 in his order to dismiss the appeal of the assessee are reproduced as under:- ‘’7.1.3. The Assessment Order, Grounds of Appeal, the Statement of Facts, Submission of the appellant and law in this regard is considered. During the course of appellate proceedings, despite several notices issued to the appellant at the e-mail address given by the appellant in Form 35 i.e. SOCTAX01@GMAIL.COM, no response was received from the appellant. Hence, the undersigned is left with no option but to pass the order based on MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR material available on record. From the statement of facts and grounds of appeal, it is seen that no detailed statement of facts has been submitted. The only thing that is being submitted by the appellant is that the statement would be submitted at the time of appellate proceedings and it also submitted the following statements, along with Form 35: a. Account of Milk purchase from Sundry Farmers from April to March, of Rs. 1,53,61,535/- b. Account of Milk sale to Jaipur from April to March of Rs. 1,55,17,215 and margin on the sale at 3% i.e. Rs. 4,65,516/- c. Account of amounts paid for BMC Chilling Charges from March to March of Rs. 2,63,863/-, d. Account of payment received from Jaipur Dairy, Cash withdrawals from HDFC Banks and cash payment made to Sundry Farmers from March to March. 7.1.4. As the appellant had submitted certain Accounts along with Form 35, hence, vide Notice dated 12.12.2024, the appellant was asked to submit whether these documents/evidences were Additional Evidences within the meaning of Rule 46A of Income Tax Rules, 1962. No Response was received with regard to the above Notice. In absence of any written submission, Petition for Additional Evidence etc.. mere submission of these unsigned/unverified Accounts along with Form 35 does not in any way help the case of the appellant and they do not prove anything in favour of the appellant. 7.1.5. From the Facts of the Case, it is clear that appellant had made cash withdrawals from HDFC Bank, to the tune of Rs. 1,56,71,000/- and as per the TDS Statement, had received contractual payments from Jaipur Zilla DudghUtpadakSahkari Sangh Ltd., amounting to Rs. 2.71,246/-. Also, as per the Assessment Order. it is seen that the ITR filed in response to Notice u/s 148 was an invalid ITR and hence, all the above transactions remained unverified. In view of the above discussion of facts and circumstances, I see no reason brought forth by the appellant in the appellate proceedings to cause interference in the Order as passed by the Ld. AO. Therefore, these grounds are dismissed.’’ 3.2 During the course of hearing, the ld.AR prayed that the assessee was ex-parte before the AO and before the ld. CIT(A). He further submitted that he may be provided one more chance to contest the case before the AO as MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR the assessee did not receive any communication from the AO to adduce the desired information and thus he made the addition of Rs.1,59,42,246/- (Rs.1,56,71,000/-[ cash withdrawal u/s 69C of the Act] plus Rs.2,71,246/- [contractual receipts].The narrations so made by the AO at para 6.4 to 7.3. are reproduced as under:- ‘’6.4 Variations proposed on the basis of inference drawn Since the assessee is a non-filer and has also not bothered to explain the transactions executed during the year, the aggregate value of Cash withdrawals of Rs.1,56,71,000/-is added to the total income of the assessee in accordance with the provisions of section 69C of the Income Tax Act, 1961 and will be taxed in accordance with the provisions of section 115BBE of the Income Tax Act, 1961.Penalty proceedings are initiated on the additions under section 271AAC (1) of the Income Tax Act, 1961. Further, the other earnings viz. contractual receipts aggregating to Rs.2,71,246/- is added as Income from Other Sources. Penalty proceedings under section 270A are initiated for under reporting of income in consequence of mis-reporting thereof. Penalty proceedings are also initiated under section 234F for failure to file the Return of Income.
7. The assessee was issued a Final Show Cause notice on 20.02.2023 granting a final opportunity to explain the transactions executed during the year under consideration. However, the assessee chose to abstain from making any submissions till date of the order. Under the circumstances, this office is left with no other avenue but to complete the assessment proceedings in line with the additions/ variations as per para 6.4, above. 7.1 In view of the persistent non co-operation on the part of the assessee, the aggregate value of Cash withdrawals of Rs. 1,56,71,000/- is added to the total income of the assessee in accordance with the provisions of section 69C of the Income Tax Act, 1961, to be taxed in accordance with the provisions of section 115BBE of the Income Tax Act, 1961. Penalty proceedings are initiated on the additions under section 271AAC (1) of the Income Tax Act, 1961. 7.2 Further, the other eamings viz. contractual receipts aggregating to Rs.2,71,246/- is added as Income from Other Sources. Penalty proceedings under section 270A are Initiated for under reporting of income in consequence of mis-reporting thereof. Penalty proceedings are also initiated under section 234F MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR of the Income Tax Act, 1961, on account of failure on the part of the assessee to file the Return of Income under section 139 and in response to 148 notice issued to the assessee, 7.3 The taxable income of the assessee is computed as under- Description Amount (in INR) Income as per Return of Income Nil filed (u/s 148) Income from other Sources: Aggregate value of cash 1,56,71,000 withdrawals u/s 69C of the I.T. Act, 1961 Add: Contractual receipts 2,71,246 Taxable Income 1,59,42,246 Net Taxable income rounded off 1,59,42,246 under section 288A of the Income Tax Act, 1961 3.3 On the other hand, the ld. DR did not controvert the submissions of the ld. AR of the assessee and did not object to the prayer of the assessee to set aside the matter to the file of the ld. AO 3.4 We have heard both the parties and perused the materials available on record. In this case it is noted that the AO made an addition of Rs.1,59,42,246/- which includes cash withdrawal of Rs.1,56,71,000/- u/s 69C of the Act and contractual receipts of Rs.2,71,246/-as the assessee was a non-filer of Income Tax Return before the Department and he did not bother to explain the transactions of cash withdrawal of Rs.1,56,71,000/- and contractual receipts of Rs.2,71,246/- . In first appeal, the ld CIT (A) has confirmed the action of the AO as there was no response from the side MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR of the assessee. Since it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A). Therefore, the assessee could not put forth its defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for since the assessee being the society for milk producer of ladies and therefore, the Bench considers the prayer of the assessee to give one more chance before the ld. AO as the lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative while proceedings. Thus, the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law.
MAWALIYO KI DHANI DUGDH UTPADAK MAHILA SAHAKARI SAMITI LTD VS ITO, WRD 7(2), JAIPUR 4.0 In the result, the appeal of the assesee is allowed for statistical purposes. Order pronounced in the open court on 06 /08/2025.