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Facts
The assessee filed appeals against orders of the CIT(A) for AY 2012-13 and 2014-15. The AO made additions on account of cash deposits in bank accounts as the assessee failed to provide requisite information/documents and did not comply with show cause notices, leading to ex-parte assessment orders. The CIT(A) confirmed these additions.
Held
The Tribunal noted that the assessee was ex-parte before the lower authorities and could not present his defense. While the assessee was lethargic, the Tribunal restored the matters to the AO to provide one more opportunity for hearing and decision on merits, allowing the appeals for statistical purposes.
Key Issues
Whether the ex-parte assessment orders and additions made due to non-compliance with notices, without affording adequate opportunity, are sustainable? Whether a second opportunity should be granted to the assessee to present his case?
Sections Cited
147, 148, 144, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1298 & 1299/JPR/2024
ORDER PER: DR. S. SEETHALAKSHMI, J.M. Both these appeals have been filed by the assessee against two different orders of the ld. CIT(A) dated 28-08-2024 & 29-08-2024, National Faceless Appeal Centre, Delhi hereinafter referred to as (NFAC) ] for the assessment years 2012-13 and 2014-15 respectively, raising therein following grounds of appeal.
A.Y. 2012-13 1. The impugned assessment order dated 16-12-2019 passed u/s 147/144 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same deserves to be fully quashed.
2. The action taken u/s 147 r/w 148 is challenged as being void ab-initio and without proper jurisdiction. It is urged that the very foundation of the assessment is flawed and, therefore, the said action, as well as the subsequent assessment framed u/s 144/147 dated 16.12.2019, be quashed.
The ld. AO erred in law as well as on the facts of the case in framing the assessment u/s 144 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed.
4. Rs.22,29,900/-: The ld. CIT(A) made an error in both law and fact by upholding the addition of Rs.22,29,900/- related to cash deposits in the bank u/s 68, as determined by the AO. The addition so made and confirmed being contrary to the provisions of law and facts, kindly be allowed in full.
5. The ld. AO erred in law as well as on the facts of the case in charging interest as per the 1.T.Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full.
- A.Y. 2014-15 1. The impugned assessment order dated 16-12-2019 passed u/s 147/144 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same deserves to be fully quashed.
The action taken u/s 147 r/w 148 is challenged as being void ab-initio and without proper jurisdiction. It is urged that the very foundation of the assessment is flawed and, therefore, the said action, as well as the subsequent assessment framed u/s 144/147 dated 16.12.2019, be quashed.
3. The Id. AO erred in law as well as on the facts of the case in framing the assessment w/s 144 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The
Rs.45,67,040/-: The Id. CIT(A) made an error in both law and fact by upholding the addition of Rs. 45,67,040/- related to cash deposits in the bank u/s 68, as determined by the AO. The addition so made and confirmed being contrary to the provisions of law and facts, kindly be allowed in full.
The Id. AO erred in law as well as on the facts of the case in charging interest as per the IT Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full.
2.1 First of all, we take up the appeal of the assessee relating to assessment year 2012-13 for adjudication hereunder wherein brief facts of the case as per assessment order u/s 144 r.w.s. 147 of the Act dated 16-12-2019 are that the Assessee Shri Tosif Khan s/o Shri Afsar Khan , Salvad Road, Suket, Kota had not filed his original income tax return for the A.Y. 2012-13. As per information on record, it was noticed that the assessee had deposited cash of Rs.22,29,900/- in his bank account which is jointly held with Shri Afsar Khan. On this basis, the AO formed a belief that income chargeable to tax had escaped assessment within the meaning of Section 147 of the Act. In this case, it is noted that the AO requested the assessee to file his submission on or before 6-12-2019 vide show cause notice dated 2-12-2019 which was served upon the assesee through online mode and also via speed post but the assessee failed to comply with this show cause notice. Thus & 1299/JP/2024 SHRI TOSIF KHAN VS ITO, WARD 1(3), KOTA the AO made an addition in the hands of the assessee amounting to Rs.22,29,900/- vide observing at para 7 of his order as under:- ‘’7. Further, the assessee was given a final opportunity vide this office show cause notice u/s 144 of the I.T. Act, 1961 dated 6-12-2019 which was served upon the assessee through online mode and also manually served upon the assessee on 6-12- 2019. Vide said show cause notice, the assessee was requested to submit requisite information/documents on or before 11-12- 2019 and if fail, the entire cash deposit of Rs.22,29,900/- would be treated as his undisclosed income for A.Y. 2012-13 and assessment would be completed u/s 144 of the I.T. Act, 1961 on ex-parte basis. The assessee has again failed to comply with this show cause notice u/s 144 of the I.T. Act, 1961 also.’’ 2.2 Being aggrieved, the assessee carried the matter before the ld. CIT(A) who has confirmed the action of the AO by passing an ex-parte order. The relevant narration as made in para 5 at page 3 of his order is reproduced as under:- ‘’5. Findings & determination …….. During appellate proceedings, despite of several opportunities provided to appellant, there has been no response by the appellant. In considered opinion of this appeal, the appellant hasn’t discharged the onus cast upon him by exercising the source of the cash deposits. For want of explanation, these deposits can be charged as deemed income of the appellant. I therefore agree with the findings of the Assessing Officer and hold that the appellant is unable to substantiate his grounds raised and is not able to controvert the assessment order. The order by the Assessing Officer is therefore confirmed.
2.3 During the course of hearing, the ld. AR of the of the assessee submitted that one more chance may be given to the assessee to submit the informatons / document as desired by the AO so that the issue in question could be resolved and also prayed to restore the matter to the file of the AO for afresh decision. 2.4 On the other hand, the ld. DR supported the orders of the lower authorities. 2.5 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the AO made the addition in the hands of the assessee on the ground the assessee did not submit requisite information / documents as to the cash deposit of Rs.22,29,900/- in his bank account. The ld. CIT(A) has also confirmed the action of the AO by observing same reasoning. However, the ld. AR of the assessee prayed that one more chance may be given to submit all the documents in order to settle the dispute in question. The Bench considers the prayer of the ld. AR of the assessee and feels that it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic. However, the Bench is of the view that & 1299/JP/2024 SHRI TOSIF KHAN VS ITO, WARD 1(3), KOTA 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 during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 2.6. 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. Thus the appeal of the assessee is allowed for statistical purposes. 3.1 Now we take up the appeal of the assessee for the assessment year 2014-15 wherein the AO made an addition of Rs.43,56,600/- in the hands of the assessee by observing as under:- ‘’6. Further, the assessee was given a final opportunity vide this office show cause notice u/s 144 of the I.T. Act, 1961 dated 6-12-2019 which was served upon the assessee through online mode and also manually served upon the assessee on 6-12- 2019. Vide said show cause notice, the assessee was requested to submit requisite information/documents on or before 11-12- 2019 and if fail, the entire cash deposit of Rs.43,56,600/- would be treated as his undisclosed income for A.Y. 2014-15 and assessment would be completed u/s 144 of the I.T. Act, 1961 on ex-parte basis. The assessee has again failed to comply with this show cause notice u/s 144 of the I.T. Act, 1961 also.’’ 3.2 Being aggrieved, the assessee carried the matter before the ld. CIT(A) who has confirmed the action of the AO by passing an ex-parte order. The relevant narration as made in para 5 at page 3 of his order is reproduced as under:- ‘’5. Findings & determination …….. During appellate proceedings, despite of several opportunities provided to appellant, there has been no response by the appellant. I agree with the finding of the Assessing Officer and hold that the appellant is unable to substantiate his grounds raised and is not able to controvert the assessment order. The order by the Assessing Officer is therefore confirmed. The appellant has not been able to defend his grounds. Hence, grounds raised are dismissed.’’ 3.3 After hearing both the parties and perusing the materials available on record, the Bench feels to restore the matter to the file of the AO for afresh decision being the similar matter and the decision taken in . Thus the appeal of the assessee is allowed for statistical purposes.
& 1299/JP/2024 SHRI TOSIF KHAN VS ITO, WARD 1(3), KOTA 4. In the result, both the appeals of the assesee are allowed for statistical purposes as indicated hereinabove. Order pronounced in the open Court on 26 /03/2025.