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Facts
The assessee's appeal against the CIT(A)'s order for AY 2017-18 was dismissed ex-parte for non-submission of written submissions. The assessee claimed that proper notice was not served, leading to an ex-parte order and violation of natural justice principles. The total addition made by the AO was Rs. 61,01,830/-.
Held
The Tribunal noted that while the assessee was lethargic in pursuing the case, a crucial notice from the CIT(A) was not sent to the AR's email, and there was a significant delay between notices. Observing a potential violation of natural justice, the Tribunal restored the matter to the AO for fresh adjudication.
Key Issues
Whether the dismissal of the assessee's appeal by the CIT(A) without proper service of notice and opportunity of hearing violated principles of natural justice, warranting restoration to the Assessing Officer.
Sections Cited
144, 250, 69A, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,’’B” JAIPUR
ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 26.09.2024, National Faceless Appeal Centre, Delhi [ for short (NFAC) / CIT(A) ] for the assessment year 2017-18 in the matter of Section 144 by raising therein following grounds of appeal. ‘’1. That the ld CIT(A) has erred in law as well as in facts of the case in dismissing the appeal without ensuring proper service appeal fixation notice.
2. That both the lower authorities have erred in considering / holding genuine and explained cash deposit emanating from cash sales and realization from GOVIND SINGH VS ITO, WARD 2(3), JAIPUR debtors as unexplained and thereby made addition to the tune of Rs.32,67,500/- as unexplained money within the meaning of Section 69A of the Income Tax Act, 1961.
3. That both the lower authorities have erred in considering /holding genuine and explained addition to capital account as unexplained and thereby made addition of Rs.3,69,532/- u/s 68 of the I.T.Act, 1961.
4. That both the lower authorities have erred in law as well as in facts of the case in considering/ holding balance of sundry creditors unverifiable and made addition of Rs.24,17,849/-.
5. That both the lower authorities have erred in law as well as in facts of the case in making lump sum disallowance of Rs.46,952/- from expenses debited to Profit & Loss Account.
6. That both the lower authorities have erred in law as well as in facts of the case in not allowing set off of loss of Rs.7,82,903.83 declared in Audited Profit and Loss Account against the addition made to income under Business head.
That both the lower authorities have erred in law as well as in facts of the case in not affording sufficient opportunity of being heard, hence violated the principles of Audit Alteram Partem.’’ 2.1 Apropos grounds of appeal
of the assessee, it is noticed that the ld.CIT(A) has confirmed the action of the AO by dismissing the appeal of the assessee giving therein following observations : ‘’2. The case was taken up for hearing and notices u/s 250 of the Act were issued on 22-12-2020, 22-01-2021, 22-07-2021 and 19-06-2024 fixing the case for furnishing written submission. In response to these notices the appellant has not submitted written submission. In such condition, I have no option but to decide the case on merits on the basis of records available with this office.
3. The present appeal is against the order u/s 144 of the I.T. Act dated 26- 12-2019 for the assessment year 2017-18. I have carefully perused the grounds of appeal and the order of the AO already available on record. The appellant has failed to support the grounds raised in this appeal. There is also no any supporting evidence in favour of the appellant. Since, in the instant case, the appellant has not been able to show that the making total addition of Rs.61,01,830/- by the AO was arbitrary and without any basis. I find no reason to interfere with the decision of the AO. Hence, appeal filed by the appellant is dismissed.
GOVIND SINGH VS ITO, WARD 2(3), JAIPUR As such the appeal of the appellant is dismissed’’ 4. 2.2 At the outset of hearing of the appeal, the ld. AR of the assessee submitted that no notice was served upon the ld. AR assessee whose email id was shown in the appeal form no. 35 filed by the assessee by the Department and thus the assessee was unable to argue the case before the ld. CIT(A). Even the assessee could not submit the documents before the ld. AO and therefore, ld. AO also passed an order ex-parte. Thus, the demand was fastened to the assessee without being heard to the assessee and the same is against the principles of natural justice. Hence, in such a situation, the ld. AR of the assessee prays that one more chance should be provided to the assessee to contest the case before the AO by submitting the documents as well as evidences relating to the addition made by him amounting to Rs.61,01,830/- under different heads as mentioned in the assessment order dated 26-12-2019. 2.3 On the other hand, the ld. DR supported the orders of the lower authorities and objected to the arguments as made by the ld. AR of the assessee stating that the assessee could not provide the details to the AO and before the ld. CIT(A) he did not attend and support the contention by filling the evidence and therefore, she submitted the appeal of the assessee is required to be dismissed.
GOVIND SINGH VS ITO, WARD 2(3), JAIPUR 2.4 We have heard both the parties and perused the orders of the lower authorities and found that nothing was advanced by the ld AR of the assessee to safeguard the interest of the assessee before the AO and ld CIT(A). Thus, the AO made an addition of Rs.61,01,833/- in the hands of the assessee and the ld. CIT(A) confirmed the action of the AO. 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 defense at both the stage. 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 and unserious in pursuing his case.But looking to the fact that on the last date given by the ld. CIT(A) the email of notice was not sent on the email id of the AR of the assessee and that last notice was issued after a gap of 2 years of the last notice so issued by the ld. CIT(A). However, we are of the view that 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. Considering that aspect of the matter that the order passed by the ld. CIT(A) was against the principles of natural justice and hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of GOVIND SINGH VS ITO, WARD 2(3), JAIPUR 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. 2.5 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. 3.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 13 /02/2025.
Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 13/02/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shri Govind Singh, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward 2 (3), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No.1274/JP/2024) vkns'kkuqlkj@ By order,
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