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Facts
The assessee, a charitable entity, appealed against an assessment order for AY 2018-19, which the AO passed as an ex-parte best judgment assessment u/s 144, despite citing Section 143(3). Both the AO and CIT(A) noted the assessee's habitual non-compliance, failure to respond to multiple notices, and repeated requests for adjournments without providing documentary evidence. The assessee's AR sought a remand, citing difficulties during the Covid-19 period and the organization's charitable nature.
Held
The Tribunal, acknowledging the principles of natural justice, remanded the case back to the AO for fresh adjudication. The assessee was directed to pay a cost of Rs. 2,000/- to the Prime Minister National Relief Fund and ensure active participation in subsequent hearings without seeking unnecessary adjournments. The AO is to provide a fresh opportunity of hearing and pass an uninfluenced order.
Key Issues
The key issue was the validity of an ex-parte assessment due to the assessee's non-compliance, and whether, given its charitable status, the case should be remanded for fresh adjudication to provide another opportunity to present its case.
Sections Cited
143(3), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 27.05.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 12.04.2021 passed by learned National e-Assessment Centre, Delhi [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2018-19, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
It emerged on perusal of orders of lower-authorities that the AO has though mentioned section 143(3) in assessment-order but actually passed ex-parte order in the nature of best judgement assessment u/s 144. The AO has noted in Para 5 to 11 of assessment-order the details of as many as 10 notices/reminders/show-cause notices given to assessee but the assessee did not comply. In Para 7, the AO has mentioned “It is observed that the assessee is a habitual non-complier”. Further, the CIT(A) has also noted in Para 5.2 and 5.4 of impugned order that during first-appellate proceedings, opportunities were given to assessee on 23.01.2024, 08.04.2024 and 08.05.2024 but the assessee only sought adjournments and did not file any documentary evidence.
Ld. AR submitted that the AO issued notices during Covid-19 period and further that the assessee is a charitable entity being handled by honorary office-bearers, hence a liberal view should be taken and in the interest of justice this case must be restored at the level of AO for adjudication afresh. He asserted that the assessee shall be making adequate participation before AO on the dates of hearing.
Ld. DR for revenue agreed that he has no objection if the case is remanded to the file of AO. However, he emphasized the non-cooperative attitude of assessee and requested to issue stricter directions to assessee.
In view of above submissions and also having regard to the principle of natural justice and fair play, we deem it fit to remand this matter back to Page 2 of 3 the file of AO for adjudication afresh, at the risk and responsibility of assessee and subject to payment of cost of Rs. 2,000/- to Prime Minister National Relief Fund and production of challan to AO. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court immediate after conclusion of hearing and subsequently reduced in writing on same day.