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Facts
The assessee, an individual dealing in rubber, filed his ITR for AY 2014-15. His case was selected for scrutiny, leading to the AO making additions for unexplained cash shortage (Rs. 53.65 lakhs), unexplained credits (Rs. 62.69 lakhs from various persons), and interest from a savings account (Rs. 14,442/-), assessing a total income of Rs. 1,48,43,990/-. The CIT(A)/NFAC subsequently dismissed the assessee's appeal for non-prosecution, stating the assessee was not interested in pursuing the appeal.
Held
The Tribunal observed that the CIT(A)/NFAC dismissed the appeal for non-prosecution without adjudicating the merits, which is contrary to Section 250(6) of the Act. The assessee claimed that notices were sent to an incorrect/inactive email ID, leading to a lack of awareness about the new faceless e-proceedings. In the interest of justice, the Tribunal remitted the entire issues back to the CIT(A)/NFAC for fresh adjudication after providing a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution due to communication issues and unawareness of faceless proceedings, without adjudicating the merits of the additions made by the AO regarding unexplained cash deposits and credits.
Sections Cited
250, 143(1), 143(3), 142(1), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 9.2.2023 vide DIN & Order No. ITBA/NFAC/S/250/2022-23/1049565903(1) for the AY 2014-15 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
P. Abdul Kareem, Kozhikode Page 4 of 6 3. Brief facts of the case are that the assessee is an individual dealing in rubber under the name and style of "Amla Trading" in Thamarassery and had filed his Return of Income for the Assessment Year 2014-15 on 21-05-2015 electronically declaring income of Rs. 11,97,330.00/- and agricultural income of Rs. 20,08,220/-. The same was accepted u/s. 143(1) of the Act. Thereafter the case was selected for limited scrutiny under CASS for examining i) Agricultural Income ii) Cash Deposits. Accordingly, notices u/s. 143(3) as well as u/s. 142(1) of the Act was issued. During the course of assessment proceeding, the assessee filed cash flow statement to explain the cash deposit with the bank. The AO observed that the assessee did not file the cash flow with the bank accounts to prove the cash balance and on analyzing the cash flow statement held that there is a shortage of cash amounting to Rs. 53,65,000/- which is assessed as unexplained cash under income from other sources. Further, in the cash flow, the assessee declared deposits of Rs. 62,69,000/- from four persons but the AO held that in the absence of confirmation, source and nature of the amount of these credits, the entire amount represents income taxable under the income from other sources. Lastly, the AO added Rs. 14,442/- as interest from Saving bank account under income from other sources and assessed on a total income of Rs. 1,48,43,990/-
Aggrieved by the assessment completed u/s. 143(3) of the Act dated 28.12.2016, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
The ld. CIT(A)/NFAC dismissed the appeal of the assessee by holding that the assessee is not interested in prosecuting the appeal as neither any submission/document were submitted in support of
Aggrieved by the order of ld. CIT(A)/NFAC dated 09.02.2023, the assessee has filed the present appeal before this Tribunal.
Before us, the ld. AR of the assessee submitted that the assessee could not represent his case before the ld. CIT(A)/NFAC since all the notices were sent through email-id which did not belong to the assessee / is no longer in use / was incorrect. Further AR submitted that the faceless appeal was implemented for the first time and the assessee was unaware of the e-proceedings carried out and also no hard copy of the notices was served on the assessee. The ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution without considering the merit of the case which is bad in law and prayed to provide one more opportunity before the ld. CIT(A)/NFAC.
The ld. DR on the other hand supported the order of the authority below.
We have heard the rival submissions and perused the material available on record. A perusal of the fact of the case shows that the assessee could not represent his case before the ld. CIT(A)/NFAC as a result of which the ld. CIT(A)/NFAC has dismissed the appeal of the assessee on account of non- prosecution. Further on perusal of the order of the ld. CIT(A)/NFAC, it is found that the ld. CIT(A)/NFAC has also not adjudicated the issues on merit. As per the provision contained in section 250(6) of the Act, the order of the ld. CIT(A)/NFAC disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.
9.1 During the course of hearing, the ld. AR of the assessee requested that the assessee may be provided with one more opportunity to represent his case before the ld. CIT(A)/NFAC. In view of the above, considering the prayer of the ld. A.R. of the assessee, as well as in the interest of justice and fair play, we deem it fit to remit the entire issues involved in the present appeal to the file of ld. CIT(A)/NFAC for fresh adjudication in accordance with the law. Needles to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the necessary documents/evidences/information in support of his claim and shall not seek unnecessary adjournments. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.