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Facts
The assessee, engaged in the business of trading books, failed to file an income tax return for assessment year 2017-2018. The case was selected for scrutiny, and ex-parte assessment orders were passed by the Assessing Officer and confirmed by the CIT(A) due to the assessee's non-response to notices.
Held
The Tribunal considered the assessee's submissions regarding his ill-health as a heart patient, his status as a small businessman, and lack of knowledge of tax procedures. Acknowledging the need for substantial justice, the Tribunal decided to provide one final opportunity.
Key Issues
Whether the assessee should be granted a final opportunity to present his case before the Assessing Officer, considering his ill-health and limited knowledge of tax procedures, despite previous non-compliance.
Sections Cited
147, 148, 142(1), 144, 44AD, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI V. DURGA RAO
ORDER PER V. DURGA RAO, J.M. : This appeal has been filed by the assessee against the order dated 31.03.2024, of the learned Addl./JCIT(A)-1, Jaipur, relating to assessment year 2017-2018. 2. Briefly stated facts of the case are that the assessee is an individual and engaged in the business of trading in old and new books at Chu Chu Bazar, Akola. The assessee had not filed return of income for the impugned assessment year 2017-2018. The case of 2 ITA.No.353/NAG./2024 the assessee has been selected for scrutiny and was reopened u/sec.147 of the Act after obtaining necessary approval from the Competent Authority. Accordingly notice u/sec.148 and statutory notices u/sec.142(1) of the Act were issued and served upon the assessee through registered mail-ID. Since the assessee did not respond to the statutory notices issues, the Assessing Officer passed ex-parte assessment order u/sec.144 r.w.s.147 of the Act vide order dated 12.12.2019 by determining the total income of the assessee at Rs.8,09,280/- by making addition of Rs.5,20,280/- as income from business u/sec.44AD of the Act [@ 8% of the total turnover of Rs.65,03,506/-]; addition on account of unexplained cash deposit of Rs.2,89,000/- u/sec.69A of the Act.
On being aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) and the learned CIT(A) also passed ex-parte order u/sec.144 of the Act and confirmed the assessment order of the Assessing Officer as there was no response from the side of the assessee, despite providing ample opportunities.
Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal.
3 ITA.No.353/NAG./2024 5. During the course of hearing, Learned Counsel for the Assessee submitted that the assessee is a heart patient suffering from long time and because of his ill-ness he could not look-after his business regularly and being a small business person he has no knowledge about the intricacies of income tax procedures. He submitted that the Assessing Officer completed the assessment by treating whole cash deposits as sales from business activity of the assessee and estimated the profit @ 8% on the cash deposit of Rs.65,03,506/-. Similarly, the Assessing Officer made addition of Rs.2,89,000/- on account of cash deposit u/sec.69A of the Act. He submitted that taking into consideration of assessee’s social status of a small businessman and his ill-health, one more opportunity may please be provided to the assessee to substantiate his case before the Assessing Officer in the interest of justice.
The Learned DR on the other hand strongly relied on the orders of lower authorities. He submitted that despite numerous opportunities provided to the assessee, he did not choose to file reply/explanation and therefore, the authorities had no option except to ex-parte orders under challenge. He accordingly submitted that that the orders of the lower authorities be confirmed.
4 ITA.No.353/NAG./2024 7. I have heard rival submissions of both the parties, perused the orders of the authorities below and the submissions of the Learned Counsel for the Assessee. I find that in the larger interest of substantial justice, providing one more opportunity to the assessee is just and proper in the instant case taking into consideration of his social status of a small businessman, his ill-health of heart problem and lack of knowledge of intricacies of income tax procedures. I accordingly set aside the matter back to the file of Assessing Officer with a direction to provide one final opportunity to the assessee to substantiate his case and decide the matter in issue as per fact and law by providing adequate opportunity of being heard to the assessee. I hold and direct accordingly.
In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 29.01.2025.