VITHALBHAI HARJIBHAI PATEL,SURAT vs. ITO, WARD3(2)(4), SURAT

On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue submitted that the Bench may decide the matter as it thinks fit.

We have heard both the parties on this preliminary issue of delay in filing appeal. In the affidavit, it is submitted that the appellant came to know about the dismissal of appeal after receipt of the penalty proceedings in his message. The delay was neither deliberate nor intentional. Moreover, the assessee is not going to be benefitted by filling appeal belatedly. It is fairly settled that when /AY.2016-17 Vithalbhai Harjibhai Patel technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred. We, therefore, condone the delay and admit the appeal for hearing.

The facts of the case in brief are that the assessee had e-file his return of income for AY 2016-17 on 18.03.2017, showing total income of Rs.2,61,490/-. The return was processed u/s 143(1) of the Act, accepting the income declared by the assessee. The case was selected for limited scrutiny under CASS due to reason “Whether cash in hand shown in return of income is correct”. Various notices were issued u/s 143(2), 142(1) and 142(1) r.w.s. 129 of the Act, but the assessee had not properly responded to them. The assessee submitted copies of computation of income, bank account statement and cash book without any supporting evidence. The Assessing Officer (in short, ‘AO’) observed that the assessee had not furnished the complete details as called for. A final show cause notice was issued to the assessee on 11.12.2018, which is at para 2 of the assessment order. In response, the assessee filed his reply on 13.12.2018. The AO observed that the assessee had shown high cash in hand of Rs.44,49,175/-. The assessee had not proved the transaction of such cash generated/received to him by giving documentary evidence. The assessee shown cash in hand Rs.19,96,168/- for AY 2015-16 and Rs.44,49175/- for AY 2016-17. Since the assessee failed to furnish supporting details, the difference of cash in hand of Rs.24,53,007/- was treated as unexplained income and added it to the total /AY.2016-17 Vithalbhai Harjibhai Patel income of the assessee. Penalty proceedings u/s 271(1)(c) also initiated by the AO.

Aggrieved by the order of AO, the assessee filed appeal before CIT(A). The CIT(A) issued 5 notices fixing the hearing on 31.12.2020, 11.05.2023, 12.07.2023, 24.04.2024 and 11.06.2024, but there was non-compliance on the part of the assessee. He observed that the appellant had not filed any written submission during the appellant proceedings. The appellant was not keen to pursue the appeal, and no material had been brough on record in support of the grounds taken in appeal. He relied on the decisions in cases of CIT vs. B. N. Bhattacharya (1997) 118 ITR 461 (SC), CIT vs. Multiplan India Pvt. Ltd. reported in 38 ITD 320 (Delhi Trib.) and Vipul Logistic & Warehousing (P) Ltd. vs. ITO (Delhi Trib.). Hence, the CIT(A) upheld the findings of the AO and dismissed the appeal.

Aggrieved by the order of CIT(A), the assessee filed the present appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee filed a paper book, which includes letter dated 13.12.2018 with cash book and ledger for the year with supporting vouchers for AY 2016-17 and bank statements for the bank accounts for AY 2016-17. He submitted that all the documents were submitted before the lower authorities. The ld. AR also submitted that the CIT(A) passed an ex parte order without hearing the appellant on merit. He submitted that the non-compliance of the notices was not deliberate on the part of the appellant. The appellant is now ready to submit all details and evidences in support of the grounds raised by him before CIT(A).

On the other hand, learned Senior Departmental Representative (ld. Sr. DR) of the revenue supported the order of CIT(A). He submitted that the CIT(A) has passed the order due to non-compliance of the notices by the appellant. He would, however, have no objection if the matter is restored to file of CIT(A).

We have heard both the parties and perused the materials available on record. The AO made addition of Rs.24,53,007/-, being the difference of cash in hand between the preceding year and the year under consideration. The CIT(A) has dismissed appeal because the appellant did not respond to the five notices issued by him. After considering the contentions of both parties, we find that the CIT(A) has not passed an order as per the mandate of section 250(6) of the Act and dismissed the appeal of assessee only on the ground of non-compliance. The ex parte order passed by the CIT(A) is clearly violative of the express provisions of section 250(6) of the Act. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the fact that the assessment order was confirmed by CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to plead his case on merit. In the interest of justice, we set aside the order of CIT(A) subject to payment of cost of Rs.10,000/- (Rupees ten /AY.2016-17 Vithalbhai Harjibhai Patel thousand only) to the credit to “District Legal Services Authority, Surat” within 3 weeks after receipt of this order and remit the matter back to the file of CIT(A) with a direction to pass fresh order in accordance with law, after granting adequate and reasonable opportunity of hearing to the assessee. The assessee is directed to be vigilant and to furnish all details and explanation as needed by the CIT(A) by not seeking adjournment without valid reason.

In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 19/08/2025