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Facts
The assessee society did not file its ROI for AY 2015-16, leading to a reopening of the case under Section 147. The AO added FD interest of Rs. 23,168/- and cash deposits/credit entries of Rs. 1,46,59,742/- due to lack of evidence. The CIT(A) confirmed these additions. The assessee appealed this order.
Held
The Tribunal noted that the assessee's inability to comply with CIT(A)'s notices was due to the death of the President who was handling the tax matters. Considering the circumstances and the assessee's undertaking to be more vigilant, the case was restored to the CIT(A) for a fresh decision on merit.
Key Issues
Whether the addition of FDR interest and cash deposits/credit entries were justified, and whether the assessee should be given a fresh opportunity to present its case before the CIT(A) due to the death of its representative.
Sections Cited
250, 147, 144
AI-generated summary — verify with the full judgment below
Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 17.09.2024 by the National Faceless Appeal Centre, Delhi /Commissioner of Income-tax (Appeals) [in short ‘Ld. CIT(A)’] for the Assessment Year (AY) 2015-16, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 147 r.w.s. 144 of the Act dated 30.03.2023. Grounds of appeal
raised by the assessee are as under:
1. The Ld.CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.23,168/- on account of interest on FDR.
A.Y.15-16 The Pardi Education Society 2. The Ld. CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.1,46,59,742/- being deposits in Dena Bank & SBPP CO-OP Bank.
Prayer: 3.1 The additions/disallowances may kindly be deleted. 3.2 Personal hearing may be granted. 3.3 Any other relief that your honours may deem fit may be granted.
The assessee craves leave to add, amend, modify alter or delete any of the rounds at the time of hearing.”
Brief facts of the case are that assessee did not file its return of income (in short ‘ROI’) for the year under consideration. Thereafter, the case of assessee was reopened u/s 147 of the Act after taking approval from the competent authority. Accordingly, notice u/s 148 was issued on 29.03.2022 requiring assessee to file its return of income for the year under consideration. The assessee file its ROI on 02.05.2022 declaring total income Rs.Nil. The assessee submitted that scrutiny assessment for the AY 2015-16 in this case has already been completed under PAN AACTT1042A and the issue of cash deposit, time deposit in Dena Bank, Sardar Bhiladwala Pardi People’s Co-Op. Bank have been verified. The assessee also filed reply to the show cause notice vide reply dated 24.03.2023, which is reproduced at para-4 of assessment order. As no details and copies of evidences regarding source of cash deposits and other credit entries were submitted by the assessee, the AO has added FD interest of Rs.23,168/- and cash deposits/credit entries of Rs.1,46,59,742/- to the total income. The total income was determined at Rs.1,46,82,910/-.
3. The CIT(A) issued four notices on 05.08.2024, 13.08.2024, 20.08.2024 and 30.08.2024. However, there was no compliance to the above notices. Therefore, the CIT(A) has confirmed the additions made by the AO. Further aggrieved by the order of CIT(A), the assessee has filed present appeal before the Tribunal.
4. Before us, Ld.AR of the assessee submitted that assessee-society had initially applied for PAN, which was wrongly allotted in the category of “Firm” as AACFT7407N. The assessee immediately applied another fresh application and was allotted correct PAN under the category of “Trust” as “AACTT1342A”. In the initially opened bank account, the originally allotted PAN was submitted to the bankers. After obtaining the correct category PAN, the assessee informed the bank to change and correct the PAN. The appellant provided all the details of the bank account with Firm category PAN and demonstrated that the said bank account with above PAN has been fully recorded in the books of account of the society and duly incorporated in the audited statements as well as return of income filed under the correct PAN as AACTT1342A. However, additions were made by the AO. Against the assessment order, the appellant filed the appeal before CIT(A), who issued four notices, all in the month of August, 2024 with small time gaps. Compliance to the notices could not be made because the President of assessee-society expired in the month of A.Y.15-16 The Pardi Education Society December, 2023. He was a CA and was handling these matters. The new incumbent was not aware of the fact and when he came to know about the notices, the order of CIT(A) had already been passed. He submitted that the appellant is ready with all details and requested to provide another opportunity to plead its case on merit.
On the other hand, Sr-DR for the revenue supported the order of Ld.CIT(A). She stated that assessee has been negligent in pursuing the appeal before CIT(A) and the order may be upheld.
We have heard both the parties and perused the materials on record. The CIT(A) issued four noticed in the month of August, 2024, which were not complied. The Ld. AR has submitted that the President of the assessee-society was a Chartered Accountant by qualification and was handling the income-tax matters. He expired in the month of December, 2023 and the new incumbent was not aware of the appellate proceedings. The CIT(A) had already passed the ex parte order before he came to know about the appellate proceedings. Considering the facts and circumstances of the case and undertaking by ld. AR of the assessee that assessee will be more vigilant in future in making compliance, the matter is restored back to the file of Ld.CIT(A) to decide the issue afresh on merit, after giving reasonable opportunity of being heard to assessee. Needless to direct that before passing order afresh, the Ld.CIT(A) shall provide reasonable opportunity to the assessee. The assessee is also directed to be more vigilant and to make timely compliance of the notice