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Facts
The assessee, a partnership firm, failed to file an Income Tax Return despite receiving interest income of Rs. 6,31,764/-. The AO completed a best judgment assessment under sections 147/144/144B, adding the entire interest income due to the assessee's non-compliance in providing details. The CIT(A) dismissed the assessee's appeal ex-parte, upholding the AO's order, citing continued non-compliance.
Held
The Tribunal observed the consistent non-compliance by the assessee but, considering the submission about the demise of the main partner, decided to grant another opportunity. The ITAT set aside the orders of both the AO and CIT(A) and remitted the matter back to the AO for fresh adjudication, subject to the assessee not seeking unnecessary adjournments.
Key Issues
Whether the ex-parte assessment and appellate orders are sustainable when the assessee claims inability to represent due to a key partner's demise, and if a fresh opportunity for natural justice should be provided.
Sections Cited
250, 1961, 148, 142(1), 147, 144, 144B
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Income Tax Appellate Tribunal, “SMC” BENCH, PATNA (THROUGH VIRTUAL HEARING AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
Hygienic Products for Common Citizens Vs. ITO, Ward 3(4), Saharsa PO PS Purani Bazar Vill-Puraini, Bihar-852116 Madhepura, Bihar-852116, (PAN: AAJFH8566P) (Appellant) (Respondent) Present for: Appellant by : Shri Nishant Maitin, AR Respondent by : Smt Rinku Singh, DR Date of Hearing : 21.08.2025 Date of Pronouncement : 02.09.2025 O R D E R
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “the Ld. CIT(A)”) passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2019-20 dated 21.02.2025.
The grounds of appeal raised by the assessee are reproduced as un- der:
“1. The order passed by Ld. Commissioner of Income-tax, NFAC is unjust, unwarranted and bad in law. 2. The ld. Commissioner of Income-tax, NFAC failed to appreciate and/or over- looked and for did not consider the material on record before framing the best judgement assessment.
“6. The appellant in its ground of appeal has assailed the addition made of Rs.6,31,764/-. The AO held in assessment order that the appellant had (been) paid Rs.6,31,764/- as interest income on account of his time deposit account held in Central Bank of India, Puraini Bazar Branch, Madhepura and had not filed its ITR for relevant period . The AO issued statutory notices time to time to as- sessee to explain the nature of transaction made. The appellant filed reply but failed to submit any details regarding nature and source of TDS statement, in- terest received. Hence, AO passed assessment order u/s 147 r.w.s. 144 read with section 144B dated 29.02.2024 by making total addition of Rs.6,31,764/- to the income of the appellant. 6.1 It is to be noted here that the appellant had not filed any submission in the course of the appeal. It is pertinent that in order to decide this appeal in a timely manner a number of notices/ communications through ITBA portal were sent to the appellant, viz. Communications dated 23.10.2024, 16.12.2024 and 09.01.2025. However, there evidently has been no response from the appellant till date. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly ap- pears that the appellant’s compliance or rather lack of it, the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid total noncompliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed of, as under, ex-parte, primarily on the basis documentation available on record. 6.2 Firstly, it is stated at the outset, that in the situation as obtained in the instant case, as evidently seen from the above, this appeal is liable to be dis- missed in terms of the ratio of the judgements of the Hon’ble Apex Court and the various High Courts including the Hon’ble Apex Court which held in CIT v. B. N. Bhattacharjee and Another (10 CTR 354) that an appeal means an effective ap- peal and that to “prefer an appeal” would mean effectively prosecuting an appeal. “Purposefully and constructively interpreted, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 6.3 It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim “Vigilantibus non dormientibus jura subveniunt”. It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other
We, therefore, deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent its case properly before the Ld. AO and therefore, set aside the order of the Ld. CIT(A) as well as of the Ld. AO and remit the matter before the ld. AO to be decided afresh, who shall allow an opportunity of being heard and representing the case to the assessee and thereafter pass an order afresh in accordance with law. The assessee shall not seek unnec- essary adjournments. The Grounds of appeal raised by assessee are al- lowed for statistical purposes.
Order pronounced in the open court on 2nd September, 2025.
Sd/- Sd/- (SONJOY SARMA) (RAKESH MISHRA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Dated: 2nd September, 2025 Sudip sarkar, Sr. P.S.
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, PATNA