HYGIENIC PRODUCTS FOR COMMON CITIZENS,MADHEPURA vs. ITO WARD 3(4), SAHARSA, SAHARSA

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ITA 141/PAT/2025Status: DisposedITAT Patna02 September 2025AY 2019-20207 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had failed to make proper representation at both the assessment stage before the AO and the appellate stage before the NFAC. The NFAC's order indicated that adequate opportunities were given to the assessee, but there was non-compliance and no documents were produced. The Tribunal, in the interest of justice and fair play, deemed it appropriate to provide another opportunity to the assessee. Therefore, the Tribunal set aside the orders of both the NFAC and the AO. The matter was remitted back to the AO to be decided afresh, with the direction that the AO shall allow an opportunity of being heard and representing the case to the assessee. The assessee was cautioned against seeking unnecessary adjournments. The grounds of appeal raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Hygienic Products for Common Citizens, is a partnership firm. For Assessment Year 2019-20, the Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, after noticing from departmental databases that the assessee had received interest income but had not filed its return of income. Notices under Section 148 and subsequently under Section 142(1) were issued. The assessee provided partial replies but failed to submit details regarding the nature and source of interest income received from time deposits held in Central Bank of India, amounting to Rs. 6,31,764/-. The AO completed the assessment under Section 147 read with Section 144, making an addition of Rs. 6,31,764/-. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal ex-parte due to the assessee's non-compliance and failure to prosecute the appeal effectively.

What were the issues?

1. Whether the NFAC erred in confirming the assessment order passed by the AO, treating the entire sum of Rs. 6,31,764/- as income of the appellant, without proper consideration of facts and legal propositions? 2. Whether the NFAC erred in dismissing the appeal ex-parte without granting an opportunity to the assessee to represent its case properly? Assessee's Contentions: The assessee argued that the NFAC passed an ex-parte order because the appellant could not effectively represent the matter. It was submitted that the main partner of the firm, late John Cena, had expired, and during the appellate proceedings, the assessee could not file any documents. The assessee requested another opportunity to represent the case properly. Revenue's Contentions: The Revenue, through the Departmental Representative (DR), supported the order of the NFAC.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, PATNA

Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA

For Appellant: Shri Nishant Maitin, AR
For Respondent: Smt Rinku Singh, DR
Hearing: 21.08.2025Pronounced: 02.09.2025

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:

1.

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.

2.

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

7.

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.

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