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Facts
The assessee failed to file an income tax return for AY 2018-19. The Assessing Officer (AO) discovered substantial transactions in the assessee's bank accounts and initiated assessment proceedings. The assessee did not cooperate with the AO's notices, leading to an addition under section 69A of the Income Tax Act.
Held
The Tribunal held that the principles of natural justice were not followed as the assessee was not given a proper opportunity to be heard by the lower authorities. Both the AO and the CIT(A) passed orders without considering the assessee's submissions.
Key Issues
Whether the lower authorities violated the principles of natural justice by not providing adequate opportunity for hearing and passing ex-parte orders.
Sections Cited
147, 148, 69A, 144, 144B, 271AAC, 250
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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 19.12.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘CIT(A)’] for the Assessment Year (AY) 2018-19.
Grounds of appeal
raised by the assessee are as under: “1. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in re-opening the assessment u/s.147 of the Income Tax Act, 1961 and issuing notice u/s.148 of the Income Tax Act, 1961.
2. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in not considering the facts of the case and made addition without any base.
3. On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action /AY.2018-19 Abhishek Doriwala of the assessing officer in making addition of Rs.3,70,83,711/- on account of total credit entries in bank in bank account treated as alleged unexplained money u/s.69A of the Income Tax Act, 1961.
4. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax (Appeals) has errined in confirming the action of the Assessing Officer in initiating penalty proceedings u/s.271AAC of the Income Tax Act, 1961.
5. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered ample opportunities to hear the case and passed ex-parte order, hence the case may please be set aside and restored back to the CIT(A) or Α.Ο.
6. It is therefore prayed that the above penalty may please be deleted as learned members of the tribunal may deem it proper.
7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”
Facts of the case in brief are that the assessee did not file his return of income for AY.2018-19. As per the INSIGHT portal (Non-filing of Return (NMS), the Assessing Officer (in short, ‘AO’) found that the assessee had transactions of Rs.3,70,83,711/- in bank accounts maintained with Associate Co-op. Bank Ltd. and Akhand Anand Co-op. Bank Ltd. The AO issued notice u/s 142(1) of the Act, which was not replied to by the assessee. Subsequently, show cause notice was issued on 10.02.2023 and 23.02.2023. The assessee furnished only part reply and did not file relevant evidence. Thereafter, the AO passed order u/s 144 of the Act because assessee did not file any submission in response to various notices issued to him. He added Rs.3,70,83,711/- u/s 69A of the Act in the order passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act.
Aggrieved by the order of AO, the assessee filed appeal before CIT(A). The CIT(A) issued notice on 14.11.2024, which was not replied to by the assessee nor any request for adjournment was sought. Therefore, the CIT(A)
/AY.2018-19 Abhishek Doriwala dismissed the appeal by stating that the assessee has no further reason or evidence to substantiate the grounds taken up in the appeal. The onus was on the assessee to prove the claim before the AO or the appellate authorities. In absence of proper explanation, both the grounds and appeal were dismissed.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that only one notice of hearing was issued by the CIT(A) before dismissing the appeal. He submitted that the appeal was not decided on merits. He also submitted that proper opportunity of hearing was not granted to the assessee. In the interest of justice, he requested to allow another opportunity of hearing to plead his case on merits because both orders of the lower authorities are ex parte.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of the lower authorities. He would, however, have no objection if the matter is restored to CIT(A).
We have heard both the parties and perused the materials available on record. The AO has passed order u/s 147 r.w.s. 144 r.w.s 144B of the Act and made the addition without considering the submission of the assessee. The CIT(A) has dismissed the appeal and passed an ex parte order by observing that the assessee did not file any submission or requested for adjournment in response to the notice issued by him. The ld. AR submitted that all details are available with the appellant and one more opportunity may be granted to the