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Facts
The assessee failed to file a return of income for AY 2011-12. The case was re-opened, and the Assessing Officer made an addition of Rs. 84,00,000/- for undisclosed cash deposit. The CIT(A) dismissed the assessee's appeal due to non-compliance with notices, without deciding the case on merit.
Held
The Tribunal held that the CIT(A)'s order was passed ex-parte and was violative of Section 250(6) of the Act, as it failed to state the points arising in the appeal, the decision thereon, and the reasons. The Tribunal found that the assessee was not given adequate opportunity to present the case.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without adjudicating the grounds of appeal on merit and denying adequate opportunity of hearing to the assessee.
Sections Cited
143(3), 147, 148, 69A, 234A, 234B, 271(1)(c), 250(6)
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JIDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order of the Learned Commissioner of Income Tax(Appeals) / National Faceless Appeal Centre, Delhi (NFAC) [in short, “CIT(A)”] u/s 250 of the Income- tax Act, 1961 (in short, “the Act”) dated 26.09.2024 for assessment year (AY) 2011-12, which in turn arises out of assessment order passed by Assessing Officer u/s 143(3) r.w.s. 147 of the Act on 18.12.2018. The grounds of appeal
raised by the assessee are as under:-
1. On facts and circumstances of the case and law, the Ld. CIT(A) erred in passing ex-parte order without adjudicating the grounds of appeal on merit.
2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming validity of reassessment proceeding under section 147 of Income Tax Act, 1961.
3. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to consider that no other addition is permissible, if no addition made on basis of reasons recorded for reopening.
4. On the facts and circumstances of the case and law, the Ld.CIT(A) erred in confirming addition of rs.84,00,000 under section 69A of Income Tax Act, 1961. 5. On the facts and circumstances of the case law, the Ld.CIT(A) failed to consider that the provisions of section 69A of Income Tax Act, 1961 is not applicable when the appellant is not maintaining books of account. 6. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming charging of interest under section 234A, 234B of Income Tax Act, 1961. 7. On the facts and circumstances of the case and, the Ld. CIT(A) erred in confirming initiation of penalty proceeding under section 271(1)(c) of Income Tax Act, 1961. 8. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal
on or before the date of hearing.”
2. Facts of the case are that assessee had not filed his return of income (in short, ‘ROI’) for the AY 2011-12 on the basis of information available with the Department that assessee purchased immovable property during the year under consideration, the AO re-opened the case after obtaining necessary approval from higher authority. In response show cause notice u/s 148 issued on 26.03.2018, assessee filed his ROI on 28.11.2018 declaring income at Rs.48,424/-. The AO made re-assessment u/s 143(3) r.w.s. 147 of the Act on 18.12.2018 by making addition of Rs.84,00,00/- being undisclosed cash deposit in the AY.11-12 Jayendrasinh B Solanki bank account. Aggrieved by the order of AO passed u/s 143(3) r.w.s. 147 of the Act, assessee filed appeal before Ld.CIT(A). The CIT(A) dismissed the appeal due to non-compliance by assessee to various notices issued to him, as per para-3.3 of the appellate order. The CIT(A) has not decided the case on merit. Further, aggrieved by the order of CIT(A) the assessee has filed present appeal before the Tribunal.
3. Before us, Ld.AR of the assessee stated that the assessee while filing details in Form-35, he opted option as “No” for service of notices through e-mail as assessee was not in habit and practice to check his e- mail because he is not well versed with electronic gadgets. However, the notices were sent by the CIT(A) in the e-mail address of the previous AR of the assessee. Consequently, in absence of reply from assessee, CIT(A) passed the impugned order on 26.09.2024 ex parte. He requested that one more opportunity may be given so that appellant would plead his case on merit. He relied on decision of ITAT, Surat in case of Devang Arvindbhai Desai vs. ITO in 463/Srt/2024 dated 20.11.2024.
On the other hand, Ld.Sr-DR for the Revenue supported the order of lower authorities. He stated that assessee has been negligent in pursuing the appeal before CIT(A).
AY.11-12 Jayendrasinh B Solanki 5. We have heard both the parties and perused the materials on record. The Ld. AR has argued that CIT(A) has passed order without giving reasonable and sufficient opportunities of being heard to assessee. The notices were sent in the e-mail address of the previous CA. The CIT(A) dismissed appeal by passing a cryptic order without discussing merits of the case as required u/s 250(6) of the Act. We find that impugned order passed by the Ld.CIT(A) is clearly violative of the express provisions of Section 250(6) of the Act, which provides that the appellate orders of the Ld.CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. 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 submission of Ld.AR for the assessee that the assessment order was confirmed by CIT(A) in an ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest its case on merit. Hence, in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file CIT(A) with a direction to pass a speaking order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is AY.11-12 Jayendrasinh B Solanki directed to be vigilant and to furnish all details and explanation as needed by CIT(A) by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes.
6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 07/03/2025 in the open court.