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Facts
The assessee, an individual deriving income mainly from salary, had their assessment completed under section 144, 147, and 144B of the Income-tax Act, 1961, as a best judgment assessment due to non-compliance. The appeal before the CIT(A) was dismissed ex-parte. The assessee claims genuine personal hardship prevented proper responses.
Held
The Tribunal noted that the assessee has now provided additional submissions and documentary evidence. Recognizing that tax matters should be decided on merits, the Tribunal decided to grant one final opportunity to the assessee.
Key Issues
Whether to allow the assessee a final opportunity to present evidence and arguments for deductions and TDS credit after a best judgment assessment and ex-parte dismissal at the appellate level.
Sections Cited
144, 147, 144B, Chapter VI-A
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 01.08.2025, for the Assessment Year 2019–20.
The assessee is an individual deriving income mainly from salary. The assessment was completed under section 144 read with section 147 and section 144B of the Income-tax Act, 1961, by making a best judgment assessment. The Assessing Officer brought to tax the entire gross salary and interest income and disallowed deductions and exemptions claimed in Form 16 on the ground that no documentary evidence was furnished during assessment proceedings.
Aggrieved, the assessee filed an appeal before the ld. CIT(A). Though the delay in filing the appeal was condoned, the appeal came to be dismissed ex-parte on account of non-compliance with notices issued during appellate proceedings. Consequently, the additions made by the Assessing Officer were confirmed.
Being aggrieved by the order of the ld. CIT-A, the assessee is in appeal before us.
The learned Authorised Representative submitted that the assessee could not properly respond to the notices during assessment as well as appellate proceedings due to genuine personal hardship. It was submitted that the assessee has now filed additional submissions along with supporting documentary evidence in respect of deductions claimed, including HRA, deductions under Chapter VI-A, loss from house property and TDS credit.
The ld. AR submitted that the income involved is mainly salary income and tax has already been deducted at source. It was argued that the disallowances were made only for want of documents and not on the ground that the claims were bogus. It was therefore requested that, in the interest of justice, the matter may be restored to the file of the Assessing Officer for fresh adjudication after considering the additional evidence.
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On the other hand, the learned Departmental Representative opposed the appeal and supported the orders of the lower authorities. However, the DR fairly submitted that if the Tribunal is inclined to grant one more opportunity to the assessee, the matter may be set aside to the Assessing Officer for fresh examination in accordance with law but after imposing nominal cost for negligent approach of the assessee.
We have heard both the parties and perused the material available on record. It is evident that the assessment was completed under section 144 on account of non-compliance and that the appeal before the ld. CIT(A) was dismissed ex-parte due to non-prosecution. The additions and disallowances were made primarily for want of supporting evidence.
8.1 We note that the assessee has now placed on record additional submissions and documentary evidence in support of his claims. The issues involved relate to allowability of deductions and grant of TDS credit, which are factual in nature and require verification.
8.2 It is a settled principle that tax matters should, as far as possible, be decided on merits and not merely on technical or procedural lapses. In our considered view, one final opportunity should be given to the assessee to substantiate his claims, and the Assessing Officer should examine the same in accordance with law. At the same time, we make it clear that the assessee shall fully cooperate in the proceedings and shall not seek unnecessary adjournments. In view of the above facts and in the interest of natural justice, we set aside the order of the CIT(A) as well as the assessment order passed under section 144 read with section .
147 of the Act. The entire matter is restored to the file of the Assessing Officer for fresh adjudication. The Assessing Officer is directed to consider the additional submissions and documentary evidence filed by the assessee, provide reasonable opportunity of being heard, and pass a speaking order in accordance with law. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in court on 10th day of February, 2026