Loading judgment…
Facts
The assessee's appeal was filed against an order of the Commissioner of Income Tax (Appeals). The assessment was completed ex-parte under section 144 r.w.s. 144B of the Act. The assessee claimed to have incurred a loss from online gaming, believing the addition proposed would be dropped.
Held
The Tribunal noted that the proceedings before the AO and FAA were ex-parte due to the assessee's non-compliance with notices. While deprecating the assessee's attitude, the Tribunal restored the matter to the AO for fresh adjudication with a condition of paying Rs. 10,000/- as costs.
Key Issues
Whether the ex-parte assessment and order by the AO and FAA are justifiable, and if the assessee's non-compliance due to a bonafide belief of incurred loss from online gaming warrants a restoration of the case.
Sections Cited
250, 144, 144B, 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI INTURI RAMA RAO
आदेश/ O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 04.11.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2022-23.
At the very outset, we notice that the order of First Appellate Authority (FAA) is ex-parte, since there was no compliance from the assessee to three notices issued from the office of the First Appellate Authority. Further, we also note that the assessment has been completed on best judgment basis u/s.144 r.w.s. 144B of the Act by making addition of Rs.1,14,58,880/- u/s.68 r.w.s. 115BBE of the Act.
The ld.AR submitted that the addition of Rs.1,14,58,88-/- u/s.68 r.w.s.115BBE of the Act was on account of gross winning from online gaming. It was submitted by the Ld.AR that assessee had incurred loss from online gaming of Rs.15,14,882/- which is evident from the letter dated 28.02.2024 of Games Kraft Technologies Pvt. Ltd. (letter of Games Kraft Technologies Pvt. Ltd., was furnished in response to show-cause notice). It was further submitted by the Ld.AR that since assessee was under the bonafide belief that he had incurred loss from online gaming, addition proposed would be dropped and hence, did not take part in the assessment proceedings nor in the course of appellate proceedings.
The ld.DR supported the orders of the AO and the FAA.
We have heard rival submissions and perused the materials on record. The proceedings before the AO as well as the FAA were ex-parte, since the assessee did not respond to various notices issued from the office of the AO & FAA. The Ld.AR submitted that assessee was under the bonafide belief that since he had incurred loss from online gaming, the addition proposed will be dropped. We strongly deprecate the nonchalant attitude of the assessee in not responding to the notices issued from the offices of the AO. However, in the interest of justice and fair play, we are of the view that the matter ought to be restored to the files of the AO with a condition assessee pays a cost of Rs.10,000/- (Rupees ten thousand only) to be paid to Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. The amount of Rs.10,000/- shall be paid within a month’s time from the date of receipt of this order and assessee shall produce the receipt for the said payment before the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co- operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.