KANDASAMY ANANDHARAJA,NAMAKKAL vs. ITO WARD 1, THIRUCHENGODE, THIRUCENGODE

This appeal of the assessee is filed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short “ld.CIT(A)”) for the assessment year (A.Y.) 2012-13, vide order dated 17.01.2024.

At the threshold, we observe that there is a delay of 604 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the said delay occurred due to continuous involvement in attending to parents for intensive treatment and unfortunately passed away of father on 21.06.2023 due to illness and the assessee had no knowledge of the income tax proceedings. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

Brief facts of the case are that the assessee is an individual and partner of M/s.Sri Sakthi Murugan Transports and had not filed his return of income for AY 2012-13. Based on the information available with the department, the Assessing Officer noticed that the assessee has made cash deposits to the tune of Rs.2,14,72,720/- into his Savings Account and the case was re-opened u/s.147 of the Act. The Assessing Officer issued notice u/s.148 of the Act and statutory notices to the assessee and called for details. The assessee filed his return of income on 04.11.2019 for A.Y 2012-13, declaring a total income of Rs.3,25,180/-. On perusal of the ITR filed by the assessee, the Assessing Officer noticed that the said deposit of a sum of Rs. 2,14,72,720/- was not found in the return of income. The assessee failed to respond to any of the notices. Meanwhile, the Assessing Officer issued notice u/s.133(6) of the Act and information was called from M/s. ICICI Bank, Mumbai. On verification of the details received from the bank, the Assessing Officer completed the assessment u/s.147 r.w.s 144 r.w.s 144B of the Act on 27.09.2021 by making an addition of Rs.1,07,64,360/- as unexplained money u/s.69A of the Act and arrived a total income of Rs.1,10,89,540/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC on 05.10.2021.

At the outset, we observed that ld.CIT(A) has provided six opportunities for the assessee to appear for hearings as detailed in paragraph 4 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order dated 17.01.2024. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

The ld.AR submitted that the assessee had no knowledge of income tax proceedings and hence he was not aware of the notices issued by the ld.CIT(A) and hence he could not appear before the Assessing Officer as well as ld.CIT(A). The assessee became aware only after receiving of recovery notice from Income Tax Department. In view of the above, the ld.AR prayed that the Hon’ble Tribunal may be pleased to set aside the order of CIT(A) and remit the issues to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an ex-parte order by considering the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non- participation of the assessee before the Assessing Officer as well as the ld.CIT(A). Since, the assessee has failed to participate before the Assessing Officer as well as the first appellate authority, we levy the cost of Rs.25,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.

In the result, appeal filed by the assessee is allowed for statistical purposes.