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Facts
The assessee filed a return of income for AY 2019-20. The Assessing Officer (AO) issued a notice u/s. 148 and later passed an ex parte best judgment assessment order u/s. 144, making a significant addition. The assessee's appeal to the CIT(A) was also dismissed ex parte for non-compliance with notices.
Held
The Tribunal noted that the assessee claimed technical glitches prevented timely submission of documents to the AO, and the CIT(A) also passed an ex parte order without considering the merits. Following the Supreme Court's decision in TIN Box Co. v. CIT, the Tribunal restored the case to the AO for de novo assessment.
Key Issues
Whether the lower authorities were justified in passing ex parte orders without giving proper opportunity to the assessee to present their case, and if the matter should be remanded for de novo assessment.
Sections Cited
148, 144, 147
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 17.02.2025 for the Assessment Year (hereinafter referred to as "AY”) 2019-20.
2. At the outset, the Ld.AR of the assessee brought to our notice that the Ld.CIT(A) has passed ex parte order qua assessee. He also submitted that the AO didn’t give proper opportunity to the assessee and therefore, the assessee couldn’t submit all the relevant documents required to prove its claim before the AO which has resulted in huge tax burden on the assessee of more than ₹10 Crs. Therefore, prayed for de novo assessment by relying the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).
3. The brief facts of the case are that the assessee has filed his return of income (RoI) for AY 2019-20 on 14.01.2020 declaring total income at ₹15,18,650/-. The AO is noted to have issued notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) on 27.03.2023 after taking note that the assessee had credits amounting to ₹161,00,96,227/- in her bank account out of which ₹1,60,60,540/- was cash receipts. The AO further noted that the assessee had shown a turnover of ₹146,91,89,750/- but has shown net profit of ₹15,18,650/- due to large amount of expenses claimed. The AO is noted to have called for several details but according to him, assessee couldn’t file the relevant documents to substantiate her claim, which led to passing of the assessment order u/s.144 of the Act (best judgment assessment) which fact is discernable from the caption of the assessment order dated 26.03.2024. The AO is noted to have made an addition of ₹10,42,11,925/- in place of returned income of ₹15,18,650/-. Aggrieved, the assessee filed an appeal before the Ld.CIT(A) who dismissed the same taking note that the assessee didn’t comply with his three (3) notices. The Ld.CIT(A) is noted to have not examined the merits of the (AY 2019-20) Abdul Shukoor Sakira Banu grounds of appeal raised by the assessee and has dismissed the appeal ex parte qua assessee.
4. Aggrieved by the huge tax burden fastened on the assessee by the ex parte orders, the assessee pleads for one more opportunity before the AO citing the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).
5. Per contra, the Ld.DR opposes the plea of the assessee and doesn’t want us to give one more opportunity to the assessee.
We have heard both the parties and perused the material available on record, we note that the AO has framed order u/s.144 of the Act and has made an addition of ₹10,42,11,925/- in place of returned income of ₹15,18,650/-. According to the Ld.AR, the assessee couldn’t file all the relevant documents before the due to technical glitches in the internet/system, which led to the AO passing the huge addition on the assessee. Therefore, he pleaded that the assessee be given an opportunity to place all the relevant documents before the AO. We find force from the submissions of the assessee and notes that the assessment order framed u/s.144 r.w.s.147 of the Act and the AO has made an addition of ₹10,42,11,925/- in place of ₹15,18,650/- returned by the assessee. The Ld.CIT(A) has also passed ex parte order without going into the merits of the addition. In such a scenario, we rely on the (AY 2019-20) Abdul Shukoor Sakira Banu decision of the Hon’ble Supreme Court in the case of TIN Box Co (supra) and is inclined to restore assessment back to AO for de-novo assessment.
In TIN Box Co (supra), the Hon’ble Supreme Court held as under:
It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus :
"We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard."
That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of selling out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard.
Two questions were placed before the High Court, of which the second question is not pressed.
The first question reads thus:
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee?"
In our opinion, there can only be one answer to this question which is inherent in the question itself: in the negative and in favour of the asses- see.
The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. No order as to costs.
Respectfully following the decision of the Hon’ble Supreme Court (supra), we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO for de novo assessment. The Ld.AR has undertaken to file all the relevant documents to substantiate
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 11th day of February, 2026, in Chennai.