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Facts
The assessee, an individual, did not file her return of income for AY 2020-21. The AO reopened the assessment based on information about cash and time deposits. The assessee allegedly failed to comply with notices, leading to an ex parte assessment order. The CIT(A) also dismissed the assessee's appeal ex parte.
Held
The Tribunal held that the assessee should be granted an opportunity of being heard, as she did not get a proper opportunity before the AO and CIT(A). Following the Supreme Court's decision in TIN Box Co. v. CIT, the Tribunal set aside the orders of the lower authorities.
Key Issues
Whether the assessee was denied a proper opportunity of being heard by the AO and CIT(A) leading to ex parte orders.
Sections Cited
148, 144, 249(4)
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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:
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 08.10.2025 for the Assessment Year (hereinafter referred to as "AY”) 2020-21.
At the outset, the Ld.AR of the assessee submitted that the Ld.CIT(A) has passed an ex parte order qua assessee. She also submitted that the AO has also passed an ex parte order without going (AY 2020-21) Mrs. Saratha :: 2 :: into the merits of the grounds of appeal raised by the assessee.
Therefore, prayed that the assessee be granted an opportunity before the AO by relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).
The brief facts of the case are that the assessee is an individual and didn’t file her return of income (RoI) for AY 2020-21. The AO received information that the assessee had made cash deposits amounting to ₹20,51,200/- in her bank account in Tamilnadu Mercantile Bank Ltd., and also made time-deposits amounting to ₹42 lakhs and received interest income of ₹1,14,217/-. The AO reopened the assessment u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act”) by issuing notice dated 25.03.2024 and asked the assessee to give details of nature and source cash deposits/time-deposit. According to the AO, the assessee failed to comply with the statutory notices and therefore, he proceeded to complete the assessment u/s.144 of the Act and made an addition of ₹33,65,417/- by order dated 24.02.2025. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who dismissed the appeal ex-parte by observing that the assessee neither filed RoI nor remitted advance tax as required u/s.249(4) of the Act. The assessee is in appeal before us against the action of the authorities below since huge burden has been fastened by the ex-parte order passed by the authorities below and therefore prayed for one more opportunity before the AO by (AY 2020-21) Mrs. Saratha :: 3 ::
citing the decision of the Hon’ble Supreme Court in the case of TIN Box Co. (supra)
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 assessment order has been passed ex-parte qua assessee making an addition of ₹33,65,417/-. According to the assessee, she didn’t get any notices from the AO due to the glitches in the system/internet and therefore, she couldn’t comply with the notices issued by the AO. Before the Ld.CIT(A), even though, she tried to upload the relevant documents, the same couldn’t be complied because the Ld.CIT(A) dismissed the appeal as not maintainable since the assessee didn’t file any RoI nor paid advance tax. Be that as it may. We are of the view that the assessee should be provided an opportunity of being heard, so we set aside the impugned order passed by the Ld.CIT(A) and remit the matter back to the file of the AO since the assessee didn’t get proper opportunity before the AO as held by the Hon’ble Supreme Court in the case of TIN Box Co., wherein 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."
(AY 2020-21) Mrs. Saratha :: 4 ::
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?" 4. 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 in the case of TIN Box Co. (supra), we are inclined to 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 her claim before the AO and is at liberty to file additional documents. The AO is directed to frame fresh assessment in accordance to law after hearing the assessee.
(AY 2020-21) Mrs. Saratha :: 5 :: 7. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 11th day of February, 2026, in Chennai.
Sd/- Sd/- (एबी टी. वक�) (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER