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Facts
The assessee, engaged in the business of sale of bedana, filed an income tax return of Rs. 15,33,820. Due to non-compliance with statutory notices, the Assessing Officer completed an ex-parte assessment under section 144, determining an income of Rs. 1,65,82,968/-, which included additions for estimated net profit, WDV difference, unexplained cash deposits under section 68 during demonetization, and unexplained agricultural income. The CIT(A) dismissed the assessee's first appeal without adjudication due to a significant delay of 4 years and 6 months in filing.
Held
The Tribunal acknowledged that both the original assessment and the first appeal dismissal were ex-parte. Considering the assessee's contention that the ex-parte nature and delay were due to their erstwhile counsel's failure to inform them, and in the interest of justice, the Tribunal condoned the delay in the current appeal. It set aside the CIT(A)'s order and restored the entire matter to the Assessing Officer for fresh assessment, directing the AO to provide a reasonable opportunity of hearing and the assessee to comply with notices.
Key Issues
Whether the ex-parte assessment and additions made without a show-cause notice were valid; Whether the delay in filing the appeal before the CIT(A) should be condoned; Whether the matter should be restored to the Assessing Officer for fresh adjudication.
Sections Cited
144, 143(2), 142(1), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: DR. MANISH BORAD & SHRI VINAY BHAMORE
आदेश/ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 20.11.2024 passed by „Ld. CIT(A)‟ NFAC Delhi for the assessment year 2017-18.
There is delay of 31 days in filing of this appeal. We are satisfied with the reasons mentioned in the application for condonation of delay supported by an affidavit duly sworn in by the assessee that the assesse was prevented by reasonable & sufficient cause in not filing this appeal with in prescribed time limit. Accordingly after hearing LD DR we condone the delay & proceed to adjudicate the appeal.
Assessee has raised following grounds of appeal:-
1) GROUND No. 1 On the facts and circumstances of the case the Learned Assessing Officer has erred in completion the assessment u/s 144 of the Income Tax Act, 1961 without Considering nature of business without considering the results of audited financial he made addition of Rs. 98,49,060/-statements and without giving show cause Notice 1.1) Total turnover for the year under consideration was Rs. 22,85,95,968/- Learned AO Rejected audited books of accounts without quantifying any specific defect in it and without giving any show cause notice for the same. He considered profit @5% of total turnover and made addition of Rs. 98,49,060/- Learned AO issued show cause notice on 19/12/2019 vide DIN No. ITBA/AST/F/143(3)(SCN)/20 19-20/1022682328(1), However in this show cause notice he failed to give show cause of addition of Rs. 98,49,060/- Prayer I pray that addition made by learned AO is without following mandate of law, hence The order passed needs to be quashed.
2) GROUND No. 2 On the facts and circumstances of the case the Learned Assessing Officer 7,70,218/- being difference between closing WDV of has erred to make addition of Rs. preceding year and opening WDV of the year under consideration without Giving Natural justice and show cause for the same 2.1) Learned A.O. has made an addition of Rs. 7,70,218/- being difference between closing WDV of preceding year and opening WDV of the year under consideration without giving any natural justice to the case. This addition is made without any show cause notice for the same Prayer I pray that addition made by learned AO is without following mandate of law, hence The order passed needs to be quashed.
3) GROUND No. 3 On the facts and circumstances of the case the Learned Assessing Officer has erred to make addition of Rs. 42,26,000/- being cash deposit made during demonetisation period without considering the fact that said cash was out available cash balance in hand 3.1) Learned AO issued show cause notice on 19/12/2019 vide DIN No. ITBA/AST/F/143(3)(SCN)/2019-20/1022682328(1), However in this show cause notice he failed to give show cause of addition of Rs. 42,26,000/- Prayer I pray that addition made by learned AO is without following mandate of law, hence The order passed needs to be quashed.
4) GROUND No. 4 On the facts and circumstances of the case the Learned Assessing Officer has erred to make addition of Rs. 2,03,870/- being agriculture income without considering the fact that said agri income was banking channel and its genuine sources received through 4.1) Learned A.O. has made an addition of Rs. 2,03,870/- without considering the genuine sources and without giving any show cause notice. Prayer I pray that addition made by learned AO is without following mandate of law, hence The order passed needs to be quashed. 5) GROUND No. 2- The appellant craves leave to add/amend or alter any of the above grounds of Appeal.
Facts of the case in brief are that the assessee is an individual engaged in the business of sale of bedana and other products and has furnished his return of income declaring an income of rupees 15,33,820. The case was selected for scrutiny under Cass and statutory notices under section 143(2) & 142(1) of the IT Act and show cause notices respectively were issued to the assessee. The assessee did not comply with any of the above notices therefore the assessing officer completed the assessment under section 144 of the IT act by determining income of Rs. 1,65,82,968/- as against the income of Rs. 15,33,820/- returned by the assessee. The above said income includes addition of Rs. 98,49,060/- on account of estimation of net profit and also includes addition of Rs. 7,70,218/- on account of difference in WDV of assets and also includes addition of Rs. 42,26,000/- on account of unexplained credit under section 68 of the IT act being cash deposited in his bank accounts during demonetization and also includes addition of Rs. 2,03,870/- on account of unexplained agricultural income.
Being aggrieved with the above ex parte assessment order the assessee preferred an appeal before the learned CIT appeal. The appeal was dismissed by learned CIT appeal without admitting the same for adjudication Since the appeal was filed belatedly that is with the delay of 4 years and 6 months.
It is the above order against which the assessee is in appeal before this tribunal.
We have learned counsel from both the sides and perused the material available on record. In this regard we find that the assessment order was passed ex parte and 1st appeal was dismissed by learned CIT appeal on the ground of substantial delay. In this regard it was the contention of learned counsel of the assessee that the email appearing on the income tax portal belong to erstwhile counsel of the assessee who did not inform the assessee about dates of hearing which resulted in unfortunate ex parte order by the assessing officer and in the absence of knowledge of such an ex parte assessment order the assessee could not file 1st appeal within the prescribed time limit before the learned CIT appeal. In support of this contention an affidavit duly sworn in by the assessee was also furnished before the bench . It was the sole prayer of the Counsel of the assessee that the matter may kindly be restored back to the file of the assessing officer so that the assessee can explain his case before the assessing officer since the original assessment orders were also passed ex parte.
Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case we deem it appropriate to set aside the order passed by learned CIT appeal and restore the matter back to the file of the assessing officer with a direction to pass assessment order afresh and as per fact and law after providing reasonable opportunity of hearing to the assesse. The assessee is also hereby directed to respond to the notices issued by the assessing officer in this regard and to produce evidences, documents, written submissions etc in support of return of income without taking any adjournment under any pretext otherwise the assessing officer shall be at liberty to pass appropriate order as per law. Accordingly the grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result filed by the assessee is allowed for statistical purposes.
Order pronounced on this 17th day of March, 2026.