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Facts
The assessee, an individual, did not file an income tax return for AY 2010-11. His case was reopened under Section 147 due to a cash deposit of Rs. 27,54,985 in his bank account. The AO made an ex-parte addition under Section 69A due to the assessee's non-compliance, which was upheld by the CIT(A)/NFAC, who also dismissed the appeal for non-prosecution. The assessee attributed non-compliance to his tax consultant's accident and subsequent fraud, for which an FIR was filed.
Held
The Tribunal condoned the 2-day delay in filing the appeal, finding a reasonable cause. It observed that both the AO and CIT(A) passed ex-parte orders, and the CIT(A) confirmed the addition without going into merits, violating Section 250(6) of the Act. Therefore, the Tribunal set aside the CIT(A)'s order and remitted the matter back for de-novo adjudication on merits after providing a reasonable opportunity of hearing to the assessee.
Key Issues
Condonation of delay in filing appeal; Validity of ex-parte assessment and appellate orders without affording proper opportunity of hearing; Admissibility of addition for unexplained cash deposits.
Sections Cited
Section 144, Section 147, Section 69A, Section 148, Section 142(1), Section 250(6)
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Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI R.K. PANDA, VICE- & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 21.01.2025 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY) 2010-11.
There is a delay of 02 days in filing of this appeal. The Ld. AR has filed a sworn affidavit of the assessee’s tax consultant for condonation of delay mentioning the reason that the assessee’s consultant met with an accident and he was advised bed rest for three months due to which coordination with his staff took time thereby causing the said delay. The Ld. AR submitted that delay is not intentional and prayed for condonation of delay. After hearing both the sides, we find that there is a reasonable cause for filing the appeal with delay. Therefore, in the light of the judgment(s) of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. [(1987) 2 SCC 107] and Inder Singh Vs. State of Madhya Pradesh (2025 INSC 382), we hereby condone the delay of 02 days in filing of the instant appeal before this Tribunal and admit the appeal for adjudication.
The assessee has raised the following grounds of appeal :-
1. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in not granting sufficient opportunity of hearing to the appellant and passing an exparte order.
2. On the facts and in the circumstances of the case the Assessment Order passed u/s 144 r.w.s. 147 is invalid and bad in law
3. On the facts and in the circumstances of the case the Assessment Order passed u/s 144 r.w.s. 147 is invalid and bad in law in as much as the Assessing Officer reopened the assessment proceedings of the appellant for verification of income which amounts to carrying out roving inquiries, impermissible in law.
4. On the facts and in the circumstances of the case and without prejudice to ground No. 1 to 3 the Assessing Officer has erred in making addition of Rs. 27,54,985/-in respect of cash deposits made in the bank account of the appellant
5. On the facts and in the circumstances of the case and without prejudice to ground No. 1 to 3 the sources of cash deposits of Rs. 27,54,985/- are completely explainable and the appellant may be granted an opportunity to explain the same The above grounds of appeal may kindly be allowed to be altered, modified, amended, deleted etc in the interest of natural justice.”
4. It is a case of an ex-parte assessment under section 144 read with section 147 of the Income Tax Act, 1961 (the “Act”). Briefly stated, the facts of the case are that the assessee is an individual and did not file his return of income for A.Y. 2010-11. The case of the assessee was reopened by the Ld. Assessing Officer (“AO”) under section 147 of the Act based on the information available with the Department that the assessee has deposited cash of Rs. 27,54,985/- in his savings bank account with the State Bank of India during the relevant AY under consideration. Accordingly, statutory notice(s) under section 148 and 142(1) of the Act as well as show cause notice(s) were issued and duly served upon the assessee from time to time requesting the assessee to submit the details regarding the said cash deposits. However, the assessee failed to comply with any of these notices. Due to lack of any reply/ documentary evidence regarding source of cash deposits, the Ld. AO made an addition of Rs.27,54,985/- as unexplained cash deposits under section 69A of the Act vide his order dated 22.12.2017 passed u/s 144 r.w.s. 147 of the Act.
5. The assessee carried the matter in appeal before the Ld. CIT(A)/ NFAC challenging the above addition made by the Ld. AO. Before the Ld. CIT(A)/NFAC, there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsed the findings of the Ld. AO.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that there was no intentional non-compliance of the notice(s) of hearing issued by the Ld. AO and CIT(A)/NFAC. The Ld. AR submitted that the assessee is not much educated. He submitted that the assessee’s then tax consultant indulged in fraud and fled away with his money due to which none of the records could be obtained and submitted before the lower authorities. The assessee has also filed FIR against the tax consultant. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to explain and substantiate his case by furnishing all the requisite supporting documents/evidence before the lower authorities. The Ld. AR, therefore, urged that the matter may be sent back to the file of Ld. CIT(A)/NFAC for adjudication afresh on merits, after affording an opportunity of hearing to the assessee.
The Ld. DR had no objection to the above proposition of the Ld. AR.
We have heard the Ld. Representative of the parties and perused the material available on record. We observe that both the Ld. AO as well as the Ld. CIT(A)/ NFAC have passed their respective orders ex-parte qua the assessee as the notices issued by them remained un-complied with. We find that the Ld. CIT(A)/NFAC vide his impugned order dismissed the appeal of the assessee in limine for non-prosecution of the appeal. On merits, the Ld. CIT(A)/NFAC has confirmed the addition made by the Ld. AO for failure on the part of the assessee to furnish the relevant supporting documentary evidences in support of his claim. Before us, the Ld. AR has submitted that the non-compliance before the Ld. CIT(A)/NFAC was not intentional but resulted on account of reasons stated above and pleaded that given an opportunity the assessee is in a position to explain and substantiate his case by filing all the requisite details/ documentary evidence in support of his claim before the Ld. CIT(A)/NFAC. Perusal of the impugned appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Hon’ble Delhi Court in Moddus Media Pvt. Ltd. Vs. M/s. Scone Exhibition Pvt. Ltd. (RFA 497/201 dated 18/05/2017) and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for denovo adjudication and pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order in accordance with law. The assessee is also hereby directed to provide his active and latest email id to the Department for receiving notice(s) of hearing and remain vigilant in accessing and responding to such notices.
We direct and order accordingly. The grounds raised by the assessee are thus allowed for statistical purposes.
In the result, the appeal of assessee is treated as allowed for statistical purpose.
Order pronounced in the open court on 28th January, 2026.