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Facts
The assessee, an individual engaged in trading gold and silver jewellery, failed to comply with notices issued under section 142(1) of the Income Tax Act. Consequently, the Assessing Officer passed an ex-parte assessment order under section 144, making significant additions to the assessee's income, which was subsequently confirmed by the CIT(A). This appeal to the Tribunal challenges the CIT(A)'s order.
Held
The Tribunal set aside the impugned appellate order of the CIT(A) and restored the issues in dispute to the file of the Assessing Officer. The Assessing Officer is directed to pass a de novo assessment order in accordance with law after providing the assessee with a reasonable opportunity of hearing.
Key Issues
Whether the ex-parte assessment under section 144 was valid given the alleged lack of proper notice and opportunity, and the justification of various additions including inflated profit, unexplained cash credit under section 68, and unexplained investment under section 69 based on disputed survey data.
Sections Cited
Section 144, Section 142(1), Section 68, Section 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD
Before: SHRI SUBHASH MALGURIA & SHRI SANJAY AWASTHI
This appeal has been filed by the assessee for assessment year 2019- 2020 against impugned appellate order dated 14/11/2024 (DIN & Order No.ITBA/APL/S/250/2024-25/1070367433(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal the assessee has raised the following grounds:
“1. That in any view of the matter, assessment framed under section 144 by order dated 28.09.2021 on income of Rs.98,84,378/- is bad both on the facts and in law.
2. That in any view of the matter the Learned CIT(A) passed the order containing 17 pages and only in 2 pages the appeal was decided without giving findings to the merits of the case and thus the order of CIT(A) is not a speaking order in the eyes of law.
That in any view of the matter both the two lower authorities failed to take cognizance to the details filed nor proper opportunity was provided to the assessee to adjudicate the issues and hence the assessee was debarred from justice.
4. That in any view of the matter the assessing officer was wrong in framing the order ex-parte without providing reasonable opportunity to the assessee nor any opportunity was provided to the assessee nor any notice under section 142(1) was received by the assessee hence the entire action is bad in law.
That in any view of the matter survey was conducted on 02.08.2019 (A.Y.2020-21) and not during the year under consideration and addition was made on the basis of rough and dumb document nor the figures were verified by the assessing officer and in casual manner huge addition was made which is highly unjustified.
That in any view of the matter addition was Rs.22,76,281/- on account of inflated profit as alleged on the basis of profit and loss printout on account of corrupt data as made by the assessing officer as per para 5.5 of the order is highly unjustified.
That in any view of the matter addition of Rs.54,37,966/- by alleging unexplained cash credit under section 68 of the Act, is not correct and infect it was the cash balance and not cash credit and the difference as pointed out was on the basis of computer printout of cash summery of corrupt data hence the addition made by Assessing Officer and confirmed by CIT(A) is highly unjustified.
That in any view of the mailer addition of Rs.54,37,966/- is highly unjustified in so far as the addition was made on the basis of printout of corrupt data which has no relevance and the assessee during survey proceeding stated such printout to be rough document but this facts was all together by the assessing officer and too much weightage was given to rough document /corrupt data hence the entire action is bad in law.
That in any view of the matter addition of Rs.13,05,000/- on account of cash credit added under section 68 of the Act, as added by the assessing officer as per para no.7 of the order and his action as confirmed by CIT(A) is highly unjustified.
That in any view of the matter the addition of Rs.13,05,000/- belong to different persons who are man of status, they are income tax assessee, the parties are close relatives of the assessee, they have pan and Aadhar number, the amount was shown in earlier year also hence the assessee discharge the burden as laid down under section 68 of the Act, therefore the addition made by the assessing officer and confirmed by CIT(A) is highly unjustified.
That in any view of the matter addition of Rs.18,000/- and Rs.87,941/- on account of remuneration to partners and out of unexplained investment under section 69 of the Act, as per para 8.1, 8.2 and 9 of the order is highly unjustified.”
The facts of the case, in brief, are that the assessee is an individual, engaged in the business of trading in gold and silver jewellery. The business is carried on under the name and style of ‘Bhagwati Jewells”. Return of income was filed on 30/10/2019 declaring total income of Rs.7,59,190/-. The Assessing Officer issued notice u/s 142(1) of the Act on 26/02/2021 for compliance on 05/03/2021. Since no compliance was made, another notice u/s 142(1) was issued on 09/08/2021 for compliance on 18/08/2021. This time also, no compliance was made by the assessee. The Assessing Officer issued a show cause notice on 21/09/2021 fixing the date of hearing on 24/09/2021. When no compliance was made, the Assessing Officer proceeded to pass the assessment order u/s 144 of the Income Tax Act (“the Act” for short) 28/09/2021 whereby the assessee’s total income was assessed at Rs.98,84,378/- by making various additions. The aforesaid assessment order was passed ex-parte qua the assessee. Aggrieved, the assessee carried the matter in appeal before learned CIT(A). The assessee’s appeal against the aforesaid assessment order was dismissed by the learned CIT(A) vide order dated 14/11/2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 14/11/2024 of learned CIT(A).
3. On merits, at the time of hearing, the learned Counsel for the assessee submitted that no notice was served upon the assessee prior to passing of the assessment order. He further submitted that lack of compliance with the notices issued by the Assessing Officer during assessment proceedings was because no notice was served on the assessee. He also submitted that the issues in dispute regarding the various additions made by the Assessing Officer and confirmed by learned CIT(A) should be restored back to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after providing reasonable opportunity to the assessee. The learned D.R. for Revenue although supported the orders of the authorities below but did not express any objection to the aforesaid submissions of learned Counsel for the assessee. In view of the foregoing and in the specific facts and circumstances of the present case, the impugned appellate order dated 14/11/2024 is set aside and the issues in dispute regarding the various additions made by the Assessing Officer are restored back to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after providing reasonable opportunity of hearing to the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
(Orders pronounced on 07/04/2025 in accordance with Rule 34(4) of the I.T.A.T. Rules)