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Facts
The assessee filed an ITR for AY 2018-19. The AO, based on a search action in another case, noted bank credits significantly exceeding reported business receipts and, due to non-compliance to notices under sections 148 and 142(1), made an ex-parte addition of Rs. 7,33,744/- as business income under section 144. The CIT(A) also dismissed the appeal ex-parte due to the assessee's non-compliance.
Held
The Tribunal condoned the 87-day delay in filing the appeal. It observed that the CIT(A) dismissed the appeal ex-parte, but the assessee cited health issues as the reason for non-appearance. Upholding principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication on merits, providing the assessee another opportunity to present their case.
Key Issues
Condonation of delay in filing appeal; Whether the ex-parte assessment and appeal dismissal by lower authorities violated principles of natural justice due to lack of adequate opportunity of hearing; Validity of addition made under Section 144 for escaped assessment.
Sections Cited
147, 144, 250, 148, 142(1)
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Income Tax Appellate Tribunal, “SMC” BENCH PANAJI
ORDER
PER PAVAN KUMAR GADALE ,JM:
The assesse has filed the appeal against the order of the CIT(A)-2 Panaji passed u/sec147 r.w.s144 and u/sec 250 of the Act.
At the time of hearing, it was found that there is a delay of 87days in filing the appeal before the Hon’ble Tribunal and the assesse has filed an affidavit for condonation of delay. Whereas, the facts mentioned in the affidavit are reasonable and sufficient cause was explained and the Ld. DR has no specific objections. Accordingly, condone the delay and admit the appeal. The assesse has raised the grounds of appeal challenging the ex-parte order of the Artha D Souza. CIT(A) sustaining the addition made by the Assessing Officer.
3. The brief facts of the case are that, the assesse has filed the return of income for the A.Y.2018-19 disclosing a total income of Rs.4,86,610/- on 7.02.2019.The Assessing Officer (AO) based on the information and statements in the search action in the case of Shri Jhon Stephen D souza found that the assessee was working with the business organisation and has reason to believe that the income has escaped the assessment and has issued notice u/sec148 of the Act and also the notice u/sec142(1) of the Act was issued to furnish the details of business receipts and there was no compliance. Whereas the A.O found total credits in the bank accounts in F.Y.2017-18 are aggregating to Rs.29,81,919/- and in comparison to business receipts as per the return of income filed is Rs.22,48,175/- and a show cause notice was issued to explain the difference amount and there was no compliance. Since, no explanations/details were filed, the AO considering the information available on record has invoked the provisions of Sec.144 of the Act and made addition of differential amount of Rs.7,33,744/- as business income and assessed the total income of Rs.12,20,354/- and passed the order u/sec 147r.w.s 144 of the Act dated 26.03.2022.
Aggrieved by the order, the assesse has filed an appeal before the CIT(A), whereas the CIT(A) has considered the Artha D Souza. grounds of appeal
, statement of facts and findings of the AO and has issued two notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assesse has filed an appeal before the Hon'ble Tribunal.
5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings. The Ld.AR mentioned that the assesse diue to health issues could not appear in the hearing of the cases before the CIT(A). Further the Ld.AR mentioned that the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Per Contra, the Ld.DR supported the order of the CIT(A).
6. Heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the facts that there is no compliance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld. CIT(A) has issued the only two notices of hearing i.e 20.11.2024 & 5.12.2024 referred at Page 3 Para 4.2 of the CIT(A) order Artha D Souza. but there was no response and thus the CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the addition made by the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice, shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the disputed issue to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.
7. In the result, the appeal filed by assesse is allowed for statistical purposes. Order pronounced in the open court on 16.09.2025.