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Facts
The assessee deposited Rs. 13,18,500/- in bank accounts during the demonetization period. Following non-compliance with notices u/s 142(1) and failure to file a return u/s 139, the Assessing Officer completed an ex-parte assessment u/s 144, treating the cash deposit as income. The CIT(A) dismissed the assessee's first appeal for being time-barred and for not showing sufficient cause for the delay.
Held
The Tribunal found that the assessment was ex-parte and the CIT(A) dismissed the appeal on account of delay. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for fresh consideration, directing the AO to reframe the assessment after providing the assessee an opportunity of being heard. The appeal was allowed for statistical purposes.
Key Issues
Whether the ex-parte assessment and subsequent dismissal of appeal by CIT(A) due to delay were justified, and if the assessee should be given an opportunity to explain cash deposits.
Sections Cited
Section 250, Section 142(1), Section 139, Section 276CC, Section 276C91, Section 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, : GAUHATI BENCH : GUWAHATI
Before: SHRI MANOMOHAN DAS, HON’BLE & SHRI SANJAY AWASTHI, HON’BLE
ORDER
PER MANOMOHAN DAS, JM
The assessee filed this appeal against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the (“CIT(A)” dated 26.12.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year 2017-18. Page 1 of 4 Solaiman Bhuyan-Vs- The ITO, Ward, Barpeta AY: 2017-18 2. The brief facts of the case are that, the assessee, during the demonetization period from 09.11.2016 to 30.12.2016 made cash deposit in his bank accounts maintained with the HDFC Bank Ltd at Barpeta and State Bank of India, Barpeta respectively amounting to Rs. 13,18,500/-. Therefore, the ld. Assessing Officer issued notice u/s 142(1) of the Act dated 09.03.2018 asking the assessee to file return of income for AY 2017-18 on or before 31.03.2018. However, the assessee have failed to comply with the notice and failed to file return of income as per the provisions of section 139 of the Act. Since, the assessee failed to file the return of income and also not complied with the notice issued u/s 142(1) of the Act, a show cause notice for launching prosecution u/s 276CC and 276C91 of the Act was issued to the assessee on 22.05.2018. However, the assessee failed to comply the same. As the assessee did not respond to the notices issued as aforesaid, the ld. Assessing Officer proceeded to complete the assessment u/s 144 of the Act. The ld. AO treated the cash deposited amount of Rs. 13,18,500/- to the total income of the assessee.
Being aggrieved, the assessee filed 1st appeal before 3. the ld. CIT(A). The ld. CIT(A) vide order dated 26.12.2024 dismissed the appeal of the assessee. 4. Being aggrieved, the assessee filed the present appeal before the Tribunal. 5. We observe that, the ld. CIT(A) dismissed the appeal of the assessee by citing the reason that, the assessee failed to show sufficient cause for not filing of the appeal within the stipulated time for filing of appeal. The ld. CIT(A) observed
Page 2 of 4 Solaiman Bhuyan-Vs- The ITO, Ward, Barpeta AY: 2017-18 that, the assessee failed to show cause for the period prior to covid-19 period. Accordingly, the ld. CIT(A) dismissed the appeal of the assessee.
We observe that, the assessment order was an ex- parte order, and the ld. CIT(A) dismissed the appeal of the assessee by treating the appeal as time barred. The assessment order could not be passed on merit due to non- participation by the assessee in the assessment proceedings.
Since, the assessment order was an ex-parte order, and the appeal of the assessee has been dismissed by the ld. CIT(A) on account of the delay in filing of the appeal, it is our considered opinion that, the assessee should substantiate his case before the ld. AO. Therefore, we set aside the order of the ld. CIT(A) dated 26.12.2024 and remand the case of the assessee to ld. AO for fresh consideration. We direct the ld. AO to reframe the assessment after giving the assessee an opportunity of being heard. At the same time, we direct the assessee to substantiate his claims before the ld. AO. Thus, we allow the appeal of the assessee for statistical purposes only.