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Facts
The assessee, an individual from a Scheduled Tribe in Arunachal Pradesh engaged in various businesses, did not file an income tax return for AY 2017-18, claiming exemption under Section 10(26) of the IT Act. An ex-parte assessment was completed under Section 144, determining income. The CIT(A) accepted the Section 10(26) claim but dismissed the appeal due to the non-filing of the return.
Held
The Tribunal observed that the ex-parte assessment under Section 144 warranted another opportunity for the assessee to prove their claims before the Assessing Officer. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case to the AO for fresh consideration after allowing the assessee to be heard.
Key Issues
1. Whether exemption under Section 10(26) of the Income Tax Act can be claimed by an assessee who has not filed a Return of Income. 2. Whether an ex-parte assessment made under Section 144 of the Act should be set aside to provide the assessee with an opportunity to present their case.
Sections Cited
Section 250, Section 10(26), Section 144
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Income Tax Appellate Tribunal, : GAUHATI BENCH : GUWAHATI
Before: SHRI RAJESH KUMAR, HON’BLE & SHRI MANOMOHAN DAS, 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 [NFAC], Delhi (hereinafter referred to as the (“CIT(A)” dated 24.12.2024 and 26.12.2024 respectively passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year 2017-18.
The brief facts of the case are that, the assessee is an individual engaged in the business of agricultural tools and equipments,
Page 1 of 3 -51 / GTY / 2025 Tajing Tapok -vs- The ITO, Ward-North Lakhimpur AY: 2017-18 fertilizers, pesticides, nursery etc. Along with that, he also has a BSNL franchise / stationary shop. Further, he is also a tube and tyre dealer. Return of Income for the AY 2017-18 was not filed as the assessee is eligible for exemption u/s 10(26) of the Act in respect of income accruing or arising to him from any source within the State of Arunachal Pradesh as he belongs to Minyong Tribe which is recognized as Scheduled Tribe under the Constitution (Scheduled Tribes ) Order, 1950. The assessee was not registered under E-filing Portal. Unaware of the fact that assessment proceedings have been initiated, the assessee could not comply with any of the notices issued to him. Hence, order u/s 144 of the Act was passed on 29.11.2019 determining the total income as Rs. 22,52,610/-. Being aggrieved, the assessee filed 1st appeal before the earned 4. CIT(A). The ld. CIT(A) vide order dated 27.12.2024 dismissed the appeal of the assessee.
Being aggrieved, the assessee filed the present appeal before the Tribunal.
We observe that, the ld. CIT(A) dismissed the appeal of the assessee due to failure in furnishing the return of income of the assessee. The ld. CIT(A) accepted the claim of the assessee that, the assessee can claim exemption from tax u/s 10(26) of the Act, however, the claim of the assessee from payment of tax has been denied due to non-filing of the return of income by the assessee.
We observe that, the ld. AO had completed the assessment of the assessee u/s 144 of the Act. The assessee failed to participate in the assessment proceedings. Since, the assessment was completed under section 144 of the Act, it is our considered opinion that, the assessee should get another opportunity to prove his claims before the ld. AO. Accordingly, we set aside the order of the ld. CIT(A) dated 24.12.2024 and remand the case to the file of the ld. AO for consideration afresh. We direct the ld. AO to reframe the assessment Page 2 of 3 -51 / GTY / 2025 Tajing Tapok -vs- The ITO, Ward-North Lakhimpur AY: 2017-18 of the assessee after giving the assessee an opportunity of being heard. Both the parties also have no objection in remanding the case for re-consideration. Thus, we allow the appeal of the assessee for statistical purposes only.
Again, as we have remanded the case of the assessee to ld. AO for reframing of the assessment, we set aside the confirmation of the penalty order of the ld. CIT(A) dated 26.12.2024.
In the result, the appeals of the assessee are allowed for statistical purposes only.