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Facts
The assessee appealed against an NFAC order for AY 2017-18, challenging an ex-parte assessment and the CIT(A)'s rejection of additional evidence under section 46A. The CIT(A) had sustained an addition of Rs. 2,58,91,183/- under section 69A related to unexplained cash deposits. The assessee argued that notices were sent to an old address, preventing them from presenting evidence to the AO.
Held
The Tribunal found that the assessee had sufficient cause for not providing evidence to the AO earlier, as notices were issued to an incorrect address. Therefore, the Tribunal decided to remand the matter back to the Assessing Officer for a de-novo assessment, allowing the assessee to present their evidence regarding the source of cash deposits.
Key Issues
Whether an ex-parte assessment is valid when the assessee did not receive notices due to an incorrect address, and if additional evidence regarding the source of cash deposits should be admitted.
Sections Cited
Section 69A of the Income Tax Act, Section 46A of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. Saktijit DeyDr. B. R. R. Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 28.11.2023.
Following grounds have been raised by the assessee:
“1. That on the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad, both in the eye of law and on the facts.
2. That on the facts and circumstances of the case and the provision of law Ld CIT(A) has erred in sustaining the assessment framed without confronting the fact that the assessment order passed is against the act and against the various binding decisions of higher authorities.
That on the facts and circumstances of the case and provisions of the law Ld CIT(A) has erred in arbitrarily rejecting the explanation and evidences brought on record by the assessee to prove the source of cash deposits which is in violation of the principle of natural justice.
2 Kanchan Makan 4. That on the facts and circumstances of the case and provisions of the law Ld CIT(A) has erred in passing the order without even considering the replies/submissions/ documents filed by the assessee.
That on the facts and the circumstances of the case and the provisions of the law, Ld CIT(A) has failed to appreciate that the Ld AO has erred in forming an incorrect opinion without confronting the same and in using the same adversely without providing the reasonable opportunity of defending, which inaction of the AO makes the assessment proceedings and consequential assessment order as null and void.
On the facts and circumstances of the case, the Ld CIT(A) has erred both on facts and in law in sustaining the addition of Rs. 2,58,91,183/-, made by the A.O., under section 69A of the Act, on account of total credits appearing in the bank account(s)of the assessee during the year under consideration.”
3. We have examined the ground taken up by the assessee and heard the submissions of both the parties. In this case, the assessment has been completed ex-parte and the assessee has filed additional evidences before the ld. CIT(A) for admission u/s 46A of the Income Tax Act, 1961 which has been rejected by the ld. CIT(A). The ld. CIT(A) held that the assessee has failed to discharge the initial onus of explaining the sources of fund in the bank account. Before us, the assessee argued that the same could not be provided before the AO as the assessee was prevented by sufficient cause from producing the evidences before the AO. It was argued that the notices were issued to the old address which have not been received by the assessee which led to passing an ex-parte order. Hence, keeping in view the facts on record, we consider it to be a fit case to remand the matter to the file of the AO for passing an order de-novo in accordance with the provisions of Income Tax Act.
3 Kanchan Makan 4. In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 23/07/2024.