Loading judgment…
Facts
The Assessing Officer reopened the assessment for AY 2011-12 due to a cash deposit of INR 28,00,000/- in the assessee's bank account. Both the AO and the Ld. CIT(A) passed ex-parte orders confirming the addition due to the assessee's non-compliance. The assessee, claiming to be illiterate, contended non-receipt of notices and sought an opportunity for natural justice.
Held
The Tribunal, considering the assessee's illiteracy and the principle of natural justice, set aside the ex-parte orders of the lower authorities. The assessment is restored to the file of the Assessing Officer for a fresh assessment, with the direction that the assessee cooperate by furnishing necessary details to verify the source of the cash deposits.
Key Issues
Whether the ex-parte assessment and appeal dismissal were valid without providing a proper opportunity of hearing to the illiterate assessee, and the legality of the addition of cash deposits.
Sections Cited
Section 147, Section 144, Sections 147 to 151, Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 04.01.2024 for the assessment year 2011-12.
The assessee has raised following grounds of appeal:-
1. “That having regard to the facts and circumstances of the case, the Ld. Commissioner of Income-tax (A) erred on facts and in law in deciding the appeal ex-parte without providing the appellant proper and reasonable opportunity of hearing during appellant proceedings.
2. That having regard to the facts and circumstances of the case, the Ld. Commissioner of Income-tax (A) erred on facts and in law in upholding initiation of assessment proceedings under section 147 of the Income Tax Act, 1961 and completing the assessment under section 144 r. w. s. 147 of the Income Tax Act, which was illegal and not tenable in law being not in accordance with the requirements of provisions of sections 147 to 151 of the Income Tax Act, 1961.
3. That having regard to the facts and circumstances of the case, Ld. Commissioner of Income-tax (A) has erred in law and on facts in confirming the addition of Rs. 28,00,000/- on account of cash deposits in bank accounts of the appellant, without properly appreciating the facts of the case of the assessee.
That the appellant craves the leave to add, modify, amend, or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without prejudice to each other.”
3. Facts giving rise to the present appeal are that Assessing Officer (“AO”) on the basis of AIR information, re-opened the assessment of the assessee u/s 147 of the Income Tax Act, 1961 (“the Act”). The AO noted that the assessee had deposited a sum of INR 28,00,000/- in cash held with Canara Bank during the relevant Financial Year. In response to the Statutory notices, no one attended the proceedings on behalf of the assessee. Therefore, the AO made addition of INR 28,00,000/- ex-parte to the assessee and thus, assessed the income at INR 28,00,000/-.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A). Before Ld.CIT(A) also, there was no compliance on behalf of the assessee. Therefore, Ld.CIT(A) dismissed the appeal ex-parte to the assessee.
5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
Apropos to the grounds of appeal, Ld. Counsel for the assessee submitted that the assessee is an illiterate person and the notices of hearing Page | 2 were not received by him. He submitted that for the sake of natural justice, an opportunity be given to the assessee and the assessee would co-operate in the assessment proceedings.
On the other hand, Ld. Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below.
I have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. It is seen that the AO treated the entire cash deposits as the income of the assessee. Further, Ld.CIT(A) decided the appeal ex-parte to the assessee. It is also pertinent to note that the assessee is not a literate person. Therefore, considering the submissions of the Ld. Counsel for the assessee and to sub- serve the principle of substantial justice, I hereby set aside the impugned order and restore the assessment to the file of the AO to frame the assessment afresh. The assessee is hereby, directed to co-operate in the assessment proceedings and furnish the details/explanation as and when called for by the AO to verify the source of cash deposits in his bank account. Grounds raised by the assessee are accordingly, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.