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Facts
For AY 2013-14, the assessee did not file an ITR. Reassessment proceedings were initiated under section 147, alleging the assessee benefited from bogus shares of PNC Fincorp Ltd and received fictitious profits of Rs. 26.64 lakhs. In the absence of a response, the assessment was completed ex-parte under section 144, adding Rs. 27.17 lakhs as unexplained investment under section 69. The CIT(A) dismissed the assessee's appeal due to non-compliance with notices and failure to provide requisite documents.
Held
The Tribunal noted that the CIT(A) had not adjudicated the appeal on its merits due to the lack of proper documentary evidence. In the interest of justice, the matter was remanded back to the CIT(A) for fresh adjudication on the merits of the case, instructing the assessee to cooperate by furnishing all documentary evidence and submissions after being given a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in dismissing the assessee's appeal for non-compliance without a merits-based adjudication, and if the assessee should be granted a fresh opportunity to present evidence.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961, Section 69 of the Income Tax Act, 1961, Section 282 of the Income Tax Act, 1961, Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
ORDER Per: Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of ld. CIT (A), NFAC, Delhi, passed u/s 250 of the Act, 1961 vide order dated 07.10.2024 which has emanated from the order of AO, Ward-2(2), Muktsar, passed u/s 147 r.w.s 144 of the Act, vide order dated 27.03.2022.
The assessee has taken six grounds of appeal
in Form No. 36 and the main grievance of the assessee relates to the dismissing the appeal by the ld. first appellate authority for non-compliance of notices issued in course of appellate proceedings.
3. Brief facts emerging from records are that the assessee has not filed any return of income for the year under appeal and proceedings u/s 147 of the Act was initiated, vide notice u/s 148 dated 30.03.2021, on the ground that the assessee was beneficiary of bogus Scripts of PNC Fincorp Ltd and has received fictitious profit amounting to Rs.26.64 lakhs. 3.1 In absence of any response from the assessee, to various notices issued, the assessment was completed on a total income of Rs.27.17 lakhs being the amount of unexplained investment u/s 69 of the Act. 3.2 In course of first appellate proceedings various notices were issued from the office of the ld. CIT(A) and even though adjournments were granted the assessee was not able to comply within time allowed and on account of this non-compliance, the appeal has been dismissed.
4. Now, in course of appeal before the tribunal, the ld. AR of the assessee submitted that proper opportunity of hearing has not been granted by the ld. first appellate authority and in spite of the adjournment being requested for furnishing all the requisite papers and documents, the same has not been allowed.
The ld. AR further submitted that all relevant supporting documentary evidences are available to prove the genuineness of the transactions doubted by the AO and in absence of any adjournment being granted as asked for, the said documentary evidences could not be produced before the ld. first appellate authority, and he prayed for an opportunity of hearing for production of the evidences and for representing his appeal on merits before the ld. first appellate authority.
The ld. DR relied on the order of the ld. CIT(A).
We have heard the rival submissions and considered the materials on record and we find that in the instant case; the appeal has not been adjudicated on merits on the ground contained in Form 35 and in absence of proper documentary evidences it was not practically possible for the ld. first appellate authority to arrive at a judicial conclusion. 7.1 As such, in the interest of justice, we remand the matter back to the file of the ld. CIT(A) for adjudicating on the grounds contained in the memorandum of appeal on merits of the case and we also direct the assessee to furnish all the documentary evidences relied upon, alongwith necessary particulars and written submissions and to fully cooperate in appellate proceedings for proper disposal of the appeal. 7.2 The assessee shall be allowed a reasonable opportunity of being heard and notice to be issued as per provision of section 282 of the Act, and also in e-mail id as stated in form 35.