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Facts
The assessee deposited Rs. 72,24,354/- in cash in an HDFC Bank account during the demonetization period. The Assessing Officer treated this unverified deposit as 'income from undisclosed sources' under Section 69A of the Income-tax Act and framed the assessment under Section 143(3). The CIT(A) upheld the addition and dismissed the assessee's appeal.
Held
The Tribunal observed that assessment proceedings at lower levels were ex-parte as the assessee claimed not to have received notices, which were sent to the Chartered Accountant's email. Finding procedural infirmities and in the interest of justice, the Tribunal restored the matter to the Assessing Officer for a fresh decision after affording the assessee a proper opportunity to be heard and present information.
Key Issues
Whether the ex-parte assessment by lower authorities was valid given the assessee's claim of non-receipt of notices; and whether the assessment should have been framed under Section 144 (best judgment) instead of Section 143(3).
Sections Cited
143(3), 69A, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI SAKTIJIT DEY, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 20.05.2022 pertaining to A.Y. 2017-18.
Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
The sum and substance of the grievance of the Appellant is that the lower authorities have grossly erred in deciding the appeal exparte.
Facts on record show that assessment was framed u/s 143(3) of the Income-tax Act, 1961 [the Act, for short].
Notices issued to the assessee from time to time were neither replied to by the assessee nor any details were uploaded.
The Assessing Officer found that during the demonetization period, the appellant had deposited cash of Rs. 72,24,354/- in his account with HDFC Bank. Since the cash deposit of Rs. 72,24,354/- remained unverified, the Assessing Officer was left with no choice but to add back the cash deposited in the account maintained with HDFC Bank to the total income of the assessee as ‘income from undisclosed sources’ for the year under consideration u/s 69A of the Act.
5. Aggrieved, the appellant assessee went in appeal before the ld. CIT(A).
The ld. CIT(A) upheld the order of the Assessing Officer by observing that the assessee never came forward with his explanation to the grounds despite being offered number of opportunities through hearing notices. Accordingly, the ld. CIT(A) dismissed the grounds and upheld the addition made by the Assessing Officer.
Before us, the ld. counsel for the assessee vehemently argued that the notices were sent to the Chartered Accountant’s email address and the appellant was not aware of any notices issued which led to non-compliance. He further argued that though the assessment order is made u/s 143(3) of the Act, it should have been u/s 144 of the Act as no compliance was made.
8. Per contra, the ld. DR fairly conceded that the orders of the ld. CIT(A) are ex- parte.
Having heard the rival submissions, we are of the considered view that the appellant was not aware of the assessment proceedings before the lower authorities which resulted in ex-parte orders from both the lower authorities. Therefore, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the Assessing Officer. The Assessing Officer is directed to decide the appeal afresh after affording a reasonable and adequate opportunity of being heard to the assessee. The appellant is also directed to provide necessary information/documents as required by the authorities.
In the result, the appeal of the assessee in is allowed for statistical purposes.
The order is pronounced in the open court on 15.04.2024.