INTEKHAB HUSAIN,MORADABAD vs. INCOME TAX OFFICER 2(1), MORADABAD - NEW

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ITA 3877/DEL/2023Status: DisposedITAT Delhi20 February 2024AY 2017-18Bench: SHRI KUL BHARAT (Judicial Member)4 pages
AI SummaryRemanded (Allowed for statistical purposes)

What did the Tribunal hold?

The Tribunal acknowledged the assessee's claim of not receiving the assessment notices. To uphold principles of natural justice and ensure fairness, the Tribunal set aside the orders of the lower authorities. The matter was restored to the Assessing Officer for a de novo assessment, with a directive to provide the assessee a proper opportunity to be heard and present their case.

What were the facts?

For AY 2017-18, the AO completed an ex-parte assessment under Section 144 of the Income Tax Act, 1961, as the assessee did not respond to notices under Section 142(1). This led to additions of Rs. 25,22,000 under Section 69A for cash deposits made during demonetization and Rs. 3,62,000 under Section 44AD. The CIT(A) upheld the AO's order, leading the assessee to appeal to the Tribunal, primarily contending non-receipt of notices and denial of natural justice.

What were the issues?

Whether the ex-parte assessment under Section 144 was valid given the assessee's claim of non-receipt of notices, and if the assessee was afforded adequate opportunity of being heard.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 144,Section 69A,Section 44AD,Section 115BBE,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI

Before: SHRI KUL BHARAT

For Appellant: Shri Neeraj Jain, CA &, Shri P.K. Mishra, CA
For Respondent: Shri Om Parkash, Sr. DR
Hearing: 20.02.2024Pronounced: 20.02.2024

O R D E R PER KUL BHARAT, JM:

This appeal, preferred by the assessee, is directed against the order of the learned CIT (A), National Faceless Appeal Centre (NFAC), Delhi, dated 07.11.2021, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:

“1. That the order of learned Commissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case.

2.

That the learned Commissioner of Income Tax (Appeals), has erred in stating that adequate opportunity of being heard was given to the appellant in the assessment proceedings.

3. That the learned Commissioner of Income Tax (Appeals) has erred in passing the order u/s 250 without providing any proper opportunity of being heard to the appellant. 4 That the learned Commissioner of Income Tax (Appeals), has erred in upholding the decision of the assessing officer of estimating the net profit of Rs. 3,62,000/- at the rate of 8% on cash deposits of Rs. 45,25,500/-.

5. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the addition of Rs. 25,22,000/- u/s 69A treating the same as unexplained money.

6. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the invocation of section 115BBE of the Act on the addition of Rs. 25,22,000/- u/s 69A 7. The above grounds of appeal

are without prejudice to each other.

8. The Appellant craves leave to add, alter, amend and/or modify the above grounds of appeal.”

2. Facts, in brief, are that for A.Y. 2017-18 the AO has noticed that since the assessee did not response to the notice issued u/s 142(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), the case of the assessee was selected for scrutiny assessment u/s 144 of the Act on the basis that during demonetization period the assessee had cash deposits of Rs. 25,22,000/-. Vide order dated 03.12.2019 made u/s 144 of the Act, the AO completed the assessment at Rs. 28,84,000/- by making addition of Rs. 25,22,000/- u/s 69A and Rs. 3,62,000/- u/s 44AD of the Act. Aggrieved against it the assessee preferred appeal before the learned CIT(A) who dismissed the appeal by affirming the action of the AO.

Aggrieved against this, now the assessee is in appeal before this Tribunal.

3.

Learned counsel for the assessee at the outset submitted that no notice issued by the AO u/s 142(1) or 144 of the Act was ever received by the assessee and therefore, there was no occasion for the assessee to represent its case before the assessing authority. He submitted that in appeal the learned CIT(A) was not justified in observing that assessee was given adequate opportunity during assessment proceedings. He prayed that orders of the authorities below may be set aside and the matter may be restored to the file of AO for assessment afresh after affording reasonable opportunity to the assessee to represent its case.

4.

Learned DR supported the orders of authorities below.

5.

I have heard rival submissions and perused the material available on record.

The stand of the assessee is that notices issued by the AO were not received by him. Looking to the above facts, in order to subserve the interests of natural justice and to be fair to both the parties, I am inclined to set aside the orders of authorities below and restore the matter to the file of AO for assessment de novo after affording adequate opportunity to the assessee to represent its case. Grounds are allowed for statistical purposes.

6.

Appeal of the assessee is allowed for statistical purposes only.

Order pronounced in open court on 20th February, 2024.

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