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Facts
During assessment, an addition of Rs. 45 lakhs was made under Section 69 of the Act for unexplained investment. The assessee's appeal to the CIT(A) was dismissed ex parte despite delay condonation. The assessee has now appealed to the Tribunal.
Held
The Tribunal observed that the appellate order was passed ex parte, and the reasons for non-compliance, due to medical emergencies, were explained by the assessee's affidavit. Considering the principles of natural justice, the assessee was denied a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex parte without affording reasonable opportunity of being heard to the assessee, especially when non-compliance was due to medical emergencies.
Sections Cited
250, 147, 144B, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “J (SMC
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKARShri
Instantappeal of the assesseewas filed against the order of the National Faceless Appeal Centre, Delhi (NFAC) (for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 for Assessment year 2015-16, date of order 12/07/2024. The impugned order was emanated from the order of the Kirtikumar Champalal Mehta Learned Assessment Unit, Income-tax Department(for brevity, the ‘Ld.AO) order passed under section 147 read with section 144B of the Act (in short, ‘the Act)’) date of order 26/12/2023. Brief Facts of the Case:
The facts of the case, in brief, are that during the assessment proceedings, an addition amounting to Rs. 45 lakhs was made under Section 69 of the Act, on account of unexplained investment. The aggrieved assessee subsequently filed an appeal before the Ld. CIT(A), albeit with a delay. The Ld.CIT(A) scheduled a hearing and granted multiple opportunities for compliance during the appellate proceedings. Eventually, the delay in filing the appeal was condoned, but the appeal was decided ex parte. The addition of Rs.45 lakhs was upheld, and the assessee’s appeal was dismissed. Aggrieved by the appellate order, the assessee has preferred the present appeal before this Tribunal.
Arguments by the Assessee:
The Ld. AR submitted that the appellate order was passed ex parte due to non- compliance with the notices issued by the Ld. CIT(A). It was explained that the assessee and his mother were facing medical emergencies during the relevant period, with his mother being admitted to the Intensive Care Unit (ICU) of a hospital. An affidavit executed by the assessee on 18/10/2024 has been filed, detailing the reasons for non-compliance with the notices. The Ld. AR argued that there was a reasonable cause for the assessee’s non-compliance during the appellate proceedings. The Ld. AR prayed for setting aside the matter before the Ld. AO for adjudication.
The Ld. DR acknowledged the assessee’s submissions and did not raise any substantial objections to the same.
Observations and Decision:
We have carefully considered the rival submissions and the materials placed on record. The alleged appellate order was admittedly passed ex parte. The reasons for non-compliance during the appeal proceedings have been explained by the Ld. AR through an affidavit duly executed by the assessee. After reviewing the explanation, we are of the opinion that the assessee was denied a reasonable opportunity of being heard. In the interest of natural justice, we deem it appropriate to remit the matter to the file of the Ld. AO for fresh verification de novo.
We also note that the issue pertains to different factual aspects, and the addition of Rs.45 lakhs was made under Section 69 of the Act. Therefore, the matter is remitted back to the Ld. AO for a fresh assessment. Both the Ld. AR and the Ld. DR have expressed their concurrence with this course of action.
Needless to say, the assessee shall be afforded a reasonable opportunity of being heard in the set-aside proceedings. Simultaneously, the assessee is expected to act diligently and cooperate fully in the de novo assessment proceedings.