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Facts
The assessee filed an appeal challenging the order of CIT(A) which confirmed the validity of reopening of assessment and additions. The appeal was initially disposed of ex-parte but was later restored. The assessee claimed that they were unaware of notices due to closure of business and relocation. Additional evidences were submitted.
Held
The Tribunal found that there was a reasonable cause for the assessee's non-appearance before the tax authorities. The additional evidences submitted were admitted. The order of CIT(A) was set aside.
Key Issues
Whether there was a reasonable cause for the assessee's non-appearance before the tax authorities and whether additional evidences should be admitted and the matter restored to the AO.
Sections Cited
144
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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: HON’BLE JUSTICE (RETD.) C V BHADANG & SHRI BR BASKARAN
The assessee has filed this appeal challenging the order dated 30.11.2023 passed by the Ld. CIT(A), NFAC, Delhi it relates to assessment year 2017-18.
The assessee is aggrieved by the decision of the Ld. CIT(A) in The assessee is aggrieved by the decision of the Ld. CIT(A) in The assessee is aggrieved by the decision of the Ld. CIT(A) in confirming the validity of reopening confirming the validity of reopening of assessment and also of assessment and also additions made by the AO. made by the AO.
This appeal was earlier was earlier disposed of by the Co-ordinate Bench ordinate Bench, vide its order dated 08.05.2024 vide its order dated 08.05.2024 passed ex-parte, since none parte, since none appeared on behalf of the assessee appeared on behalf of the assessee. Since the above said order . Since the above said order was passed ex-parte, the assessee moved , the assessee moved a Miscellaneous petition a Miscellaneous petition, which was numbered numbered as MA No. 196/Mum/2024, seeking seeking recall of the ex-parte order passed by the Tribunal. Accordingly, the parte order passed by the Tribunal. Accordingly, the parte order passed by the Tribunal. Accordingly, the Tribunal, vide its order dated 23.09.2024 vide its order dated 23.09.2024, recalled above said order recalled above said order and the appeal was restored back restored back. Accordingly, this appeal came this appeal came to be placed before this Bench. before this Bench.
The Ld. AR submitted that the Assessing Officer The Ld. AR submitted that the Assessing Officer The Ld. AR submitted that the Assessing Officer has passed the order to best of his of his judgment u/s 144 of the Act judgment u/s 144 of the Act, since the assessee did not appear before him. He submitted that the Ld. assessee did not appear before him. He submitted that the Ld. assessee did not appear before him. He submitted that the Ld. CIT(A) has also passed ex also passed ex-parte order because of failure of the parte order because of failure of the assessee to represent before assessee to represent before him.
The Ld. AR submitted that the assessee was engaged in the submitted that the assessee was engaged in the submitted that the assessee was engaged in the business of export of business of export of various items and it suffered heavy losses suffered heavy losses in that business. Hence Hence the assessee closed the business business about three years back. Further, all the urther, all the directors shifted their residence their residence to Gujarat. He further submitted that the fact that assessee has closed He further submitted that the fact that assessee has closed He further submitted that the fact that assessee has closed down his business three years back has also been confirmed by the business three years back has also been confirmed by the business three years back has also been confirmed by the report given by the Inspector who carried out the physical report given by the Inspector who carried out the physical report given by the Inspector who carried out the physical verification address of the assessee. verification address of the assessee.Hence, the assessee/ di assessee/ directors were not aware of the notices issued by the Assessing Officer as well were not aware of the notices issued by the Assessing Officer as well were not aware of the notices issued by the Assessing Officer as well as the Ld. CIT(A). He submitted that the s the Ld. CIT(A). He submitted that the earlier tax consultant tax consultant also did not inform the assessee about the proceedings. The Ld. AR did not inform the assessee about the proceedings. The Ld. AR did not inform the assessee about the proceedings. The Ld. AR submitted that the assessee has actually incurred losses in this submitted that the assessee has actually incurred losses submitted that the assessee has actually incurred losses year. The Ld. AR submitted that the assessee has incurred lo The Ld. AR submitted that the assessee has incurred lo The Ld. AR submitted that the assessee has incurred losses in the succeeding year also and it has been accepted by the AO. in the succeeding year also and it has been accepted by the AO. in the succeeding year also and it has been accepted by the AO.
6. The Ld A.R submitted that, s 6. The Ld A.R submitted that, since the assessee could not ince the assessee could not represent before the tax authorities, it has represent before the tax authorities, it has filed various documents filed various documents before the Tribunal as additional evidences before the Tribunal as additional evidences in support in support of return of income. He prayed that the addition He prayed that the additional evidences may be admitted may be admitted and all the issues may be may be restored back to the Assessing Officer for restored back to the Assessing Officer for examining them afresh. m afresh.
We have heard the Ld. DR and perused the record. Having We have heard the Ld. DR and perused the record. Having We have heard the Ld. DR and perused the record. Having regard to the submissions m regard to the submissions made by the Ld A.R, we are of the view we are of the view that there was a reasonable cause for the assessee for not that there was a reasonable cause for the assessee that there was a reasonable cause for the assessee appearing before the tax authorities. Before us, appearing before the tax authorities. Before us, the assessee has the assessee has filed various documents in the form of additional evidences, since filed various documents in the form of additional evidences, since filed various documents in the form of additional evidences, since they could not be filed be they could not be filed before the tax authorities. In the facts of the fore the tax authorities. In the facts of the case discussed above, we are of the view they should be admitted case discussed above, we are of the view they should be admitted case discussed above, we are of the view they should be admitted and accordingly admit them. and accordingly admit them. Since these evidences Since these evidences require examination at the end of the AO examination at the end of the AO, we set aside the order passed by we set aside the order passed by the Ld. CIT(A) and restore all the issue restore all the issues to the file of the AO for to the file of the AO for examining them afresh. We also direct the assessee to fully co afresh. We also direct the assessee to fully co- afresh. We also direct the assessee to fully co operate with the Assessing Officer for expeditious Assessing Officer for expeditious completion of the completion of the assessment.
In the result, the appeal filed by the assessee is In the result, the appeal filed by the assessee is In the result, the appeal filed by the assessee is treated as allowed.
Order pronounced in the open Court on nounced in the open Court on 21/11/2024. /11/2024.