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Facts
The assessee appealed against an ex parte order of the CIT(A) dated 08/08/2024 for AY 2017-18, which confirmed an addition made by the Assessing Officer for unexplained cash deposits. The assessment was completed ex parte under Section 144 of the Income Tax Act, 1961. The assessee claimed a lack of fair opportunity, while the revenue contended non-compliance with notices.
Held
The tribunal observed that despite multiple opportunities, the assessee did not comply, leading to ex parte orders where the merits were not substantially adjudicated. Applying principles of natural justice and considering tax laws as welfare legislation, the tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication. The CIT(A) is directed to provide a reasonable opportunity of hearing, and the assessee is advised to be more vigilant in future compliance.
Key Issues
Whether ex parte assessment and appellate orders, issued due to the assessee's non-compliance, should be sustained, or if the matter warrants a fresh hearing on merits under principles of natural justice.
Sections Cited
Section 144 of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, RANCHI BENCH(SMC
Before: SHRI PARTHA SARATHI CHAUDHURY
Assessee represented by Shri Devesh Poddar, Adv. Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 06/01/2025 Date of pronouncement 06/02/2025 O R D E R PER: PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER: 1. This appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 08/08/2024 for the Assessment Year (AY) 2017-18 as per the grounds of appeal on record.
2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the ld. CIT(A) has not given fair and reasonable opportunity to the assessee. Assessment was completed on 07/11/2019 under Section 144 of the Income Tax Act, 1961 (in short, the Act). The Assessing Officer has passed assessment order in ex parte proceedings. The Assessing Officer while passing the assessment order, made addition on account of unexplained cash deposits. The ld. CIT(A) has also confirmed the addition made by the Assessing Officer by passing ex parte order. The ld. AR of the assessee submits that the assessee has good case on merit and is likely to succeed if one more opportunity is provided. The ld. AR of the assessee submits that he undertakes on behalf of assessee to be more vigilant in future in making compliance and prayed to restore the matter back to the file of ld. CIT(A).
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of the revenue authorities. The ld. Sr. DR for the revenue submits that the notices issued by the revenue authorities have not been complied by the assessee. The assessee is very casual in making compliance.
I have given careful consideration to the relevant documents on record and the submissions of the both the parties. It is observed that total four opportunities were given for hearing to the assessee by the ld. CIT(A). I also observe that the Assessing Officer has also passed assessment order under Section 144 of the Act. Therefore, the rights and liabilities of the parties herein have not been adjudicated substantially. It is correct that reasonable opportunities have been provided to the assessee by the revenue authorities, still, there was no compliance. The facts remain that the income tax laws are within the ambit of welfare legislation which are absolutely separate from penal legislation and therefore, given the facts and circumstances and as per applicable law, benefit of doubt has to be attributed to the assessee/tax payer. There may be circumstances beyond the control of assessee or "vis major" because of which the assessee may not have able to comply with the notices before the revenue authorities. Under the given facts on record, which cannot be said that such non-compliance was deliberate or malafide on the part of assessee. Therefore, in the interest of principles of natural justice, I am inclined to provide one final opportunity to the assessee and accordingly the order of NFAC/ld.CIT(A) is set aside and the matter is remanded back to the file of ld. CIT(A) to pass order afresh in accordance with law. Needless to direct that before passing the order on merit, the ld. CIT(A) shall grant reasonable opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and in making proper compliance and not to make any default in responding to the notices issued by the ld. CIT(A). As per the above terms, the grounds of appeal
raised by the assessee stands allowed for statistical purposes only.