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Facts
The assessee appealed an ex-parte order of the NFAC, which upheld an addition of Rs. 10,62,665/- made by the AO on account of bogus/paper/shell companies. The assessee failed to make compliance before the Ld. Commissioner despite multiple opportunities, citing Covid-19 period for lenient view, which was not substantiated.
Held
The Tribunal observed that both the AO's and the Ld. Commissioner's orders were ex-parte. Despite the assessee's failure to provide reasons for non-compliance, the Tribunal, considering the circumstances and to ensure substantial justice, decided to remand the case to the AO.
Key Issues
Whether the ex-parte assessment and appellate orders should be set aside and the case remanded for fresh adjudication, considering the failure of compliance by the assessee.
Sections Cited
250 of the Income Tax Act, 1961, 147 r.w.s 144B of the Act
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI OMKARESHWAR CHIDARA
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 19.12.2023, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2016-17.
In the instant case the Assessing Officer (AO) vide order dated 29.03.2022 u/s 147 r.w.s 144B of the Act has made the addition of Rs.10,62,665/- on account of entry from bogus/paper/shell companies. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner, however, in spite of affording four opportunities the M/s. Premchand Motichand Gosrani Assessee made no compliance. Therefore, the Ld. Commissioner in the absence of relevant evidence and reply which the Assessee has failed to file, in the constrained circumstances decided the appeal of the Assessee as ex-parte and dismissed the same on non prosecution and consequently affirmed the aforesaid addition.
The Assessee being aggrieved is in appeal before us. We have given thoughtful considerations to the peculiar facts and circumstances of the case. We observe that both the orders passed by the authorities below are ex-parte. The Assessee has claimed that the notices were issued by the AO during the corona/Covid-19 period and therefore lenient view may be taken, whereas the Assessee failed to demonstrate the plausible reason for not making the compliance before the Ld. Commissioner and therefore the Assessee do not deserve any leniency. However considering the peculiar facts and circumstances in totality as in the absence of reply and relevant documents which the Assessee failed to file, the issue involved in this case remained to be adjudicated its right perspective and proper manner, therefore, for the just decision of the case and for substantial justice, we are inclined to remand the instant case to the file of the AO, as the case remained un- represented during the assessment proceedings as well due to Covid- 19. Consequently, the case is remanded to the file of the AO, however, subject to deposit of Rs.1,000/- in the Revenue Department under “other head”. Suffice to say, the AO shall afford reasonable opportunity of being heard to the Assessee and allow to file the relevant documents in support of his claim. We clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency. Thus, the case is remanded to the file of the AO accordingly.
Order pronounced in the open court on 30.08.2024.