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Facts
The assessee e-filed a return of income for AY 2018-19, which was selected for limited scrutiny. The Assessing Officer made an addition of Rs. 24,68,645/- to the assessee's total income under section 40A(3) of the Act. The assessee's first appeal against this order was dismissed in default by the CIT(A).
Held
The Tribunal observed that the CIT(A) dismissed the appeal ex-parte without discussing the merits of the case, thereby violating principles of natural justice and section 250(6) of the Income Tax Act. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication on merits, directing the assessee to cooperate diligently.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering the merits and whether such an order violated principles of natural justice and statutory requirements under section 250(6) of the Income Tax Act.
Sections Cited
250, 143(2), 142(1), 40A(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH
Before: SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT & SHRI SUNIL KUMAR SINGH
(Assessment Year : 2018–19) Tejal Nilesh Sorthi Vs. Income Tax Officer Near Civil Court Ward 1, Dahanu Road, Office of the Income Tax Palghar, Officer, 401602. Palghar, 401602. PAN/GIR No. DXVPS5353B (Appellant) .. (Respondent) Assessee by Shri. Sujesh Suratwala (virtually present) Revenue by Shri. R. R. Makwana, Sr. DR Date of Hearing 05/09/2024 Date of Pronouncement 09/09/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 29.01.2024 passed in Appeal no. NFAC/2017- 18/10030780 by the Ld. Commissioner of Income– tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income- tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2018-19, wherein learned CIT(A) has dismissed assessee’s appeal in default of the assessee.
Tejal Nilesh Sorthi 2. The brief facts under appeal state that the assessee e-filed his return of income for A.Y. 2018-19 on 28.12.2018, declaring total income of Rs. 2,31,570/-. The case was selected for limited scrutiny through CASS and notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. After taking uploaded response of the assessee, learned assessing officer added Rs. 24,68,645/- in the total income of the assessee.
Aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A), who dismissed assessee’s first appeal in default of assessee.
Assessee has filed this second appeal on the ground that learned CIT(A) has erred in confirming the addition of Rs. 24,68,645/- u/s. 40A(3) of the Act, contrary to the evidence submitted during the assessment proceedings.
In response to the notice issued by the tribunal, learned DR appeared and participated in the hearing.
We have perused the records and heard learned representatives for both the parties.
Learned representative for the assessee has, at the very outset informed that impugned order has been passed by learned CIT(A) ex-parte in violation of the principles of natural justice. Prayed to set aside the impugned order.
Learned DR has submitted that assessee was provided sufficient opportunity of hearing by learned CIT(A) on seven occasions but for no avail. Learned DR has supported impugned order.
Tejal Nilesh Sorthi 9. We notice that the assessee did not respond to the various notices issued by the first appellate authority. However, it is further noticed that learned CIT(A) passed ex-parte impugned order without any discussion on the merits of the case, whereas learned CIT(A) was expected to state the points for determination, decision thereon and the reasons for the decision as provided u/s. 250(6) of the Act. In the circumstances and in the interest of justice and fair play, we deem it just and appropriate to afford last opportunity to the assessee and remit the matter back to the file of learned CIT(A) for adjudication on merits. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the learned CIT(A) for the expeditious and effective disposal. Assessee should refrain from seeking any adjournment but for compelling and unavoidable circumstances. Needless to say that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation in respect of the merits of the case. The appeal is liable to be allowed.
In the result, the appeal is allowed. Impugned order dated 29.01.2024 is set aside. The case is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 09.09.2024.