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Facts
The assessee filed an appeal against the order of the CIT(A) which dismissed the assessee's appeal in default. The assessee had declared total income of Rs. 2,98,080/- for AY 2017-18. During a survey, the assessee's tax practitioner admitted to suppression of income in returns. Subsequently, notices were issued under section 148A and 148 of the Income Tax Act, to which the assessee did not respond. The Assessing Officer assessed the total income at Rs. 3,69,326/-.
Held
The Tribunal noted that the CIT(A) dismissed the assessee's appeal in default after the assessee failed to appear on multiple occasions despite notices. However, considering the principles of natural justice and fair play, the Tribunal decided to remit the matter back to the CIT(A) for adjudication on merits.
Key Issues
Whether the CIT(A) order dismissing the appeal in default was justified, and whether the principles of natural justice were followed in issuing notices and providing an opportunity to be heard.
Sections Cited
250, 133A, 148, 148A, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH
(Assessment Year : 2017–18) Jitendra Salunke Vs. Income-tax Officer-42(2)(3) B/4 72, Tenament, Kautilya Bhavan, Vithhal Chavan Bandra Kurla Complex, Marg, Bandra (East), Near Damodar Hall, Mumbai-400051. Parel, Mumbai-400012. PAN/GIR No. AVAPS2290K (Appellant) .. (Respondent) Assessee by Shri. Poojan Mehta Revenue by Shri. R. R Makwana, Sr. DR Date of Hearing 03/09/2024 Date of Pronouncement 03/09/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 30.04.2024 passed in Appeal no. NFAC/2016- 17/10315473 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 Jitendra Salunke Assessment year [A.Y.] 2017-18, wherein learned CIT(A) has dismissed assessee’s first appeal in default of assessee.
The brief facts of the appeal state that appellant assessee filed its return of income through Shri Vijay Sawant, Tax Practitioner for A.Y. 2017-18 declaring total income of Rs. 2,98,080/-. During the survey u/s. 133A of the Act, Shri Vijay Sawant, in his statement recorded on 30.01.2018, admitted that in many returns filed through him for salaried persons, income under the head salaries was suppressed by excluding and/or misreporting the deductions/exemptions against the salary. Notice issued to assessee u/s. 148 of the Act was treated to be a notice u/s. 148A(b) in accordance to the Finance Act 2021 as directed by Hon’ble Supreme Court vide order dated 04.05.2022 passed in Civil Appeal No. 3005/2022 in UOI and others V Shri Ashish Agarwal and others. Further notice u/s. 148A(b) dated 15.04.2021 was issued and served upon the assessee. Assessee did not respond to the notice. Subsequently an order u/s. 148A(d) of the Act dated 19.07.2022 was passed with the prior approval of the competent authority. Notice u/s. 148 of the Act dated 22.07.2022 was also issued and served upon the Jitendra Salunke assessee. Assessee did not respond, hence notice u/s. 142(1) dated 17.01.2023 was issued but for no avail. Learned assessing officer assessed the total income u/s. 144 of the Act at Rs. 3,69,326/-. Aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A) who dismissed assessee’s appeal in default of assessee.
Assessee filed this second appeal before the Tribunal on the ground that the notices to the assessee were not sent through NFAC and the impugned order has been passed in violation of the principles of natural justice.
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 DR has submitted that assessee was provided sufficient opportunity of hearing by issuance of notices on four occasions by learned CIT(A) but for no avail. Learned DR has supported impugned order passed by the first appellate authority.
Jitendra Salunke 7. Perusal of the impugned order shows that assessee filed first appeal with the delay of about 260 days. Learned CIT(A) condoned the said delay on the basis of reasons stated in form 35. The first appellate authority issued notices to the assessee on four different occasions but for no avail. Learned CIT(A) dismissed the first appeal in default of assessee.
We notice that learned CIT(A) was expected to state the points for determination, the decision there on and the reasons for the decision as provided u/s. 250(6) of the Act. We are conscious of the fact, that assessee has not turned up before the first appellate authority in response to the notices issued on four different occasions. However, in the interest of justice and fair play, we deem it appropriate to remit the matter back to the file of learned CIT(A) for denovo adjudication on merit. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the first appellate authority for the expeditious and effective disposal of the appeal. Assessee should refrain from seeking any adjournment but for compelling and unavoidable reasons. Needless to say that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear Jitendra Salunke that we have not made any observation on the merits of the case. The appeal is thus liable to be allowed.
In the result, the appeal is allowed. Impugned order dated 30.04.2024 is set aside. The case is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 03.09.2024. Sd/- Sd/- (NARENDRA KUMAR BILLAIYA) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 03/09/2024 Anandi Nambi, Steno Copy of the Order forwarded to: