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Facts
The assessee, engaged in diamond trading, filed his return for AY 2014-15. The AO rejected the assessee's books of accounts and made additions based on alleged accommodation entries, determining a higher total income.
Held
The ITAT observed that the assessee challenged the additions but was non-compliant throughout the appellate proceedings, leading to an ex parte order by the CIT(A). The Tribunal held that the assessee should be given one more opportunity to present their case.
Key Issues
Whether the ex parte order of the CIT(A) violated principles of natural justice, and if the case should be remanded for de novo adjudication.
Sections Cited
250 of the Income Tax Act, 1961, 143(2) of the Act, 142(1) of the Act, 143(3) of the Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI AMARJIT SINGH, AM & MS. KAVITHA RAJAGOPAL, JM Shripalchand Mohanlal Chouhan
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15.
The assessee has challenged the ex parte order of the ld. CIT(A) on the violation 2. of principles of natural justice and has also challenged the additions/disallowances made by the learned Assessing Officer (ld. A.O. for short) and confirmed by the ld. CIT(A) along with the other grounds of appeal.
The brief facts are that the assessee is an individual and had filed his return of income on 30.11.2014, declaring total income at Rs.4,05,420/-. The assessee’s case was (AY 2014-15) Shripalchand Mohanlal Chouhan vs. ITO selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee.
The ld. Assessing Officer ('A.O.' for short) observed that the assessee was engaged in trading business of diamonds with a turnover of 183.45 crores having a meager administrative expenses of Rs.2,46,428/-, rejected the books of accounts of the assessee as being bogus and fictitious. The ld. A.O. then passed by the assessment order u/s. 143(3) of the Act dated 28.12.2016, determining total income at Rs.1,87,50,440/- after making an addition of Rs.1,83,45,020/- as undisclosed commission income @ 1% on the total sale consideration of Rs.183,45,02,068/- which is alleged to be accommodation entries without any activity of genuiene business of diamond trading by the assessee.
The assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide an ex parte order dated 11.12.2023, upheld the order of the ld. A.O. for the reason that inspite of several opportunity the assessee has failed to substantiate his claim and has been non compliant throughout the appellate proceedings.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard learned Departmental Representative (ld. DR for short) and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has been non compliant throughout the appellate proceeding.
(AY 2014-15) Shripalchand Mohanlal Chouhan vs. ITO
The learned Departmental Representative ('ld.DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunity by the ld. CIT(A) which was not availed by the assessee.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on his side.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 31.07.2024.