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Facts
The assessee, Lata Sriram, did not file a return of income for AY 2011-12. The Assessing Officer (AO) received information about share and commodity trading, credit card payments, and professional fees, believing income had escaped assessment. Notices were issued, but there was no response, leading the AO to make additions under section 144 and assess total income at Rs. 1,77,18,876.
Held
The assessee appealed to the CIT(A), who dismissed the appeal ex-parte due to non-compliance with notices. The Tribunal, considering principles of natural justice, set aside the CIT(A)'s order and remitted the issues back to the CIT(A) for fresh adjudication, providing the assessee with an opportunity to be heard.
Key Issues
Whether the additions made by the AO and sustained by the CIT(A) were justified, considering the assessee's non-compliance and the principles of natural justice.
Sections Cited
144, 147, 250, 142(1), 133(6), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A”BENCH
Before: SHRI PAVAN KUMAR GADALE & SHRI GIRISH AGRAWAL
सुनवाई क� तार�ख/Date of Hearing 29.07.2024 घोषणा क� तार�ख/Date of Pronouncement 30.07.2024 ORDER PER PAVAN KUMAR GADALE, JM: “ The appeal is filed by the assesse against the order of National Faceless Appeal Centre (NFAC), Delhi / (CIT(A) passed u/sec 144 r.w.s147 and u/sec 250 of the Act.
Your appellant submits that the Assessing Officer is not justified in working out the income of Rs.1,63,39,203/- against NIL income. The Assessing Officer has not considered the submissions and has computed profit from share transactions without considering the loss in respect of broker Alfa Commodities and prime broker company which amounts to Rs.2,58,70,506/- (Rs.13,81,061/- + Rs.2,44,89,445/-). The Assessing Officer has only considered and estimated profit on the basis of few documents available to him without giving proper opportunity of being heard. Further, there were carried Lata Sriram, Mumbai forward losses of preceding previous years which Assessing Officer failed to consider while completing the assessment.
Your appellant submits that the Assessing Officer is not justified in disallowing cash deposit, professional fees, interest income and unexplained credit card expenses without giving proper opportunity of being heard.
Your appellant prays that the additions made by Assessing Officer be dropped.
Your appellant craves to leave, to add, to alter, amend or delete any of the grounds of appeal
2. The brief facts of the case are that, the assessing Officer (A.O) has received information that the assessee has made transactions of shares and commodities trading, credit card payments of Rs.2,13,385/- and received professional fees and interest of Rs. 5,66,288/- in the F.Y 2010-11.Since the assessee has not filed the return of income and the AO has reason to believe that the income has escaped assessment and issued notice u/sec 148 of the Act. Subsequently the AO has issued notice u/sec 142(1) of the Act and there was no response. Therefore the A.O has dealt on the various factual aspects and also the issued notice u/s 133(6) on the Stock Exchange asking for details of transaction under taken by the assessee in the F.Y 2010-11. Since there was no reply from the assessee even after issuing the show cause notice, the AO considering the information available on record has invoked the provisions of section 144 of the Act and made addition of professional fee, income estimated on commodity trading and unexplained credit card payments
Lata Sriram, Mumbai and finally assessed the total income of Rs. 1,77,18,876/- and passed the order u/sec 144 r.w.s147 of the Act dated 20.12.2018.
3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no proper compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has sustained the additions made by the A.O. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
4. At the time of hearing none appeared on behalf of the assessee and the Ld. DR supported the order of the CIT(A).
We heard the Ld.DR submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no proper compliance in spite of providing adequate opportunity of hearing and the notices were issued on various dates but there was no proper compliance to the notices. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld. CIT(A) has issued the notices of hearing but there was no proper due compliance and thus the Ld.CIT(A) came to a conclusion that the assessee is not Lata Sriram, Mumbai interested and decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the additions made by the A.O and there could be various reasons for non submissions of details which cannot be overruled. Therefore, considering the facts and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the Appeal. Accordingly, we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30.07.2024