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Facts
The assessee filed their income tax return for AY 2017-18, which was selected for limited scrutiny. The Assessing Officer found credit card payments of Rs. 5,76,500/- for which the assessee failed to provide documentary evidence, leading to an addition under section 69C of the Income Tax Act. The CIT(A) dismissed the assessee's appeal ex-parte due to non-compliance, thereby confirming the AO's order.
Held
The Tribunal condoned the delay in filing the appeal. Recognizing the principles of natural justice and the assessee's challenge to the addition, the ITAT set aside the CIT(A)'s order. The disputed issues were remitted to the Assessing Officer for fresh adjudication, providing the assessee another opportunity to present evidence and information.
Key Issues
Whether the CIT(A) erred in confirming the addition under section 69C without providing sufficient opportunity of being heard to the assessee. Whether the addition of Rs. 5,76,500/- for unexplained credit card payments was justified.
Sections Cited
143(3), 250, 143(2), 142(1), 144, 69C
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Income Tax Appellate Tribunal, “H (SMC
Before: SHRI PAVAN KUMAR GADALE & SMT RENU JAUHRI
ORDER PER PAVAN KUMAR GADALE, JM: “ The appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi / (CIT(A) passed u/sec 143(3) and u/sec 250 of the Act.
At the time of hearing, the Ld.AR of the assessee submitted that there is a delay in filing the appeal before the Hon’ble Tribunal and filed an application for condo nation of delay . Whereas, the facts mentioned in the affidavit are reasonable and the Ld.DR has no specific
Ashok Kuttappan, Mumbai objections. Accordingly, we condone the delay and admit the appeal. The assessee has raised the following grounds of appeal:
The Ld. CIT(A), Delhi erred in not affording sufficient opportunity of being heard.
2. The Ld. Cit(A), Delhi erred in confirming order of Ld. AO adding Rs. 5,76,500/- 2. The brief facts of the case are that, the assessee is an individual and the assessee has filed the return of income for the A.Y 2017-18 disclosing a total income of Rs. 30.07.2017. Subsequently the case was selected for limited scrutiny under CASS. The Assessing Officer( AO) as per the information received found that the assessee has made credit card payments/ purchases of Rs.5,76,500/- and has failed to provide any documentary evidences in support of payments. Further, notice u/sec 143(2) & u/sec 142(1) of the Act are issued.Since there was no compliance by the assessee, the AO has invoked the provisions of Sec. 144 of the Act and made addition of Rs.5,76,500/- U/sec 69C of the Act and assessed the total income of Rs 8,76,490/- and passed the order u/sec143(3) of the Act dated 16.12.2019.
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 compliance by the assessee. Therefore the CIT(A)
Ashok Kuttappan, Mumbai considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information/details of the assessment proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Per Contra, the Ld.DR supported the order of the CIT(A).
We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no compliance nor appearance in spite of providing adequate opportunity of hearing and the notices were issued. 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 CIT(A) has issued the notices of hearing on 02.02.2021, 21.03.2023, 20.04.2023 & 21.12.2023 referred at Page 3 Para 4.1 of the order but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assessee has raised
Ashok Kuttappan, Mumbai grounds of appeal challenging the addition u/sec69C of the Act made by the A.O and there could be various reasons for non appearance 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 Assessing Officer to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. Accordingly, we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by assessee is allowed for statistical purposes.