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Facts
The assessee's assessment was reopened, and the AO added Rs. 3,10,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, alleging receipt from shell companies providing accommodation entries. The assessee failed to provide details during re-assessment proceedings. The CIT(A) dismissed the assessee's appeal ex-parte due to non-compliance with notices during appellate proceedings.
Held
The ITAT observed that the CIT(A) dismissed the appeal ex-parte without deciding on merits, while also noting the assessee's non-compliance. The Tribunal held that the CIT(A) ought to have decided the issue on merit as per Section 250(6) of the Act. Consequently, the matter was restored to the CIT(A) for fresh adjudication after affording the assessee an opportunity of hearing, with a direction for the assessee to ensure compliance.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without adjudicating on merits, and if the matter should be restored for fresh consideration with an opportunity for the assessee to comply.
Sections Cited
143(3), 147, 68, 250, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH
O R D E R
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
This appeal of the assessee for the assessment year 2012-13 is directed against the order dated 31.01.2024 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’].
Fact in brief is that assessment u/s 143(3) of the Act was passed on 27.03.2015 determining the total income of the assessee at Rs. 74,90,010/-. Subsequently information was received from Investigation Wing DDIT(Inv.), Unit-4(2), Kolkata and DDIT(Inv.), Unit-4(1), Kolkata that assessee had received an amount of Rs. 2,30,00,000/- from M/s. Saptrishi Suppliers Pvt. Ltd. and Rs. 80,00,000/- from M/s. Tribhuvan Dealtrade Pvt. Ltd. aggregating to Rs. 3,10,00,000/-. Both these companies were referred as shell companies providing accommodation entries. The assessee was one of the beneficiaries and had made
M/s. Gryffin Advisory Services Pvt.. Ltd. A.Y. 2012-13 transactions of Rs. 3,10,00,000/- with the aforesaid companies during F.Y. 2011-12 relevant to A.Y. 2012-13. During the course of re- assessment proceedings, the assessee has not submitted any detail except filing return of income declaring total income of Rs. 58,89,117/-. Consequently, the AO has treated the aforesaid sums of Rs. 3,10,00,000/- as unexplained and added u/s 68 of the Act to the total income of the assessee.
Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee holding that assessee has not made any compliance to the notices issued during the course of appellate proceedings.
Heard the ld. DR and perused the material on record. The assessing officer has completed assessment u/s 143(3) r.w.s. 147 of the Act by making an addition of Rs. 3,10,00,000/- as unexplained cash credit u/s 68 of the Act on account of not proving the genuineness of the loan transactions as discussed supra in this order. The ld. CIT(A) has passed the ex-parte order u/s 250 of the Act on the ground that assessee has failed to make any response during the course of appellate proceedings. It is noticed that neither the ld. CIT(A) has decided the appeal of the assessee on merit after taking into consideration the material available in the assessment record nor the assessee has made compliance to the notices issued by the ld. CIT(A). The ld. CIT(A) ought to decide the issue in the appeal on merit as provided u/s 250(6) of the Act after recording reasons on such point in support of his conclusion after considering the material available on record.
In the light of the above facts and circumstances, we consider it appropriate to restore the matter back to the file of the ld. CIT(A) for deciding a fresh as contemplate u/s 250(6) of the Act after affording opportunities of hearing to the assessee. The assessee is also directed to M/s. Gryffin Advisory Services Pvt.. Ltd. A.Y. 2012-13 make due compliance before the ld. CIT(A) without any failure. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11.07.2024.