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Facts
The assessee, engaged in the milk supply business, filed its return of income declaring Rs. 2,64,580. A limited scrutiny was initiated due to a large cash deposit of Rs. 84.57 lakhs in the bank account. After accounting for Rs. 25.11 lakhs already disclosed, the difference of Rs. 59,45,258 was added back by the AO under section 68, as unexplained income. The CIT(A) dismissed the appeal due to non-appearance.
Held
The Tribunal observed that notices were sent via email, and the assessee did not appear or comply. However, the provided email IDs differed in Form 35 and Form 36. Due to the ex-parte order without proper participation from the assessee, the Tribunal deemed it fit to restore the matter to the CIT(A).
Key Issues
Whether the CIT(A) correctly dismissed the appeal on grounds of non-appearance without providing sufficient opportunity to the assessee to present its case, especially when email communication details were inconsistent.
Sections Cited
68, 115BBE, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI GAGAN GOYAL
PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of National Faceless Appeal Centre (for short “NFAC”) dated 09.01.2024 u/s. 250 of the Income Tax
Pravin Pandurang Rodge Act, 1961 (in short ‘the Act’) for A.Y. 2016-17. The assessee has raised the following grounds of appeal:-
the CIT Appeals has erred in confirming the addition made by the Assessing Officer amounting to Rs. 59, 45,258/- 2. The CIT Appeals has erred in not considering the fact that notices were not received by the Assessee and no physical notices were sent to the residential address of the Assessee. 3. the Appellant craves leave to add, alter, amends and modifies the aforesaid grounds of appeal
at or any time before the hearing as they may be advised from time to time.
2. The brief facts of the case are that assessee is engaged in the business of milk supplier under the name and style of M/s. Priyanka Milk Agency. The assessee has filed its return of income on 21.10.2016 declaring total income at Rs. 2, 64,580/-. The case was selected for limited scrutiny under CASS to examine the issue of large cash deposit in saving bank account of the assessee. During the year, assessee deposited Rs. 84.57 lakhs in his bank account. Out of this, Rs. 25.11 lakhs were already disclosed in the return of income filed by the assessee. The assessee filed his explanations and replies to explain the difference amount of Rs. 59, 45,258/- (Rs. 84, 57,000/- – Rs. 25, 11,742/-), but the AO was not satisfied with the reply of the assessee and added back the amount of Rs. 59,45,258/- u/s. 68 of the Act chargeable to tax u/s. 115BBE of the Act.
3. The assessee being aggrieved with this order of AO preferred an appeal before the Ld. CIT (A) who in turn dismissed the appeal of the assessee on the ground of non-appearance.
4. We have gone through the order of AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds raised before us. It is observed
Pravin Pandurang Rodge vide para 4.0 of the Ld. CIT (A)’s order that following notices were issued to the assessee, but there was no compliance by the assessee as under:-
Sr. DIN Notice No. Date of Issue Date fixed for hearing No. of Notice 1 ITBA/NFAC/1029692973(1) 12.01.2021 19.01.2021 On 19.01.2021, neither any compliance received nor any adjournment letter was filed. 2 ITBA/NFAC/1035246417(1) 02.09.2021 09.09.2021 On 09.09.2021, neither any compliance received nor any adjournment letter was filed. 3 ITBA/NFAC/F/1056142519(1) 15.09.2023 25.09.2023 On 25.09.2023, neither any compliance received nor any adjournment letter was filed. 4 ITBA/NFAC/F/1056666917(1) 29.09.2023 06.10.2023 On 06.10.2023, neither any compliance received nor any adjournment letter was filed. 5 ITBA/NFAC/F/1057104147(1) 16.10.2023 25.10.2023 On 25.10.2023, neither any compliance received nor any adjournment letter was filed. 6 ITBA/NFAC/F/1057991099(1) 16.11.2023 28.11.2023 On 28.11.2023, neither any compliance received nor any adjournment letter was filed 7 ITBA/NFAC/F/1058302666(1) 29.11.2023 11.12.2023 On 11.12.2023, neither any compliance received nor any adjournment letter was filed 8 ITBA/NFAC/F/1059108485(1) 27.12.2023 05.01.2024 Final opportunity On 05.01.2024, neither any compliance received nor any adjournment letter was filed.
Pravin Pandurang Rodge 5. It is further observed that notices were sent on an e-mail id and the correctness of the same has not been challenged by the assessee. It is observed that in Form No. 35, assessee submitted email ID sairajfinancial@gmail.com whereas in Form No. 36 before us, the email ID given was priyankaprodge35@gmail.com. In view of the fact that appeal order was passed ex-parte, although on merits relying on the records and documents available with him, but as there was no participation at the end of the assessee, we deem it fit to restore the matter to the file of Ld. CIT (A) with a direction to communicate on the email IDs furnished by the assessee in Form No. 35 and 36. The assessee is directed to check its email ID on a regular interval so that progress of the matter before the Ld. CIT (A) can be updated in his records for compliance purposes. In this era of digitization, all the communications are being done on the email addresses of both the sides and the assessee is changing his email id again and again, which creates confusion. With these observations and keeping the fact in mind that there is no finding on the facts of the case and law applicable, appeal of the assessee is allowed for statistical purposes with a direction to the Ld. CIT (A) to provide a reasonable opportunity of being heard to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 14th day of June, 2024.