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Facts
The Assessing Officer made an addition of Rs. 16,44,437 to the assessee's income on account of unexplained credit entries in the bank account. The assessee failed to provide compliance or documents during the first appeal before the Commissioner, leading to an ex-parte decision affirming the addition.
Held
The Tribunal noted that while the assessee's conduct was not reasonable, the CIT(A) failed to decide the issue properly due to the lack of documents. Therefore, to ensure substantial justice, the Tribunal set aside the impugned order and remanded the case back to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) correctly decided the appeal ex-parte without proper consideration of the issue due to non-compliance by the assessee, and whether the case should be remanded for fresh adjudication.
Sections Cited
144, 147
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Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.
Before: Shri Narender Kumar Choudhry (JM) & Smt. Renu Jauhari (AM)
As the issue involved in both the appeals are identical, therefore for the sake of brevity, we are inclined to decide these appeals under consideration by this composite order and by taking into consideration as a lead case, result of the same shall apply mutatis mutandis to both appeals under consideration.
In this case, the Assessing Officer vide assessment order dated 5.12.2018 under section 144 read with section 147 of the Income Tax Act (in short “Act”) made the addition of Rs. 16,44,437/- on account of credit entries made in the bank account maintained during assessment year under consideration, which remains as unexplained and consequently added the same in the income of the assessee.
The assessee being aggrieved with the assessment order and making the addition by the Assessing Officer preferred first appeal before learned Commissioner who though afforded various opportunities by sending notice and fixing the case for hearing, however, the assessee made no compliance. Therefore, in the constrained circumstances, specifically in the absence of any reply/documents which the assessee failed to file, decided the appeal as ex-parte and ultimately affirmed the addition by dismissing the appeal of the assessee. Though conduct of the assessee does not seems to be reasonable, however, considering the peculiar facts and circumstances, as the learned Commissioner in the absence of relevant reply/documents which the assessee has failed to file, failed to decide the issue in its right perspective and in proper manner and therefore for the just decision of the case and for substantial justice, we inclined to set aside the impugned order and consequently remanding the instant case to the file of the ld. CIT(A) for decision afresh subject to deposit of Rs. 2000/- in the account of Prime Minister National Relief Fund (PMNRF) within 15 days from receipt of this order. Suffice to say, the learned Commissioner shall afford reasonable opportunity to the assessee to substantiate its claim. 4. We also direct the assessee to cooperate with the appellate proceedings and file the relevant reply/documents as would be essential/required by the ld. Commissioner for proper decision of the case. We clarify that in case of further default, the assessee shall not be entitled for any leniency.
Consequently, the appeal filed by the assessee i.e. is allowed.
In the result, both the appeals filed by the assessee under consideration are allowed on the same terms as enumerated in the judgement of .
Order pronounced in the open court on 30th May, 2024.