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Facts
The assessee, a dealer of milk and milk products, had an ex parte order passed against them by the CIT(Appeals) for non-prosecution. The AO had reopened the case under sections 147/148 and assessed income based on 8% net profit on an undisclosed bank account transaction, disallowing a deduction under Chapter VIA.
Held
The Tribunal noted that the appeal was filed belatedly and condoned the delay. The assessee's AR claimed that notices might have gone to the spam folder and requested a chance to present their case. Considering the rival submissions and in the interest of justice, the Tribunal decided to remit the issue back to the CIT(Appeals) for fresh consideration.
Key Issues
Whether the assessee should be given an opportunity to present their case before the CIT(Appeals) after an ex parte order was passed due to non-prosecution.
Sections Cited
147, 148, 143(3), 142(1), Chapter VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the ex parte order dated 05.04.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2018-19 for non-prosecution by the assessee.
Briefly stated the facts of the case are that the assessee is a dealer of milk and milk products. The case was reopened after issue notice u/s. 147/148 after recording reasons. It was noticed that the assessee had maintained bank account in Bank of Baroda, Gangavathi relevant to AY 2018-19 and there is transaction amount of Rs.1,35,68,567 which were not recorded in the books of account of assessee. Even during the course of assessment proceedings u/s. 143(3), the assessee was issued notice u/s. 142(1) also. But the assessee was unable to substantiate its case even after granting ample opportunities to the assessee. Accordingly the AO applied 8% net profit on the amount of Rs.1,35,68,567 which was calculated at Rs.10,85,485. Further the AO noted that the assessee has claimed deduction under Chapter VIA of Rs.7,750 and it was also not allowed for want of evidence. Accordingly the AO assessed income at Rs.17,81,580. Aggrieved from the above order the assessee filed appeal before the First Appellate Authority (FAA).
The ld. FAA issued various notices on different dates for substantiating its claim as made in the grounds of appeal. However, even though sufficient opportunities were granted, the assessee did not take any advantage of the notices issued by ld. FAA, therefore the ld. FAA was bound to decide the issue on the basis of documents available before him ex parte. Aggrieved, the assessee is in appeal before the ITAT.
The ld. AR submitted that the notices were issued online which might have served in the spam folder of email, therefore it could not be seen by the assessee, however there was no intention to disregard the notices issued by the CIT(Appeals) and he submitted that if a that if a chance is given to the assessee, he undertook to respond to the notices and substantiate the case of the assessee with evidence before the lower authorities.
The ld. DR relied on the order of lower authorities and objected to sending back the matter to lower authorities.
We noted that the assessee has filed appeal belatedly by 15 days for which the reasons have been explained placed in the appeal set. On going through the same the assessee has explained the reasons for delay of 15 days. Considering the reasons we hereby condoned the delay of 15 days.
Considering the rival submissions and prayer of the assessee and in the interest of justice, we remit the issue to the CIT(Appeals) for fresh consideration and decision as per law. The assessee is directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating his case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency.
In the result, the appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on this 22nd day of August, 2024.