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Facts
The assessee filed a return declaring Nil income after claiming exempt agricultural income of Rs.2,57,24,254. The case was selected for scrutiny, but the assessee failed to respond to notices issued by the AO due to the COVID-19 pandemic. Consequently, an ex-parte assessment was completed under Section 144, and the entire agricultural income was treated as taxable.
Held
The Tribunal acknowledged that the assessee could not respond to notices due to COVID-19 and that the notices from the CIT(Appeals) might not have been received. In the interest of justice, the matter was remitted to the AO for fresh consideration.
Key Issues
Whether the ex-parte assessment order passed under Section 144 is justified when the assessee failed to respond to notices due to reasons attributable to the COVID-19 pandemic.
Sections Cited
144, 10(1)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K., JUDCIIAL MEMBER
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the order dated 21.12.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2018-19 challenging the ex-parte order.
Briefly stated the facts are that the assessee filed its return of income on 31.10.2018 declaring total income at Nil after claiming exempt income of Rs.2,57,24,254. The case was selected for scrutiny and statutory notices were issued to the assessee. The case was migrated to National e-Assessment Centre, Delhi. Notice u/s. 142(1) was issued on 19.11.2020 and detailed questionnaires were issued to the assessee. Thereafter another notice u/s. 142(1) was issued. But all the notices remained unresponded. The assessee was given ample opportunities for providing land holding record, lease agreements if any, documentary evidence with regard to claim of various expenses and other information, but these information were never furnished to the AO. Accordingly assessment was completed u/s. 144 of the Act and assessed income at Rs.2,57,74,254 on 26.02.2021.
Aggrieved by the order of the AO, the assessee filed appeal before the CIT(Appeals) on 06.02.2022. The ld. CIT(Appeals) issued various notices fixing hearing on 03.11.2023, 21.11.23 and 20.12.2023, but there was no response from assessee’s side. Accordingly he confirmed the order of the AO. Aggrieved, the assessee is in appeal before the ITAT.
The ld. AR submitted that case was selected for scrutiny and statutory notices were issued to the assessee during the COVID-19 period due to which the notices were not responded by the assessee. The AO has passed ex parte order u/s. 144 and he has not given any exemption u/s. 10 in respect of agricultural income. In the previous assessment year the AO accepted the agricultural income and allowed exemption. He further submitted that the notices issued by the CIT(Appeals) could not be received by the assessee and could not be responded. He requested 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 since both the authorities had given various opportunities to the assessee.
Considering the rival submissions, we note that assessee has claimed agricultural income of Rs.2,57,24,254 as exempt u/s. 10(1). During assessment proceedings the assessee could not respond to the notices issued by AO due to COVID 19 as submitted by the ld. AR and the AO completed assessment u/s. 144 of the Act 26.02.2021. Considering the submission of the ld. AR that during the first appellate proceedings, the notices issued could not be seen by the assessee, in the interest of justice, we remit the issue to the AO 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 by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 01st day of July, 2024.