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Facts
The assessee filed an appeal against the order passed by NFAC, Delhi. The assessment order was passed in 2019 after the AO issued notices for details regarding cash deposits during demonetisation and increased agricultural income. The assessee sought adjournments before the AO and NFAC/CIT(A) due to various reasons including the COVID-19 pandemic and the need to collect details.
Held
The Tribunal noted that the appeal was dismissed for non-prosecution by NFAC/CIT(A) despite the assessee seeking adjournments. The Tribunal opined that due to the pandemic and the lapse of time, the assessee was unable to present their case properly and adhering to the principles of natural justice, the assessee deserves an opportunity to be heard.
Key Issues
Whether the appeal dismissal for non-prosecution was justified given the circumstances, and whether a remand for fresh consideration is appropriate.
Sections Cited
Section 250 of the Income-tax Act, 1961 (implied, as it deals with appeals to the Commissioner (Appeals))
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC-‘B’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order passed by NFAC, Delhi dated 23.01.2024 for A.Y. 2017-18.
At the outset, the Ld.AR submitted that the NFAC/CIT(A) dismissed the appeal for non-prosecution. He submitted that though the issues has been decided on merits, the submissions of the assessee were not considered and the Ld.CIT(A) has upheld the view of the Ld.AO.
The Ld.AR submitted that assessee was issued 3 notices on 23.02.2021, 25.11.2021 and 05.01.2024. In each of these notices, assessee had sought for adjournment. It is submitted that, the first two dates fell during the covid period and thereafter, after a period of 3 years, the third notice was issued intimating the date of hearing to be on 12.01.2024. The Ld.AR submitted that assessee was in the process of collecting all the necessary details in respect of the issues and therefore was unable to make proper representation before the first appellate authority. The Ld.AR submitted that though an adjournment application was filed on 10.01.2024, the Ld.NFAC/CIT(A) did not grant a date and passed the impugned order on 23.01.2024. The Ld.AR humbly prayed that the issue may be remanded to the Ld.CIT(A) for readjudication on the merits in the interest of justice.
The Ld.DR on the contrary vehemently opposed the request of the assessee for the reason that assessee had not appeared before the NFAC and had simply filed adjournment applications. It was thus submitted by the Ld.DR that assessee was not interested in pursuing the appeals.
Page 3 of We have perused the submissions advanced by both sides in the light of records placed before us.
We note that the assessment order was passed in the year 2019. The assessing officer had issued various notices calling for various details in respect of the cash deposits made during demonetisation period and also sought explanation in respect of substantial increase in the agricultural income that was claimed exempt during the year. The assessee sought time before the assessing officer which was granted. However, proper details could not be furnished by the assessee on the issues and the assessment order was passed.
Before the Ld.NFAC/CIT(A), the hearing was carried out during the pandemic period and thereafter in 2024, when the 3rd notice was issued, there was a lapse of three years. Merely because the assessee sought adjournment, it cannot be assumed that, the assessee was not interested in contesting the appeal. We are of the opinion that justice must not seem to be rendered but it must be rendered.
Assessee cannot be denied the opportunity of being heard which is the basic principles of natural justice.
As the appeal was pending before the first appellate authority, considering the fact that at the fag end of the 2019 fear of epidemic was already in the air, assessee deserves to be granted
Page 4 of opportunity of being heard and to furnish relevant details / information in respect of the additions made.
In the interest of justice, we therefore remand the appeal for denovo consideration to the Ld.AO on the issues that has been the reason for the scrutiny assessment. The assessee is directed to furnish all relevant information / evidences in respect of the issues before the assessing officer and the assessing officer is directed to verify the same in accordance with law. Accordingly, the grounds raised by the assessee stands partly allowed for statistical purposes. In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on 17th April, 2024.