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Facts
The assessee, engaged in a fireworks agency, failed to file an income return due to medical treatment. The AO received information about cash deposits of Rs. 38,46,000/- and proceeded with a best judgment assessment under Section 144, determining total income at Rs. 44,51,958/- after adding Rs. 39,16,000/- under Section 69A and estimating income at 8% on remaining credits. The CIT(A) dismissed the appeal ex-parte.
Held
The Tribunal noted that the assessee did not receive the notices from the AO and CIT(A), leading to the ex-parte order. While acknowledging the assessee's failure to appear, the Tribunal, in the interest of natural justice, set aside the impugned order.
Key Issues
Whether the ex-parte assessment and appeal dismissal are justified when the assessee claims non-receipt of notices, and whether a denovo assessment is warranted for natural justice.
Sections Cited
142(1), 143(2), 144, 69A, 44AD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI
(िनधा�रणवष� / Assessment Year: 2017-2018) Rajaram Seenivasa Ragavan, Vs. The Income Tax Officer, No.24, V.K.M. Street, Ward 4, Sivakasi 626 123. Virudhunagar. [PAN: AVXPS 0467P] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri N.V. Narayanan, Advocate ��यथ� क� ओर से /Respondent by : Ms. V. Aswathy, IRS, JCIT. सुनवाई क� तार�ख/Date of Hearing : 18.12.2024 घोषणा क� तार�ख /Date of Pronouncement : 23.12.2024 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 30.08.2024 for Assessment Year 2017-18.
Brief facts of the case are that the assessee is an individual engaged in the business of fireworks agency. For the relevant Assessment Year, the assessee could not file the return of income due to medical treatment. The assessing officer received information that the assessee made cash deposits of Rs.38,46,000/- in his two bank accounts and therefore issued notice under section 142(1) of the Income Tax Act, 1961 (in short ‘’the Act’’) dated 29.01.2018 and again on 21.08.2019. In response to the above notice dated 21.08.2019, the assessee filed his return of income on 27.08.2019 admitting total income of Rs.4,48,980/- under section 44AD of the Act on estimate basis. The assessing officer did not issue any notice under section 143(2) after the assessee filed his return of income. The assessing officer conducted enquiry with the bank and found that the cash deposits made was Rs.39,16,000/- and all the credits in the bank accounts including the cash deposits were Rs.1,00,97,981/- and completed the assessment under section 144 on 31.12.2019 on the ground that the assessee did not file his return of income within the time allowed in the notice under section 142(1) dated 29.01.2018. He added Rs.39,16,000/- under section 69A and estimated the income @ 8% on the remaining credits in the bank account statement at Rs.4,90,858/- and thus determined the total income at Rs.44,51,958/-. Aggrieved, assessee further challenged the order of assessment u/s 144 of the Act before the ld.CIT(A) who proceeded ex-parte and dismissed the appeal on merits. Aggrieved, assessee is in appeal before us.
Before us, the ld. Counsel for assessee submitted that the assessee has inadvertently not received the notices issued by the AO and the ld.CIT(A) hence, asessee failed to avail opportunity to file evidence and documents to substantiate his explanation regarding deposits. The ld.DR stated that the assessee is habitual defaulter in appearing before the appellate authority hence no lenient view is to be taken in this case and prayed for dismissal of appeal.