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Facts
The assessee, a commission agent in selling vegetables, received an ex-parte order from the CIT(A) for Assessment Year 2017-18. The CIT(A) dismissed the appeal for non-prosecution, as the assessee failed to respond to notices, allegedly due to an issue with his GST consultant's email. The assessee had previously conceded an addition of Rs. 21,82,427/-.
Held
The Tribunal noted that the CIT(A) passed an ex-parte order without adjudicating on merits. The assessee claimed the cash deposits were from their business and already taxed, and the addition would lead to double taxation. The Tribunal acknowledged the assessee's unfamiliarity with email and the consultant's lapse.
Key Issues
Whether the CIT(A) was justified in passing an ex-parte order without considering the merits, and whether the addition of cash deposits as unexplained credits leads to double taxation.
Sections Cited
250, 68
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND SHRI JAGADISH
आदेश /O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal at the instance of the assessee is directed against CIT(A) - NFAC order dated 28.08.2024, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.
At the very outset, we notice that the CIT(A) has passed an ex-parte order. The CIT(A) has not adjudicated the issues on merits and has dismissed the appeal in-limine for non-prosecuting the case. The reasons for passing an ex-parte order was that assessee did not respond to five notices issued from the office of the First Appellate Authority to furnish his written submissions / documentary evidences in support of his contentions.
The ld.AR submitted that the assessee is a commission agent in selling vegetables. He was not conversant with checking e-mails and during the proceedings before the CIT(A) in Form 35, he had given the e-mail id of his GST consultant. It was submitted by the ld.AR, since the GST consultant did not take note of e-mail sent from the office of the First Appellate Authority, the proceedings before the CIT(A) was ex-parte. The ld.AR further submitted that the issue may be restored to the files of the AO. The learned AR submitted that assessee had committed the mistake in conceding before the AO for the addition of Rs.21,82,427/-. It was stated that cash deposits of Rs.21,82,427/- (which was conceded for addition) is out of assessee’s business of selling vegetables and has suffered tax. Therefore, taxing the entire amount of Rs.21,82,427/- u/s.68 of the Act would amount to taxation of the said sum twice. It was submitted that assessee had maintained books of accounts and the same was verified by the AO (refer para 3 at page 2 of the assessment order). It was submitted that the officers of the Department shall not take advantage of the ignorance of the assessee and should assist the tax payer in a very reasonable way. In this context, the ld.AR relied on the Board Circular No.014(XL- 35) of 1955 dated 11.04.1955.
The ld.DR submitted that the assessee had conceded for addition of Rs.21,82,427/- as unexplained cash credits u/s.68 of the Act. Therefore, it was contended that there is no reason to raise the issue before the CIT(A) and before the ITAT. It was submitted that the appeal of the assessee may be dismissed.
We have heard rival submissions and perused the materials on record. The assessee, an individual is a commission agent in selling vegetables. The assessee is not very familiar with the operation of computers and in Form 35, he had given the GST consultant e-mail id. It is the claim of the assessee that the GST Consultant did not take note of the e-mail notices sent from the office of the CIT(A), consequently the proceedings before the CIT(A) was ex-parte. It is the claim of the assessee though the addition has been made by the AO on the concession of the assessee, the cash deposits are only out of the business of selling vegetables. Admittedly, the assessee has maintained books of accounts and the same has been verified by the AO, which is evident from the assessment order at para 3. If the cash deposits are out of the business of the assessee, again adding the cash deposits as unexplained u/s.68 of the Act would lead to a situation, that the said amount would be taxed twice. In the interest of justice and equity, as a last opportunity, we are of the view that the matter needs to be examined afresh by the AO. Accordingly, the issue of addition of Rs.21,82,427/- made by the AO is being restored to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment in the matter. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.