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Facts
The assessee failed to file an income tax return for AY 2010-11 and did not comply with assessment proceedings. The Assessing Officer (AO) observed cash deposits of Rs 36,59,641/- made by the assessee and, due to non-compliance, completed the assessment under section 144 read with section 147, determining total income at Rs 36,59,641/- and initiating penalty proceedings under section 271(1)(c). The National Faceless Appeal Centre (NFAC) confirmed the addition ex-parte, and a penalty of Rs 10,32,000/- was levied.
Held
The Tribunal found that the NFAC decided the appeal ex-parte without adjudicating the issue on merits. Therefore, in the interest of justice and fair play, the Tribunal restored the appeal to the file of the NFAC for de novo adjudication. The assessee was directed to be given a reasonable opportunity of being heard and to cooperate with the NFAC for expeditious disposal.
Key Issues
Whether the NFAC was justified in confirming the addition on account of cash deposits and the consequential penalty without a proper adjudication on merits.
Sections Cited
147, 144, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH “SMC”: AGRA
Before: SHRI M. BALAGANESH
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in & 408/AGR/2024 for AY 2010-11, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 21.08.2024 & 27.08.2024 against the order of assessment passed u/s 147 r.s.w. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 24.10.2017 and u/s 271(1)(c) dated 26.04.2018 by the Assessing Officer, ITO, Ward-2(2)(1), Firozabad (hereinafter referred to as ‘ld. AO’). Since these are quantum and penalty appeals for the same assessment year, they are taken up together and disposed of by this common order for the sake of convenience.
The only effective issue to be decided in this appeal is as to whether the ld NFAC was justified in confirming the addition made on account of cash deposits of Rs 36,59,641/- and consequential levy of penalty under section 271(1)(c ) of the Act in the sum of Rs 10,32,000/- in the facts and circumstances of the instant case.
We have heard the rival submissions and perused the materials available on record. The assessee did not file any return of income for the assessment year 2010-11. No compliance was made by the assessee during the course of assessment proceedings. The Learned AO observed that there were cash deposits made in State Bank of India, Usaini, Firozabad during the financial year 2009-10 amounting to Rs 36,59,641/- by the assessee and sought explanation of source for the same. Since there was no compliance made by the assessee, the Learned AO was forced to complete the assessment under section 144 read with section 147 of the Act on 24.10.2017 determining total income at Rs 36,59,641/- and initiate penalty for concealment of income under section 271(1)(c ) of the Act. The appeal was decided by the Learned NFAC exparte. Since the quantum got confirmed in first appeal, the Learned AO levied concealment penalty under section 271(1)(c ) of the Act in the sum of Rs 10,32,000/-. Hence there are two appeals filed before us (one on quantum and other on penalty).
On perusal of the order of the ld NFAC, we find that the ld NFAC had decided the issue ex parte without adjudicating the issue on merits giving its independent finding on the quantum proceedings. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to file of ld NFAC for de novo adjudication in accordance with law. Needless to mention the assessee be given reasonable opportunity of being heard. The assessee is directed to cooperate with ld NFAC for expeditious disposal of the appeal by not taking unwarranted adjournments. Hence, the grounds raised by the assessee are allowed for statistical purposes for the quantum proceedings.
Since the quantum proceedings are restored to the file of Learned NFAC, the penalty proceedings are also restored to the file of Learned NFAC for denovo adjudication in accordance with law with the same directions as in quantum proceedings.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 07/02/2025.