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Facts
The assessee's appeal is against an ex-parte order by the CIT(A) confirming additions made by the AO on account of a cash deposit in the bank and estimating income. The AO reopened the assessment based on a cash deposit and import/export bills, noting the assessee's non-compliance with notices and failure to file returns.
Held
The Tribunal acknowledged a delay of 33 days in filing the appeal, which was condoned due to sufficient cause. The Tribunal found that both the AO and CIT(A) passed orders ex-parte due to the assessee's non-compliance. Observing principles of natural justice, the Tribunal decided to provide the assessee with another opportunity to present their case.
Key Issues
Whether the ex-parte orders passed by the AO and CIT(A) were justified, and if the assessee should be granted another opportunity to present their case.
Sections Cited
147, 144, 144B, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee is against the order of Learned Commissioner of Income Tax, Appeal, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 15.12.2023 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (hereinafter “the Act”) on 23.12.2016.
There is a delay of 33 days in filing the appeal by the assessee.
The assessee has filed condonation petition stating the reasons for delay in filing the appeal. We have considered the petition of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is condoned accordingly.
The only effective ground of appeal in this appeal of assessee is against exparte order passed by Ld. CIT(A) confirming the addition of cash deposit of Rs. 7,06,000/- in the bank account and further estimating the income @ 8% of total turnover at Rs. 21,22,018/-.
4. The assessee is an individual engaged in the business of processing, segregating and mixing of minerals through mechanical separation using magnets. The A.O has reopened assessment on the ground that there was a cash deposit in bank account of Rs. 7,06,000/, bill of entry for imports of Rs. 3,41,47,920/- and shipping bills for exports of Rs. 2,47,22,447/- but the assessee has not filed return of income. The assessee has not complied with the notices issued, and the A.O accordingly, passed order u/s. 144 of the Act making addition on cash deposit of Rs. 7,06,000/- as unexplained cash u/s. 68 of the Act and estimating the income @ 8% of the total turnover of Rs.
2,65,25,223/-. The assessee before Ld. CIT(A) has also not complied with the notices issued and therefore, the Ld. CIT(A) has confirmed the addition made by the A.O.
Before us, The Ld. Authorized Representative (A.R) of the assessee has submitted the orders of A.O and the Ld. CIT(A) passed ex-parte and therefore, one more opportunity should be provided. The Ld. A.R also relied on the order of Co-ordinate Bench of This Tribunal for A.Y 2017-18 where in interest of justice case has been remanded back to AO.
The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities and argued that the assessee has been non cooperating before A.O as well as Ld. CIT(A) and therefore, the appeal should be dismissed or cost should be imposed.
We have heard the rival submissions, and perused the materials available on record. On perusal of the orders of A.O as well as Ld. CIT(A), we find that the both orders have been passed ex-parte for the non-compliance by the assessee. The Ld. A.R has submitted that the Ld. CIT(A) has not decided the issue on merits, therefore the case may be remanded back to the A.O for adjudication on merits. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to substantiate his case before the A.O. Accordingly, we set aside the orders passed by the A.O and the Ld. CIT(A) and remit the matter back to the file of the A.O to adjudicate this appeal afresh in accordance with law, after giving reasonable opportunity to the assessee. However, considering the assessee’s failure to respond the notices issued by the lower authorities, we find appropriate to impose cost. Accordingly, the assessee is directed to pay the costs of Rs. 10000/-. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the A.O. We also direct the Assessee to appear before the A.O on the date of hearing without fail and furnish complete details for his fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 21st October, 2024.