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Facts
The assessee, engaged in rice sales, feed sales, chit fund, and broiler poultry, did not file an income return initially. The case was reopened under Section 147 of the Income Tax Act based on AIR information. An assessment order was passed under Section 147 read with Sections 144 and 144B, leading to additions for unexplained money and interest income. The assessee did not appear before the first appellate authority.
Held
The Tribunal noted that the assessee failed to appear before the first appellate authority, but considering the principles of natural justice and the fact that most notices were issued during the Covid-19 period, it decided to grant another opportunity. The impugned order was set aside, and the appeal was restored to the AO for a denovo assessment.
Key Issues
Whether the assessee was denied natural justice due to non-appearance before the CIT(A) and if a denovo assessment is warranted given the circumstances, including the Covid-19 pandemic.
Sections Cited
147, 148, 144, 144B, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
(िनधा�रणवष� / Assessment Year: 2015-2016) Periyannan Santhamoorthy, Vs. The Income Tax Officer, 109/2, Pallapatti Village & Post, Ward 1, Nettadahalli, B.O, Dharmapuri. Dharmapuri 636 803. [PAN:AYPPS 4031C] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri. N.V. Krishnan, Advocate ��यथ� क� ओर से /Respondent by : Ms. R. Anita, IRS, Addl. CIT. सुनवाई क� तार�ख/Date of Hearing : 11.09.2024 घोषणा क� तार�ख /Date of Pronouncement : 20.09.2024 आदेश / O R D E R PER 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 29.11.2023 for Assessment Year 2015-16.
Assessee is an individual and is in the business of rice sales, feed sales, chit fund, broiler poundry and earning from sub-contracts. The assessee has not filed the return of income originally despite having taxable income. Therefore, on the basis of AIR information the case of the assessee has been reopened u/s 147 of the Income Tax Act, 1961 (In short ‘Act’). The assessee filed return of income on 12.02.2022 pursuant to section 148 notice. The AO has passed order under section 147 r.w. section 144 read with section 144B of the Act dated 25.03.2022 and made an addition of Rs.1,39,71,250/- towards unexplained money u/s 69A of the Act being cash deposits in bank account and an addition of Rs.30,713/- income from other sources being interest received.
Further, the appellant filed the appeal against the order under section 147 r.w. section 144 read with section 144B of the Act dated 25.03.2022 before the Ld. CIT(A) wherein the assessee did not appear before the first appeal authority. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us.
At the outset, Ld. Counsel for the appellant submitted that Ld. CIT(A) had not followed the principles of natural justice. Ld. Counsel for the appellant further prayed that if an adequate opportunity of hearing is given to appellant, appellant would prosecute its case properly before the Ld. AO. The Ld.DR pleaded for dismissal of the appeal on the ground that the assessee failed to appear before the ld. first appellate authority.
Though we concur with the submissions of Ld.DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We find that most all the notices issued by the AO were during Covid-19 period. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment on merits after affording proper opportunity of hearing to the assessee subject to cost of Rs.5000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld.AO. The assessee is directed to substantiate its case forthwith without any fail, failing which Ld.AO shall be at liberty to proceed with the denovo assessment on merits.
In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 20th September, 2024 at Chennai.