KUNDARAPALLI NARASHIMAN NATARAJAN,KRISHNAGIRI vs. ITO, WARD-1,, KRISHNAGIRI

O R D E R PER BENCH: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi in Order No.ITBA/NFAC/S/250/2024-25/1064419040 (1) dated 29.04.2024. The assessment was framed by the Assessing Officer, National Faceless Assessment Centre, Delhi for the assessment year 2017-18 u/s.147 r.w.s. 144 r.w.s 144B of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 24.03.2022.

4. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the order of CIT(A)-NFAC is ex-parte and dismissed for default purely and no adjudication on merits. We also noted that the CIT(A)-NFAC has given his finding in para 3.2 as under:- “3.2 But the appellant has ignored even the last opportunity provided to the appellant to substantiate the appeal under reference. During the assessment proceedings, the appellant did not respond to the notices and questionnaires issued by ld.AO. Ultimately, ld.AO was compelled to pass the assessment order u/s.147 r.w.s. 144 read with section 144B read with section 144B of the Income Tax Act, 1961 on the basis of information available on record. It shows that the appellant assessee is not interested in representing his case and he has nothing to say on the merit of the case. Therefore, the appeal of the appellant is dismissed without any discussion on the merits of the case. Accordingly, the appeal of the appellant is not allowed.”

We also noted that the assessment order is passed u/s.144 r.w.s. 147 of the Act. Admittedly, there is number of opportunities provided by AO as well as CIT(A), but the CIT(A)-NFAC failed to act judiciously as no adjudication on merits. Hence, considering the facts in entirety and the fact that the appellate order by the CIT(A)- NFAC is dismissed for default in simpliciter and no adjudication on merits, even otherwise the order of AO is also ex-parte and passed u/s.144 as best judgment assessment u/s.144 of the Act, in the facts of the case, we feel that one more opportunity be provided to assessee to substantiate his case before the AO and accordingly, we CIT(A)-NFAC as well as that of the AO and remand the matter in entirety back to the file of the AO with a condition that the assessee will pay a cost of Rs. 25,000/- (Rupees twenty five thousand only) to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras by the assessee within a month’s time from the date of receipt of this order. The assessee will pay this cost and produce the receipt before the AO. In term of the above, the matter is remanded back to the file of AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court at the time of hearing on 21stAugust, 2024 at Chennai.