SHRI ARUNJUNAIRAJ NADARAJAN,CHENNAI vs. ITO, NCW-22(1), TAMBARAM
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI MANOJ KUMAR AGGARWAL
आदेश / O R D E R
PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the
Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter in
short "the Ld.CIT(A)”), Delhi, dated 21.02.2024 for the Assessment Year
(hereinafter in short "AY”) 2015-16.
At the outset, the Ld.AR of the assessee pointed out that the
impugned order of the Ld.CIT(A) is an ex-parte order. He also pointed
out that assessee was running a grocery shop along with his brother who
ITA No.1094/Chny/2024 (AY 2015-16) Shri Arunjunairaj Nadarajan :: 2 ::
passed away (expired) which led him to sell the inventory before closing it
down; and after giving the share of his deceased brother [to his family]
deposited, the balance amount in his bank. Further, according to the
Ld.AR, since the assessee didn’t had any taxable income in the relevant
year under consideration, he didn’t file any return of income (RoI). Later,
the AO re-opened the assessment by issuing notice u/s.148 of the Income
Tax Act, 1961 (hereinafter in short ‘the Act’) on 31.03.2022 and passed
best judgment assessment on 22.03.2023 u/s.144 of the Act by adding
the entire cash deposits to the tune of Rs.56,57,988/- u/s.69 of the Act.
According to the Ld.AR, the assessee challenged the action before the
Ld.CIT(A) who without admitting the appeal, on the failure to remit
advance tax, dismissed the appeal. Assailing the action of the Ld.CIT(A),
the Ld.AR pointed out that the Ld.CIT(A) misdirected himself by taking
such a view, because, in this case, since assessee didn’t had any income
chargeable to tax, didn’t file any return of income and therefore,
according to him, question of remitting advance tax doesn’t arise as per
sec.208 of the Act. Therefore, the Ld.AR submitted that the reason given
by the Ld.CIT(A) to hold the statutory appeal as not maintainable, is
erroneous and unsustainable in law. We find force in the contentions of
the Ld.AR and note that it is not the case of the Ld.CIT(A) that assessee
had filed return of income and failed to pay tax on the returned income.
And since, the conditions required for paying advance tax doesn’t arise in
ITA No.1094/Chny/2024 (AY 2015-16) Shri Arunjunairaj Nadarajan :: 3 ::
the facts and circumstances of the case, we find that the Ld.CIT(A) erred
in finding fault regarding non-payment of advance tax and consequently,
holding the appeal before him as not maintainable is unsustainable in law.
Having said so, we note that the AO has passed an ex-parte order
qua assessee which omission according to the Ld.AR was because
assessee was never served with any notice which resulted in the AO
passing best judgment assessment adding the entire deposits in the bank
which action according to the Ld.AR is arbitrary exercise of power.
According to the Ld.AR, the amount deposited is nothing but sale
proceeds from the inventory of the grocery shop before finally closing
down the business due to death of his brother (supra). Be that as it may,
we are not expressing any opinion on the merits of the impugned action
of the AO. But we note that the main grievance of the assessee is that no
proper opportunity has been granted to the assessee during the course of
assessment proceedings. Therefore, relying on the decision of the
Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in
[2001] 249 ITR 216 (SC), we set aside the impugned order of the
Ld.CIT(A) and remit it back to the file of the AO with a direction to de-
novo assess the income of the assessee after hearing the assessee; and
the assessee is at liberty to raise legal issues as well as
additions/disallowance on merits; and the assessee is directed to be
diligent and file written submissions/relevant documents before the AO
ITA No.1094/Chny/2024 (AY 2015-16) Shri Arunjunairaj Nadarajan :: 4 :: and the AO to frame assessment in accordance to law after hearing the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 26th day of July, 2024, in Chennai.
Sd/- Sd/- (मनोज कुमार अ�वाल) (एबी टी. वक�) (MANOJ KUMAR AGGARWAL) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 26th July, 2024. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF
