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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH & SHRI MANJUNATHA.G
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) in order No.ITBA/NFAC/S/250/2023- 24/1057107725(1) dated 16.10.2023. The assessment order was framed by the Assessing Officer, Assessment Unit, Income Tax Department for the assessment year 2021-22 u/s.144 r.w.s.144B of Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 21.12.2022.
At the outset, the ld.counsel for the assessee stated that the CIT(A) passed ex-parte order and even the order of AO is best judgment assessment framed u/s.144 r.w.s. 144B of the Act and both the authorities below have passed order in gross violation of principles of natural justice. For this, the ld.counsel for the assessee drew our attention to following ground Nos.2,3 & 4:-
2. The NFAC, Delhi erred in dismissing the appeal ex-parte and ought to have appreciated that any order passed in gross violation of principles of natural justice should be reckoned as nullity in law.
3. The NFAC, Delhi failed to appreciate that the provisions of Section 250(6) of the Act were not followed in passing the impugned order and hence ought to have appreciated that ex-parte order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.
4. The NFAC, Delhi failed to appreciate that having not dealt with the issues on merits, the impugned order passed by them should be considered as non-est in law and ought to have appreciated that the cryptic order passed by them would defy the principles laid down by the Calcutta High Court by explaining the process of adjudication, thereby vitiating the ex-parte appellate order under consideration.
The ld.counsel for the assessee first took us through the assessment order and stated that the assessment order is ex-parte
and best judgment assessment u/s.144 of the Act dated 21.12.2022, thereby making various additions as under:- Sl.No. Description Amount (in INR) 1 Income as per Return of income filed Nil 2 Income as computed u/s143(1)(a) 80,99,100/- 3 Variation in respect of issue of 80P <para 80,99,100/- 3.8(i)> 4 Variation in respect of issue of provisions 45,05,576/- debited in profit and loss account <para 3.8(ii)> 5 Variation in respect of issue of cash deposit 3,81,46,600 <para 3.8(iii)> u/s 69A r.w.s.115BBE of the Act 6 Variation in respect of issue of time deposit 13,70,21,775 <para 3.8(iv)> u/s 69A r.w.s. 115BBE of the Act 7 Variation in respect of issue of cash 8,95,69,959 withdrawal <para 3.8(v)> u/s 69C r.w.s. 115BBE of the Act 8 Total Income determined as per the above 27,73,43,014/- proposal The ld.counsel stated that the AO as against ‘nil’ returned income assessed the income of the assessee at Rs.27,73,43,014/-. Subsequently, the ld.counsel took us through the order of CIT(A) confirming the addition for non-prosecution as well as on merits. But, he stated that on merits in para 5.7, the CIT(A) has simpliciter confirmed the action of the AO and there is no adjudication on the facts and it is totally a non-speaking order. When a query was put to ld.counsel that from the face of the assessment order, it can be gathered that the AO has given various opportunities which are 2 of the assessment order and the assessee did not comply with. The details of opportunities are mentioned in para 2 at page 2 of the assessment order. As regards to the order of CIT(A), it is noticed that the CIT(A) has also fixed the appeal for hearing on three occasions and none represented nor filed any adjournment petition. When these facts were narrated to ld.counsel for the assessee or confronted to him, he could not reply anything. It was informed to the ld.counsel that what was the remedy left with the AO other than best judgment u/s.144 of the Act and the CIT(A) not to decide the appeal ex-parte. The ld.counsel could not contradict the same.
On the other hand, the ld.Senior Departmental Representative stated that the order of the AO and the CIT(A) has clearly narrated the default on the part of the assessee and non-cooperative attitude. He stated that the assessment proceedings are time barred and hence, the AO has no alternative but to decide the assessment as best judgment assessment u/s.144 of the Act, due to non-representative of assessee despite fixing the case for 8 times. He stated that the assessee’s attitude is totally non-cooperative and hence, he requested that appeal be dismissed in limine or appeal
can be decided on merits. He further submitted that even now the assessee has not filed any details.
We have heard rival contentions and gone through the facts and circumstances of the case. As regards to the issue of principles of natural justice, we are in full agreement with the assessment order and the order of CIT(A) but in the interest of natural justice that as against returned income of assessee, the income determined by the AO in the best judgment assessment is at Rs.27,73,43,014/-, which is of high pitched assessment. We have gone through the assessment order and noticed that the AO has framed the assessment in a summary manner without conducting any enquiry. The AO has all the powers under the Act to enforce attendance of witnesses, can examine the books of accounts and documents. Even the order of CIT(A) on merits seems just repetition of the AO’s order and there is no independent adjudication. Going by the facts and cumulative thinking, we, in the interest of natural justice set aside the issue to the file of the CIT(A), who after taking remand report from the AO will re-decide the issue on merits after allowing reasonable opportunity of being heard to the assessee. This set aside is subject to cost of Rs.25,000/- to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras on or 28.03.2024. The assessee will pay this cost and produce the receipt before the CIT(A). Needless to say, the assessee this time will appear before the CIT(A) at the first instance of issuance of notice either in e-mail or by any other mode. In term of the above, the order of CIT(A) is set aside and matter restored back to his file for fresh adjudication.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court at the time of hearing on 19th February, 2024 at Chennai.