NANDI POLYMERS INDIA PRIVATE LIMITED,KURNOOL vs. ACIT., CIRCLE-1, KURNOOL

The brief facts of the case are that the appellant company is engaged in the business of trading in polymers. The assessee has not filed its return of income for the assessment year under consideration u/s. 139 of the Income Tax Act, 1961 (‘Act’). As per the information available with the department, the assessee has made substantial cash deposits during the year under consideration amounting to Rs. 1,71,21,891/- to the bank accounts. Since the assessee has not filed the return of income, assessment has been re- opened u/s. 147 of the Act and notice u/s. 148 of the Act was issued and served on the assessee. The assessee did not file its return of income in response to notice u/s. 148 of the Act also. The case of the assessee was selected for scrutiny and during the course of assessment proceedings, the assessee was called upon to explain and file necessary details to prove the source for cash deposits. The assessee neither appeared nor filed any details. Therefore, the AO passed best judgment assessment order u/s. 147 r.w.s. 144 of the Act and assessed total income of the assessee at Rs. 1,72,24,845/- by making additions towards cash deposits and interest income u/s. 69A r.w.s. 115BBE of the Act.

The assessee carried the matter in appeal before the first appellate authority, but neither appeared nor filed any details. Therefore, the Ld.CIT(A) disposed of the appeal filed by the assessee, ex parte and sustained the additions made. Aggrieved by the order of Ld.CIT(A), assessee preferred appeal before the Tribunal.

None appeared for the assessee. We have heard the Ld.DR and have gone through the relevant assessment records and appellate order. Admittedly, the AO has passed best judgment assessment in terms of section 144 of the Act, because of non-appearance of the assessee during the assessment proceedings. The Ld.CIT(A) disposed-of the appeal filed by the assessee, ex parte for non-prosecution. The assessee neither filed any details nor appeared even though the case was listed for hearing on many occasions. It is evident from para No. 4.1 of the assessment order. Although the Ld.CIT(A) disposed-of the appeal filed by the assessee, ex parte on the basis of the material available on record, the order passed by the Ld.CIT(A) is cryptic and non- speaking. It is a well settled principle of law that even in a case of ex parte proceedings for non-appearance of appellant or respondent, the appeal should be disposed-of on merits on the basis of the material available on record. Since the Ld.CIT(A) has dismissed the appeal filed by the assessee, ex parte, without discussing the issues on merits, we are of the considered opinion that the issue needs to go back to the file of the Ld.CIT(A) to give one more opportunity of hearing to the assessee.

Accordingly, we set aside the order of the Ld.CIT(A) and restore the issue back to the file of the Ld.CIT(A) for fresh adjudication, after providing a reasonable opportunity of hearing to the assessee. Needless to mention that assessee should appear before the Ld.CIT(A), without seeking any adjournment. Grounds are accordingly treated as allowed for statistical purposes.