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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD
Before: SHRI INTURI RAMA RAO & SHRI K. NARASIMHA CHARY
O R D E R PER INTURI RAMA RAO, A.M. This is an appeal filed by the assessee directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dt.11.10.2023 for the assessment year 2017-18.
The brief facts of the case are that assessee is an individual deriving income from business of petrol bunk as Proprietrix of M/s. R.K.Filling Station during the financial year 2016-17 relevant for assessment year 2017-18. The assessee filed her return of income for the AY 2017-18 on 29/03/2018 electronically by admitting total income of Rs.3,81,540/- in ITR-3. Later, the case has been selected for Complete scrutiny under CASS having reason "Abnormal increase in cash deposits during demonetization period as compared to pre- demonetization period. Thereafter, notice u/s. 143(2) dated 14.08.2018 and notices u/s. 142(1) dated 21.08.2019 and 09.112019 along with questionnaire were issued and served. In response to notices issued and duly served, there was no reply from the assessee. A show cause notice along with final opportunity letter was issued on 17/12/2019 to the assessee for which no reply was given by the assessee.
2.1 During the course of scrutiny proceedings, it was observed that during the financial year 2016-17, the assessee has maintained two bank accounts. As the assessee made cash deposits during demonetization period as well as in the financial year 2016-17 to the tune of Rs.62,8,620/- in State Bank of India having account number 36106269274 and Rs.2,79,23,923/- in Bank of India, Puttur Branch. As there was no response/reply from assessee to the statutory notices issued, Assessing Officer left with no other alternative completed the assessment u/s 143(3) of the Income Tax Act, 1961 by adding income of Rs. 3,42,10,543/- u/s. 68 of the income tax act, 1961 to the returned income of the assessee for the assessment year 2017-18. Thereafter, initiated penalty proceedings u/s 271AAC separately.
Being aggrieved, the assessee is in appeal before us in the present appeal.
Before us, ld.AR submitted that the assessee has failed to provide necessary information and appear before the lower authorities. Hence, the ld. AR requested the Bench to remand the matter back to the file of Assessing Officer. Ld.AR further submitted that as the assessee has sufficient cause from putting in appearance before the ld.CIT(A), matter may kindly be remitted back to the authorities below for afresh adjudication.
On the other hand, the ld. DR relied on the orders of the authorities below.
We have heard the rival submissions and perused the material on record. From perusal of the impugned order, it is clear that the NFAC while passing the ex-parte order had not adjudicated the issue raised in appeal on merits, instead the NFAC dismissed the 3 appeal for want of prosecution of appeal. This approach of the NFAC is totally unreasonable and unjustified. The NFAC fell in serious error by not adjudicating the issues in appeal on merits. The settled position of law mandates the NFAC to dispose of the appeal by adjudicating the issue raised in appeal on merits. In the present case, the NFAC had fell into serious error by not disposing of the appeal on merits. Therefore, we vacate this finding of the NFAC.
In the circumstances, we remand the matter back to the file of the Assessing Officer and direct to dispose of the appeal on merits in accordance with law after affording due opportunity of being heard to the appellant.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the Open Court on 21st March, 2024.