SHRI RAMDAS VISHNU MARKUTE,PUNE vs. ITO WARD 2(2), PUNE

These are the two appeals filed by the assessee directed against the separate orders of National Faceless Appeal Centre (NFAC), Delhi dated 26.06.2024 for the assessment years 2015-16 & 2016-17.

Since the identical facts and common issues are involved in the above captioned appeals of the appellant, I proceed to dispose of the same by this common order. For the sake of convenience and clarity, the facts relevant to the appeal of the appellant in 2015-16 are stated herein.

Brief facts of the case are that the appellant is an individual and stated to be deriving ‘income from business’ and ‘income from other sources’. The appellant filed the return of income for the A.Y. 2015-16 on 20.09.2016 declaring total income of Rs.30,310/-. The said return was processed u/s.143(1) on 10.12.2016. Subsequently, based on the information received from DDIT (I &CI), Pune that the appellant made cash deposits of Rs.23,76,410/- with Bank of India, Aundh Branch, the case was reopened and a notice u/s.148 was issued on 31.03.2021. Notices u/s.142(1) were also issued to the appellant calling to file submissions along with documentary evidences in respect of cash deposits made. The appellant neither complied with notice u/s.148 nor notice u/s.142(1). In the circumstances, the Assessing Officer (AO) vide order dated 23.03.2022 was constrained to pass best judgment assessment u/s.147 r.w.s.144 r.w.s.144B of the Act. While doing so, the AO brought to tax the said cash deposits of Rs.23,76,410/- as unexplained money u/s.69A of the Act.

Being aggrieved by the above assessment order, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal of the appellant for non-prosecution, without going into merits of the issue.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

I heard the rival submissions and perused the material on record. It is a fact borne out from record that the assessment order as well as first appellate order was passed ex parte owing to non-compliance from the side of the appellant. From the perusal of Para No.5 of the impugned order, it would be clear that the notices were sent to the appellant through ITBA portal. In my considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Income-tax Act, 1961 Act and Rule 127(1) of the Income-tax Rules, 1962. Therefore, it is crystal clear that the notices were not served upon the appellant. To fortify my view, I would like to make a reference to a decision rendered by the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT (Exemptions) (2024) 463 ITR 560 (P&H), wherein the Hon’ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for denovo disposal of case. The relevant paragraphs of the judgment are reproduced below :

Having noticed as above, this court is of the firm view that the petitioner has not been given sufficient opportunity to put up its please with regard to the proceedings under section 12A(1)(ac)(iii) of the Act of 1961 and as it was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter.

In the present case, it can also be presumed that the NFAC had passed the impugned order without giving a reasonable opportunity of being heard to the appellant to represent the matter before him and this approach of the NFAC is in gross violation of principles of natural justice. Further, the NFAC had fell in serious error by not adjudicating the issue 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 this regard, reference is being made to a decision of the Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) wherein it was held that CIT(A) is obliged to dispose of the appeal on merits. Therefore, I deem it proper to remit the matter to the file of CIT(A)/NFAC for de novo disposal of the issue in appeal on merits afresh after allowing reasonable opportunity to the appellant, in accordance with law. I order accordingly.

In the result, the appeal filed by the appellant is partly allowed for statistical purposes.

In the result, the appeal filed by the appellant is partly allowed for statistical purposes.

To sum up, both the appeals filed by the appellant are partly allowed for statistical purposes.