MANALI CHIMANRAO PATIL,JALGAON vs. INCOME TAX OFFICER, WARD 2(3), JALGAON, JALGAON

This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 27.11.2023 for the assessment year 2017-18.

Briefly, the facts of the case are that the appellant is an individual engaged in running a Petrol Pump. The Return of Income for the A.Y. 2017-18 was filed on 03.07.2017 disclosing total income of Rs.3,66,534/-. The case was selected for complete scrutiny. Statutory notices u/s.143(2) and 142(1) were issued to the appellant. The appellant had not complied with any of the notices. The AO based on the information available with the Department found that the assessee had debited expenses, viz.,Generator expenses, Salary expenses, Account writing expenses and Interest to creditors expenses aggregating to Rs.4,37,288/-. Further, the assessee made cash deposits with State Bank of India, Parola, Jalgaon amounting to Rs.1,38,46,380/-. In the absence of furnishing any submissions by the assessee/failure of the assessee to explain the source of cash deposit, the AO vide order u/s.144 dated 26.12.2019 treated the expenses as Income from Business/Profession and the cash deposits made as unexplained money u/s.69A of the Act.

Being aggrieved by the above assessment order, an appeal was filed before the CIT(A) who vide impugned order dismissed the appeal without going into the merits of the case.

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

The ld. AR submits that the assessee’s case was not represented before the authorities for the reasons beyond control of the assessee, which led to passing of the ex parte orders. Therefore, the assessee could not substantiate the expenses and the cash deposits made with SBI, Parola Branch. Given an opportunity, the assessee is able to prove the sources of cash deposits and the claim of expenses by filing the evidences. He therefore prayed for remanding the matter to the file of CIT(A)/NFAC.

On the other hand, the ld.Sr.DR placing reliance on the orders of the authorities submits that no interference is called for

We heard the rival submissions and perused the material on record. Undisputedly, the assessee had not complied with the notices and the authorities have dismissed the appeal of the appellant ex parte without going into the merits of the issues. Further, it is a trite law that the NFAC should have dealt with the merits of the issue in appeal, even in the case of ex-parte order. From the perusal of the impugned order, it would reveal that the NFAC had not gone into the merits of the issue in appeal, merely dismissed the appeal for non-prosecution, which is contrary to the settled position of law. Considering the entirety of the facts and circumstances and the submissions of the assessee, we are of the considered opinion that it is a fit case for remand of the matter to the file of the NFAC for de novo consideration in accordance with law after affording due opportunity of hearing to the assessee.

In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 10th day of July, 2024.