SHRI VIKRAM MADHUKAR DESHMUKH,PUNE vs. DCIT, CENTRAL CIRCLE 1(3), PUNE, PUNE

In both the appeals, the assessee has challenged the ex-parte order of CIT(A) in sustaining the various additions made by the Assessing Officer in the order passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

So far as the assessment year 2016-17 is concerned, the facts of the case, in brief, are that the assessee is an individual and filed his original return of income u/s 139(1) of the Act on 16.10.2016 declaring total income of Rs.27,49,180/-. A search and seizure action u/s 132 of the Act was conducted in the case of assessee on 16.08.2017. In response to the notice u/s 153A of the Act issued on 19.12.2017, the assessee filed his return of income on 19.11.2019 declaring total income of Rs.27,49,180/-. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 153A of the Act determining the total income at Rs.83,00,740/- by making the following additions: i) Disallowance of Rs.5,16,772/- out of labour charges debited in P&L account Addition of Rs.4,09,310/- by treating agricultural income as income ii) from other sources.

Similarly for assessment year 2017-18, the assessee filed his original return of income on 02.11.2017 declaring total income of Rs.23,44,780/-. In response to the notice u/s 153A of the Act, the assessee filed return of income on 19.11.2019 declaring the same income. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 153A of the Act determining the total income at Rs.1,74,86,140/- by making the following additions:

Since the assessee did not appear before the CIT(A) despite number of opportunities granted, the CIT(A) in the ex-parte order passed by him confirmed the additions made by the Assessing Officer.

Aggrieved with such order of CIT(A), the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee submitted that although the CIT(A) has issued seven notices, however, four notices were during Covid-19 period. The fifth notice issued on 07.11.2022 could not be responded due to certain glitches in the communication window. So far as the last two notices are concerned, he submitted that although the assessee has filed adjournment application, however, the CIT(A) without granting an adjournment decided the appeal ex-parte. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case.

The Ld. DR on the other hand, strongly objected to the above arguments of Ld. Counsel for the assessee. Referring to the order of CIT(A), he drew the attention of the Bench to the various notices issued by the CIT(A) and submitted that despite number of opportunities granted, the assessee did not appear before the CIT(A), for which he was constrained to pass the ex-parte order. He submitted that since the assessee had not filed any submission before the Ld. CIT(A), therefore, he was justified in sustaining the additions made by the Assessing Officer. He accordingly submitted that the order of Ld. CIT(A) be upheld and grounds raised by the assessee, be dismissed.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. It is an admitted fact that despite seven opportunities granted by the CIT(A), the assessee did not appear before him for which, he was constrained to pass the ex-parte order. However, it is also a fact that, out of seven notices, four notices were issued during Covid-19 period. So far as the remaining three opportunities are concerned, the fifth notice was on account of enablement of communication window and for the last two notices, there was no response from the side of assessee. It is the submission of the Ld. Counsel for the assessee that an opportunity may be given to the assessee to substantiate his case before the CIT(A). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of CIT(A) with the direction to grant one final opportunity to the assessee to substantiate his case by

In the result, both the appeals filed by the assessee are allowed for statistical purposes.