FIROZALI TAHERALI CHUDIWALA,FATIMA NAGAR, PUNE vs. INCOME TAX OFFICER 14(1), PUNE

This appeal by the assessee against the order dated 05-07-2023 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment year 2016-17.

The assessee raised two grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) justified in confirming the order of AO ex-parte of the assessee.

Brief facts relating to the issue are that the assessee is an individual and no return of income filed for the year under consideration. According to the AO, as per the data available in the AIMS module under Multiyear NMS (Non filer Management System), the assessee entered into the transactions to an extent of Rs.3,26,90,450/- the details of which are reflected in pages 2 and 3 of the assessment order. In view of the said transactions, by recoding reasons and taking prior approval of the Competent Authority, the AO issued notice u/s. 148 of the Act. No return was filed in response to the said notice u/s. 148 of the Act. Thereafter, a show cause notice issued by giving reasons as reflected in para 3 of the assessment order, in response to which the assessee submitted reply by claiming exemption u/s. 10(38) of the Act. According to the AO no details of bank statement filed supporting the investments and accordingly made addition on account of unexplained investments u/s. 69 of the Act, chargeable to tax u/s. 115BBE of the Act vide order dated 29-03-2022 passed u/s. 147 r.w.s. 144/144B of the Act. Having aggrieved by the order of AO, the assessee preferred an appeal before the NFAC, Delhi. We note that the NFAC, Delhi issued two notices, but no response ever filed by the assessee. Thus, the NFAC, Delhi proceeded to confirm the order of AO in the absence of assessee.

As discussed above, there was no discussion made by the NFAC, Delhi, on merits, but however, simply confirmed the order of AO ex-parte of the assessee which is against the statutory provisions contemplated under sub-section (6) of section 250 of the Act. The sub-section (6) of section 250 of the Act explains that the order of Commissioner (Appeal) shall be in writing stating points for determination, the decision thereon and the reasons for the decision in disposing of the appeal, but however, no discussion whatsoever made by the NFAC, Delhi as it is evident from the impugned order. Since, the addition made u/s. 69 of the Act, in our opinion, assistance of assessee is required, therefore, we deem it proper to remand the issue to the file of NFAC, Delhi for its fresh adjudication. The assessee is liberty to file evidence, if any, in support of its claim. The assessee shall comply with the notices issued by the NFAC, Delhi, in case of any failure, NFAC, Delhi is liberty to dispose off the appeal of assessee as contemplated under sub-section (6) of section 250 of the Act. Thus, the grounds raised by the assessee are allowed for statistical purpose.

In the result, the appeal of assessee is allowed for statistical purpose.