KIRAN KANTILAL CHOKSHI,VADODARA vs. THE INCOME TAX OFFICER, WARD-3(1)(4), VADODARA

This appeal is filed by the assessee as against the exparte appellate order dated 14.02.2024 passed by the the National Faceless Appeal Centre (NFAC), Delhi arising out of the assessment order passed under section 143(3) of the Income-Tax Act, 1961 [hereinafter referred to as "the Act"] relating to the Assessment Year (AY) 2017-18.

The brief facts of the case is that the assessee is an individual and engaged in the business of trading of Gold Bullion/Silver/old gold ornaments. The assessee filed its Return of Income for the Asst. Year 2017-18 on 31.10.2017, declaring total income of Rs.11,29,100/-. The case was selected for scrutiny assessment and various notices were issued on the cash deposits of Rs.2.9 crores on Kiran K Chokshi vs. ITO Asst.Year 2017-18 Page No.2 Specified Bank Note currency in Bank of India and UCO Bank during the demonetization period. The assessee was asked to explain the source of cash deposit. After considering the explanation, the Assessing Officer treated the cash deposits as bogus and therefore added to the income of the assessee u/s.68 and also taxed the same under section 115BBE of the Act and demand tax thereon.

Aggrieved against the same, the assessee field an appeal before the NFAC and sought for adjournments on 02.09.2022, 11.11.2022 and 05.09.2023. However, the Ld.CIT(A) found that the assessee failed to file the written submission in support of his Grounds of Appeal and also held that assesse has not responded to the hearing notices thereby dismissed the appeal for non-prosecution and without adjudicating the case on merits.

Aggrieved against the appellate order the assessee is in appeal before us raising the following grounds of appeal:

The Ld.DR appearing for the Revenue has no series objection and stated that assessee should make use of this final opportunity by producing all the necessary details before the appellate authority.

We have heard the rival arguments and perused the materials available on record. As against every hearing notices, the assessee sent adjournment request to NFAC. However, the same was not considered by the NFAC and passed ex-parte appellate order. Section 250(6) of the Act provides that the Ld.CIT(A) shall dispose of the appeal on merits and spelt out the reason for such decision. But here in this case, the Ld.NFAC has not discussed on merits, but simply reproduced the facts and grounds of appeal and dismissed the appeal for non-prosecution, which in our considered opinion is not correct in law. Thus, we set-aside ex-parte appellate order passed by the NFAC with a direction to give proper opportunity of hearing to the assessee and then pass order on merits. Needless to say the assessee should make use of this final opportunity by filing all necessary details and evidences filed before the NFAC to pass the order on merits.