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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER DUVVURU RL REDDY, Judicial Member :
This appeal filed by the assessee against the order of the Ld. CIT (A)-National Faceless Appeal Centre, Delhi [CIT(A)-NFAC] vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1054718422(1), dated 29/07/2023 arising out of the order passed U/s. 144 of the 2 Income Tax Act, 1961 [the Act], dated 3/12/2019 for the AY 2017-18.
Brief facts of the case are that the assessee is an individual and did not file his return of income U/s. 139(1) of the Act. As
per the information available with the Department, the assessee had deposited cash of Rs. 11,46,500/- in his bank account maintaining with Krishna District Cooperative Bank, Vastsavai during the demonetization period. As the assessee did not file his return of income, a notice U/s. 142(1) was issued on 9/3/2018 and served on the assessee on 14/3/2018 whereby the assessee was asked to file the return of income. Subsequently, the Ld. AO issued notices U/s. 142(1) of the Act dated 17/7/2019 and 5/8/2019 and the assessee was intimated about the completion of assessment U/s. 144 of the Act as the assessee has not filed his return of income. Since there was no response from the assessee, the Ld. AO issued a show cause notice dated 9/9/2019 and the assessee was asked to explain as to why the entire cash deposits in the bank accounts cannot be added as unexplained money U/s. 69A of the Act. In response, the assessee filed his explanation stating that the assessee has received Rs. 23,99,012/- from the sale Subabulu Crop from ITC Ltd.,
3 Badrachalam and the sale proceeds were credited to his Axis Bank Account and the amounts were withdrawn on various dates aggregating to Rs.24,09,000/- out of which the assessee has spent a sum of Rs. 13,34,000/- towards agricultural activities and the remaining amount of Rs. 10,45,500/- was deposited in his bank account during the demonetization period. However, the Ld. AO did not accept the explanation given by the assessee and came to a conclusion that the assessee has no sources to deposit an amount of Rs. 10,00,000/- on 12/11/2016 and therefore, the Ld. AO treated the same as unexplained money U/s. 69A of the Act and brought to tax U/s. 115BBE of the Act. Thus, the Ld. AO completed the assessment U/s. 144 of the Act and passed the assessment order on 3/12/2019 wherein an addition of Rs. 10 lakhs was made by the Ld. AO as explained above. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A)-NFAC.
On appeal, the Ld. CIT(A) dismissed the appeal of the assessee and passed order ex-parte as the assessee did not respond to the notices issued and served on the assessee to make submissions or file the evidences in support of the claim made by the assessee. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in further appeal before us by raising the following grounds of appeal:
“1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) ought to have given one more opportunity to the appellant. 3. Without prejudice to the above, the Ld. CIT(A) is not justified in sustaining the addition of Rs. 10,00,000/- made by the Assessing Officer U/s. 69A of the Act towards alleged unexplained cash deposits in the bank account. 4. Any other grounds may be urged at the time of hearing.”
At the outset, the Ld. AR submitted before us that the Ld. CIT (A)- NFAC has passed ex-parte order without providing proper opportunity to the assessee of being heard. The Ld. AR further submitted that the Ld. AO has also passed the ex-parte order without considering the submissions of the assessee and ignoring the principles of natural justice whereby the assessee has not been provided property opportunity to substantiate the claim of the assessee. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A)-NFAC in order to provide one more opportunity to the assessee of being heard.
Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that several opportunities had been provided to the assessee however, on the given dates of hearing however, neither the assessee nor his Representative appeared / made submissions before the 5 Ld. CIT (A)-NFAC. It was further submitted that the Ld. CIT (A)-NFAC had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A)-NFAC does not call for any interference.
We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that Ld. CIT (A)-NFAC had posted the case on more than two occasions. However, none appeared on behalf of the assessee before the CIT(A)-NFAC on the dates of hearing nor made any submissions to substantiate the claim of the assessee. Therefore, the Ld. CIT (A)-NFAC was left with no other option except to adjudicate the appeal ex-parte based on the material available on record. In this situation, we do not find much strength in the arguments advanced by the ld. AR. However, considering the nature of issues involved in the appeal and also considering the prayer of the Ld. AR, in the interest of justice and also strictly following the principles of natural justice, we hereby remit the matter back to the file of Ld. CIT (A)- NFAC in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A)-NFAC in the proceedings failing which the Ld. CIT (A)-NFAC shall
6 be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.
Pronounced in the open Court on 01st December, 2023.