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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC, LUCKNOW
Before: SHRI SUDHANSHU SRIVASTAVA
This appeal has been preferred by the assessee against order dated 21.09.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year (AY) 2013-14.
In this case, action u/s. 147 of the Income Tax Act, 1961 (hereinafter called the ‘Act’) was taken on the basis of information available that the assessee had deposited cash of Rs.41,40,940/- in the Bank account. The return of income was filed by the assessee in response to the notice issued u/s. 148 of the Act. Statutory notices were issued from time to time, requiring the assessee to file the I.T.A. No.339/Lkw/2023 2 relevant details but there was no response from the side of the assessee. Subsequently, on enquiry from the HDFC Bank, Raebareli, it transpired that the assessee had deposited a total amount of Rs.46,19,545/- in the two Bank accounts being maintained by him. Therefore, in absence of any response from the assessee, the assessment was completed at a total amount of Rs.46,19,550/- u/s. 147 r.w.s. 144 of the Act.
Aggrieved, the assessee challenged the assessment before the ld. First Appellate Authority. However, the assessee did not furnish any reply or submission before the NFAC and sought adjournments on two dates whereas there was no compliance on other two dates. Therefore, the NFAC proceeded to dismiss the assessee’s appeal without going into the merits of the case.
Now, the assessee has approached this Tribunal challenging the ex-parte order of the NFAC by raising the following grounds of appeal:
“With reference to the online notice given to the taxpayer for hearing of the appeal you are requested to inform that at the time of filing Appeal Form 35, the taxpayer had chosen the mode of sending the appeal notice not online, whereas all the notices were being sent through online only. Commissioner of Income Tax (Appeals) has passed order against the taxpayer without giving lum a proper opportunity of being heard; you are requested to inform that the said order is in complete disregard of I.T.A. No.339/Lkw/2023 3 the taxpayer's right to legal equality under Article 14 of the Constitution of India. The assessee is a small businessman whose total sales turnover in the financial year 2012-13 was only Rs. 39.75 lakhs. The business started by the assessee as Shri Mahalaxmi Enterprise in the year 2011-12 is submitted as evidence of the TIN issued by the Commercial Tax Department. Due to loss, the taxpayer had closed the said business in 2014-15, online MIS report is sent to the Commercial Tax Department as evidence. View the order issued by Commissioner of Income Tax (Appeals) The first notice to the taxpayer was given through online on 13.01.2021, the date of hearing of the above was fixed as 28.01.2021, due to lack of complete knowledge of the online notice to the taxpayer, information about late notice Therefore, instead of replying on the said due date, the reply was filed on 09.02.2021. After being issued on 13.01.2021, notice was again issued online after 2 years and 5 months, Due to the taxpayer not being familiar with the online notices, the taxpayer was not informed about the first two notices. In the third notice the taxpayer sought an opportunity of being heard and appointed representative to hear the appeal on 12.9.2023, the representative of the taxpayer again sought time to collect the documents, but without giving proper time, the Income Tax Commissioner (Appeals) kept the order of the Assessing Officer as it is, which is completely unfair. Since the taxpayer was a small businessman, he did not have proper knowledge of the seriousness of the appeal documents, hence he did not maintain his documents at the right place, Therefore, due to very late receipt of Appeal notice, the taxpayer again faced delay in finding his old documents. Although the taxpayer had kept his documents at the right place, but they were not available during the hearing. Due to this, the taxpayer missed sending his documents to the Income Tax Commissioner (Appeals), While the taxpayer has all the documents available with you at the time of filing the appeal like purchase bill, bank statement, cash register, bank ledger etc., all the documents received are sent to you for verification. You are requested to inform that the newly created Income Tax Portal built by the Income Tax Department, despite having thousands of employees, does not always function smoothly. And the Income Tax Department wants a small businessman, who is always short of helpers
I.T.A. No.339/Lkw/2023 4 and resources, to immediately dispose of all the notices of the Income Tax Department, which is not completely fair. You are requested to please order the Income Tax Department to get the actual financial condition of any taxpayer physically verified by its departmental inspector etc, while issuing the Income Tax Order. That Whether the actual taxable income of the taxpayer is Rs. 46.19 lakh per annum in the financial year 2012-13, information should be taken from the surrounding neighbors of the taxpayer? Is the actual situation of the taxpayer earning Rs 46.19 lakh annually or not? Whether the income of the taxpayer and the income tax imposed thereon of Rs. 29.76 lakhs is reasonable? How was the justification for imposing such a high amount of income tax? This should be a subject of necessary investigation. You are requested to consider the above facts and all the attached documents and kindly cancel the order of the Tax Assessing Officer, it will be your great pleasure.”
The ld. Authorized Representative submitted that the assessee was a small businessman who did not have a proper knowledge of the appellate procedure and due to lack of knowledge, he missed responding to the first two notices issued by the NFAC and sought adjournments on later two dates as the documents were yet to be located as the business of the assessee had been shutdown. It was submitted that the non-compliance was not intentional but due to lack of knowledge as well as due to difficulty in locating the documents because of the reason of the business having been shutdown. It was prayed that the assessee be provided with another opportunity and it
I.T.A. No.339/Lkw/2023 5 was undertaken that the assessee will comply with the notices and furnish the required documents without delay.
Per contra, the ld. Senior Departmental Representative opposed the prayer of the assessee and submitted that the assessee was a habitual defaulter as was evident from the lack of cooperation before the Assessing Officer as well as before the NFAC and it was submitted that the assessee’s appeal should be dismissed in limine without providing any further opportunity.
I have heard the rival submissions and have also perused the material available on record. No doubt, there was non-compliance before the Assessing Officer as well as before the NFAC. However, in my considered opinion, the assessee has suitably explained the reason for non compliance and, therefore, in the interest of substantial justice, I deem it appropriate to restore the file to the Office of the Assessing Officer with the direction to adjudicate the issues afresh after giving a proper opportunity to the assessee in this regard. I also caution the assessee that in case the assessee fails to the comply during the set aside proceedings before the Assessing Officer, the Assessing Officer shall be at complete liberty to proceed ex-parte qua the assessee and pass a speaking order in accordance with law.
I.T.A. No.339/Lkw/2023 6
In the result, the appeal of the assessee stands allowed for statistical purposes.
(Order pronounced in the open court on 29/02/2024)