DHARAM PAL SINGH,BULANDSHAHR vs. INCOME TAX OFFICER WARD 1(2)(1), MEERUT

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ITA 2993/DEL/2025Status: DisposedITAT Delhi19 September 2025AY 2017-184 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the appeal should be decided on merits as per the provisions of Section 250 of the Act. It was an admitted fact that despite opportunities granted by the NFAC, the assessee did not file his submissions, leading to the dismissal of the appeal ex-parte. The Tribunal noted that the assessee failed to file submissions and did not appear before the lower authorities. Considering the totality of the facts and circumstances and in the interest of justice, the Tribunal deemed it fit and proper to restore the issue to the file of the NFAC. The NFAC was directed to grant one final opportunity to the assessee to substantiate its claim and decide the issue based on facts and law. The assessee was also directed to appear before the NFAC and cooperate in the proceedings. The grounds raised by the assessee were allowed for statistical purposes.

What were the facts?

The assessee, Dharam Pal Singh, is in appeal before the Income Tax Appellate Tribunal (ITAT) against an order of the National Faceless Appeal Centre (NFAC), Delhi, dated March 6, 2025. This order pertains to Assessment Year (AY) 2017-18 and arose from an assessment order dated December 31, 2019, passed under Section 144 of the Income-tax Act, 1961, by the Income-Tax Officer, Ward 1(2)(1), Meerut. The assessee had deposited substantial cash in his bank account during the demonetization period. Following information gathered under "Operation Clean Money," a notice under Section 142(1) was issued. The assessee failed to file a return of income and comply with notices. Consequently, the Assessing Officer completed the assessment under Section 144, making an addition of Rs. 5,01,77,076/- under Section 69A. The NFAC dismissed the assessee's appeal ex-parte.

What were the issues?

1. Whether the Learned Commissioner of Income-Tax (NFAC) erred in dismissing the appeal ex-parte without affording sufficient opportunity of being heard, and whether the Learned Assessing Officer erred in treating the entire deposit of business receipts in the bank account as income? (Question of law and fact, concerning principles of natural justice and the validity of additions under Section 69A). Assessee's contentions: The assessee argued that the NFAC dismissed the appeal ex-parte without providing adequate opportunity to be heard. Additionally, the assessee contended that the Assessing Officer wrongly treated the entire bank deposit as income. Revenue's contentions: The Departmental Representative (DR) argued that departmental authorities passed reasoned orders. The DR also submitted that the assessee did not participate in the proceedings before the NFAC, and therefore, the appeal was rightly rejected by the NFAC. The DR relied on the fact that the assessee did not take part in the proceedings.

Which sections of the Income-tax Act were involved?

Section 144,Section 142(1),Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI

Before: SH. M BALAGANESH & SH. SUDHIR KUMAR

Hearing: 09/09/2025Pronounced: 19/09/2025

Date of hearing: 09/09/2025 Date of Pronouncement: 19/09/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 06-03-2025 pertaining to A.Y. 2017-18 arising out the assessment order dated 31-12-2019 u/s.144 of the Income-tax Act, 1961, (in short ‘the Act’).

2.

The assessee has raised the following ground in appeal :- Learned Commissioner of Income –Tax was erred in dismissing the appeal on ex-parte basis without affording sufficient opportunity of being heard. Learned assessing officer was also erred in treating the entire deposit of business receipts in bank account as income.

3. The brief facts of the case are that the assessee had deposited substantial cash in bank account during the demonetization period (8th November, 2016 to 30th December, 2016). On the basis of the information gathered during the first phase of online verification under “Operation Clean Money” notice u/s 142(1) of the Act was issued to the assessee for filing the return of income for Assessment year 2017-18. The assessee did not file the return of income for A.Y. 2017-18 till 31-03-2018. The assessee did not complied the notices and Assessing Officer completed the assessment after making the addition of Rs. 5,01,77,076/- under section 69A of the Act.

4.

Aggrieved the order of the AO the assessee preferred the appeal before the Ld. NFAC who vide its order dated 06-03-2025 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.

5.

Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the Ld. NFAC. The appeal was rightly rejected by the Ld. NFAC. None is present for assessee.

6.

We have heard the Ld. DR and perused the material available on record. It is an admitted fact that despite opportunities granted by Ld. NFAC, the assessee did not file his submissions, for which the appeal was dismissed ex-parte by the Ld. NFAC.

7.

Since in the instant case the assesse has failed to file his submission after availing the various opportunities. The assessee did not appear before the lower authorities. The Ld. NFAC dismissed the appeal on account of non- prosecution. The appeal should be decided on merit as per the provision of the section 250 of the Act. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it fit and proper to restore the issue to the file of the Ld. NFAC with a direction to grant one final opportunity to the assessee to substantive its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. CIT(A)/NFAC and co-operate in the proceedings. The grounds raised

by the assessee are accordingly allowed for statistical purposes.

8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court 19.09.2025.

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