2018 (5) TMI 1751 - AT - Income Tax

Dismissing the appeal of the assessee vide his impugned order passed ex-parte - Held that - We accordingly impose a cost of ₹ 5,000/- on the assessee for the non-compliant and non-cooperative approach shown during the course of appellate proceedings before the CIT(A) resulting into ex-parte order and direct the assessee to pay the said cost to Prime Minister s Relief Fund. Subject to the said payment, the impugned order of the CIT(A) passed ex-parte is set aside and the matter is restored to the file of the A.O. for deciding the issues relating to the two additions made to the total income of the assessee afresh after giving the assessee one more opportunity of being heard.

Summary

Issues:
1. Dismissal of appeal by Ld. CIT(A) passed ex-parte.
2. Addition of ?22,40,000 to total income for unexplained credit.
3. Disallowance of ?89,646 u/s 14A.
4. Non-compliance with notices by the assessee.

Issue 1: Dismissal of appeal by Ld. CIT(A) passed ex-parte:
The assessee, a doctor, filed an appeal before Ld. CIT(A) challenging the assessment and additions made by the A.O. The Ld. CIT(A) dismissed the appeal ex-parte due to non-compliance by the assessee with hearing notices. The Tribunal acknowledged the lack of documentary evidence at the relevant time but noted the subsequent collection of evidence by the assessee. The Tribunal imposed a cost of ?5,000 on the assessee for non-compliance and set aside the ex-parte order, directing the matter to be sent back to the A.O. for fresh consideration after the assessee pays the cost.

Issue 2: Addition of ?22,40,000 to total income for unexplained credit:
During reassessment, the A.O. added ?22,40,000 to the total income as the assessee failed to provide documentary evidence supporting the remittance from the U.K. The Tribunal, considering the subsequent availability of evidence, directed the A.O. to re-examine this addition after giving the assessee an opportunity to present the documentary evidence.

Issue 3: Disallowance of ?89,646 u/s 14A:
Apart from the unexplained credit addition, the A.O. also made a disallowance of ?89,646 u/s 14A. The Tribunal did not address this issue specifically in the judgment, indicating no challenge or argument presented by the assessee regarding this disallowance.

Issue 4: Non-compliance with notices by the assessee:
The Tribunal highlighted the non-compliant and non-cooperative approach of the assessee towards the notices issued by the Ld. CIT(A) for the appeal hearing. The Tribunal imposed a cost of ?5,000 on the assessee for this behavior, emphasizing the negligent and casual attitude shown by the doctor-assessee. The Tribunal directed the assessee to pay this cost to the Prime Minister's Relief Fund before setting aside the ex-parte order and remanding the matter back to the A.O. for fresh consideration.

This judgment showcases the importance of compliance with hearing notices, the need for documentary evidence to support claims, and the consequences of non-compliance in appellate proceedings. The Tribunal's decision to impose a cost on the assessee serves as a reminder of the responsibilities and obligations of parties involved in legal proceedings.