2022 (7) TMI 321 - AT - Income Tax

Ex parte order paased by AO and NFAC - Addition u/s 69A - assessee submitted that due to non-receipt of notice from the Assessing Officer there was non-representation before the Assessing Officer for which he has passed the ex parte order. Similarly, due to lack of proper opportunity granted by the NFAC, the assessee could not file the requisite details before the NFAC for which the NFAC also passed the ex parte order sustaining the addition made by the AO - HELD THAT - We deem it proper to restore the issue to the file of Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer without seeking any adjournment under any pretext failing which the Assessing Officer is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

Summary

Issues:
Delay in filing appeal and condonation application, Dismissal of appeal by NFAC confirming addition made by AO, Non-appearance of assessee before AO and NFAC leading to ex parte order.

Delay in filing appeal and condonation application:
The appeal filed by the assessee was directed against the order of NFAC for the Assessment Year 2017-18, with a delay of 50 days. The assessee filed a condonation application along with an affidavit, which was considered, and the delay was condoned. The appeal was admitted for adjudication.

Dismissal of appeal by NFAC confirming addition made by AO:
The appeal raised by the assessee related to the NFAC's order confirming the addition of Rs. 26,18,786 made by the Assessing Officer. The AO observed cash deposits made by the assessee during demonetization period in a bank account, and despite opportunities, the assessee failed to explain the source of these deposits. The CIT (Appeals) upheld the AO's decision. The Tribunal considered the non-appearance of the assessee before the AO and NFAC, leading to ex parte orders. The Tribunal restored the issue to the AO, directing to grant a final opportunity to the assessee to substantiate the case.

Non-appearance of assessee before AO and NFAC leading to ex parte order:
The assessee did not appear before the AO and NFAC, resulting in ex parte orders being passed. The Tribunal, considering the lack of proper opportunities granted to the assessee, decided to restore the issue to the AO for a final opportunity for the assessee to present their case. The Tribunal directed the assessee to appear before the AO without seeking adjournment, failing which appropriate orders would be passed. The appeal of the assessee was allowed for statistical purposes.

This judgment highlights the importance of timely filing of appeals, the need to provide explanations for financial transactions, and the consequences of non-appearance before the authorities, leading to ex parte orders. The Tribunal emphasized granting opportunities to the assessee to present their case and ensuring procedural fairness in tax assessment proceedings.