2024 (2) TMI 1113 - AT - Income Tax

Appeal of the assessee dismissed ex-parte before the revenue authorities - Denial of natural justice - contention of the AR is that neither the assessee nor his representative has received any notices for hearing to prosecute assessee s case with available material evidences and as pleaded to afford another opportunity before the CIT(A) to substantiate his case with evidences. HELD THAT - Keeping in view the principles of natural justice, remit the matter back to the file of the Ld.CIT(A) to afford one more opportunity of being heard to the assessee. Assessee is directed to adhere to the notices issued by the department and cooperate with the proceedings of the revenue authorities. Hence, the grounds raised by the assessee are allowed for statistical purpose.

Summary

Issues involved: Appeal against order u/s 143(3) of the Income Tax Act, 1961 for A.Y. 2016-17.

Summary:

Issue 1: Assessment based on unexplained cash deposits

The assessee filed the return of income admitting a taxable income. The case was selected for limited scrutiny to verify cash deposits made from disclosed sources. Despite notices u/s 143(2) and 142(1) of the Act, no compliance was received. The Assessing Officer completed the assessment based on available information, treating cash deposits as unexplained. The AO passed an ex-parte order u/s 143(3) dated 26.12.2018, assessing the income at a higher amount.

Issue 2: Appeal before CIT(A) and Tribunal

The assessee appealed before the CIT(A) who upheld the AO's order ex-parte. Subsequently, the assessee appealed before the Tribunal raising grounds that total receipts were offered, but not considered by the AO. The assessee claimed lack of knowledge about the case's status and non-receipt of hearing notices. The Tribunal considered the contentions of both parties.

Issue 3: Tribunal's decision and direction

The Tribunal noted that the appeal was dismissed ex-parte before the revenue authorities. The assessee claimed non-receipt of hearing notices to present material evidence. In the interest of natural justice, the Tribunal remitted the matter back to the CIT(A) to provide the assessee with another opportunity to be heard. The assessee was directed to adhere to department notices and cooperate with the proceedings. The Tribunal allowed the grounds raised by the assessee for statistical purposes.

Conclusion:

The Tribunal allowed the appeal of the assessee for statistical purposes, directing a re-hearing before the CIT(A) to substantiate the case with evidences and ensuring compliance with departmental notices.