2025 (3) TMI 284 - AT - Income Tax

Assessment u/s 144 - assessee argued that they had not been given a fair opportunity to present their case and provide evidence to support their claims - AO recorded that despite such show cause notice neither the assessee furnished any reply nor any evidence to substantiate the cash deposit - AO made addition on account of cash deposit in absence of evidence - HELD THAT - Assessee explained that notice under section 250 was issued by CIT(A) for filing submission by 09.01.2022 and again vide notice dated 21.02.2022 the assessee filed application for adjournment copy of screen shot of ITBA portal is filed. Assessee sought one-month time and thereafter no notice was received by the assessee. It was also explained the that it is not the case where the assessee has not made compliance rather the assessee is interest in pursuing his appeal and prayed that in the interest of justice matter may be restored back to the file of Assessing Officer to allow the assessee to file submissions and evidence in support of cash deposit. Considering the facts and circumstances of the case and keeping in view the principles of natural justice restore the matter back to the file of Assessing officer to decide the issue afresh. The matter is restored to the file of Assessing Officer keeping in view of the facts that assessment was also completed under section 144. Grounds of appeal raised by the assessee are allowed for statistical purposes.

Summary

The appeal before the Appellate Tribunal concerned an order by the National Faceless Appeal Centre, Delhi for the Assessment Year 2017-18. The core issue revolved around the fairness of the assessment process and the opportunity given to the assessee to present their case. The Assessing Officer and the Commissioner of Income Tax (Appeals) had passed ex parte orders, leading to the appeal by the assessee.The assessee argued that they had not been given a fair opportunity to present their case and provide evidence to support their claims. They contended that despite efforts to comply with show cause notices, the assessment was finalized under Section 144 without considering their submissions. The assessee sought for the matter to be remanded back to the Assessing Officer to allow for the submission of evidence and a fresh decision to be made.On the other hand, the revenue department supported the orders of the lower authorities, asserting that the assessee had been given sufficient opportunities to comply. They argued that the non-compliance by the assessee warranted upholding the additions made in the assessment.After considering the arguments from both parties and reviewing the orders of the lower authorities, the Tribunal found that the Assessing Officer had completed the assessment under Section 144 without adequate response from the assessee. The Tribunal noted that the assessee had failed to provide any evidence to substantiate a cash deposit of Rs. 12,03,000 in their bank account. Similarly, the Commissioner of Income Tax (Appeals) had issued multiple notices to the assessee, but no compliance was made, leading to the confirmation of the addition.In light of the principles of natural justice and the need for a fair opportunity to be given to the assessee, the Tribunal decided to remand the matter back to the Assessing Officer for a fresh decision. The Tribunal directed the Assessing Officer to grant a hearing to the assessee and instructed the assessee to be more diligent in the future to avoid further delays. The assessee was urged to provide all necessary details, submissions, and evidence promptly. The appeal of the assessee was allowed for statistical purposes only, indicating a procedural victory for the assessee without altering the substantive outcome of the assessment.In conclusion, the Tribunal's decision emphasized the importance of procedural fairness and the right of the assessee to present their case effectively. The matter was remanded back to the Assessing Officer to ensure a fair and thorough consideration of the assessee's submissions and evidence, highlighting the significance of adhering to principles of natural justice in tax proceedings.