2022 (9) TMI 870 - AT - Income Tax

Validity of order of CIT u/s 250 - Addition of cash deposit in the bank account - whether the assessee was informed by his representative or not, find that the ld. NFAC/CIT(A) has dismissed the appeal by passing a non-speaking order? - HELD THAT - The order of NFAC/CIT(A) is not in accordance with mandate of Section 250(6) - Section 250(6) of the Act mandates that the CIT(A) while deciding the appeal is required to pass order on points of determination (grounds of appeals), decision therein on and reasons for such decision. Assessee remained unrepresented before the AO as well as before the CIT(A)/NFAC, therefore, in our considered view, the assessee deserves one more opportunity to explain his case at the end of NFAC/CIT(A), therefore, all the grounds raised by the assessee in the present appeal are restored back to the file of assessing officer to pass the order afresh. The assessee is also given liberty to file all the relevant evidence, information or evidence before the assessing officer without any further delay. Needless to direct that the assessing before passing the order afresh shall grant reasonable and fair opportunity to the assessee. The assessee is also directed to be more vigilant and not to seek adjournment without any valid reason and to make compliance in time. The email address and phone number provided by the assessee, which we have mentioned in the array of parties, may be used for communication of dates of hearing by assessing officer. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.

Summary

Issues:
Appeal against order of CIT(A) - Ex-parte disposal without fair opportunity, Addition made without specifying provisions, Legality of proceedings under section 147, Mechanical recording of reasons, Addition of unexplained cash deposits and credit entries, Opportunity to provide additional evidence.

Analysis:
1. The appeal challenged the CIT(A)'s order for being ex-parte without granting a fair hearing, violating natural justice principles. The grounds included errors in upholding additions without specifying legal provisions and lacking reliable material for income escapement, questioning the legality and validity of proceedings under section 147. The appellant sought quashing of the order.

2. The case involved an individual assessee with unfiled income tax return for AY 2012-13, reopened under section 147 based on cash deposits and credit entries. The AO added unexplained cash deposits and credit entries totaling Rs. 17,34,530 due to non-compliance and lack of explanations from the assessee.

3. The appeal was transferred to NFAC, where it was dismissed ex-parte due to the assessee's failure to respond to multiple opportunities for submission. The appellant contended that non-compliance was unintentional due to uncooperative representation.

4. During the hearing, the AR argued that the assessee, a salaried individual with agricultural income, was unaware of the proceedings due to a temporary shift, and the CA failed to inform timely. The AR requested the opportunity to present evidence or have the case reconsidered by the CIT(A) or AO.

5. The Revenue's representative argued that the assessee neglected opportunities to represent the case, with no valid reasons for non-filing of evidence. The Revenue opposed admitting new evidence at the Tribunal level.

6. The Tribunal found the CIT(A)'s dismissal order lacking proper reasoning as per Section 250(6) of the Act, granting the assessee another chance to explain the case before the CIT(A)/NFAC. All grounds were restored to the AO for a fresh decision, allowing the assessee to submit relevant evidence promptly.

7. The appeal was allowed for statistical purposes only, emphasizing the need for fair opportunities and timely compliance in future proceedings. The decision was pronounced in an open virtual court hearing on 6th September 2022.