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TMI Blog2025 (1) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... R PER RAVISH SOOD, JM: The present appeal filed by the assessee firm is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NAFC), Delhi, dated 29.08.2024, which in turn arises from the order passed by the Assessing Officer (A.O.) under Sec. 147 r.w.s. 144B of the Income- tax Act, 1961 (in short 'the Act') dated 03.03.2023 for the assessment year 2018-19. The assessee firm has assailed the impugned order on the following grounds of appeal before us: "1. On the facts and in the circumstances of the case and in law, the Assessment order passed is illegal, bad-in-law and void-ab- initio inasmuch as the Notice u/s 143(2) of the Income Tax Act, 1961 was not issued, whereas, the Learned A.O. had duly mentioned in the assessment order vide para 5 that the income of the assessee is assessed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961. It is prayed that the assessment order may kindly be declared to be illegal and quashed. 2. On the facts and in the circumstances of the case and in law, the Assessment order passed is illegal, bad-in-law and void-ab- initio inasmuch as the assessment proceedings were culminated from noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that on the facts and in the circumstances of the case, the Learned CIT (Appeal), NFAC, Delhi is not justified in passing the order and confirming the addition in an exparte order without providing sufficient opportunity of being heard to the assessee and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal), NFAC, Delhi is liable to be declared as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal), NFAC, Delhi may kindly be declared as illegal and bad-in-law on account of violation of principles of natural justice. 7. The Appellant craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of Appeal" Also, the assessee firm has raised before us additional grounds of appeal, which reads as under: "Additional Ground of appeal No.1. On the facts and in the circumstances of the case, the assessment order passed u/s 144B r.w.s. 144 is illegal, bad-in- law and void-ab-initio inasmuch as the Standard Operating Procedure laid down by the National Faceless Assessment Centre vide file No NaF AC/Delhi CIT- 1/2022-23/112/92 dated 03.08.2022 has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm had during the subject year made cash deposits in its current account with ICICI bank: 1,01,59,420/-; and (ii) the details divulged payment to sub-contractor u/s 194C of the Act: 98,824/-, but had not filed its return of income for the year under consideration, thus, called upon it to put forth an explanation as to why notice u/s 148 of the Act be not issued to bring to tax its income chargeable to tax that had escaped assessment. As the assessee firm failed to respond, therefore, the AO after passing order under clause (d) of the section 148A of the Act, dated 29.03.2022 issued notice u/s 148 of the Act. 4. As the assessee firm in the course of the assessment proceedings failed to respond to the notices which were issued by the A.O. u/s 142(1) of the Act, therefore, the latte was constrained to proceed with and frame the assessment to the best of his judgment u/s 144 of the Act. The A.O., observed that though the assessee firm had income from multi facet sources, viz., (i) income that had sourced the cash deposits in its bank account with ICICI Bank : Rs. 1,01,59,420/-; and (ii) income received from M/s Bharti Axa General Insurance Company Limited (TAN: BLRB06855C) : 98,824/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills Vs. CIT reported in (2008) 2961TR495 (P&H) had returned the reference unanswered, since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that "appeal does not mean, mere filing of the memo of the appeal but effectively pursuing the same". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in ITA No.798 of 2009 held that a negligent appellant should not be given many opportunities just because the quantum of amount involved is high. Necessary course of action is to draw adverse inference, otherwise it would amount to giving premium to the appellant for his negligence. When the appellant is non cooperative, it can safely be concluded that the appellant did not want to adduce evidence as it would expose falsity and non-genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/2011 dated 19.12.2011) has dismissed the appeal for non- attending hearing inferring that the appellant is not effectively pursuing the appeal. 5.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diciously and after taking into consideration all the fact and circumstances of the case." 5.3 In view of the facts of the appellant under consideration and various judicial decisions cited above, I am of the considered opinion that the appellant is not willing to pursue the appeal and reserves his rights merely by filing of the memo of the appeal. Thus, after filing the grounds of appeal and the statement of facts, the appellant has chosen not to attend the hearing, file any written submission or documentary evidences in support of the grounds of appeal and therefore, it is apparent that it does not want to pursue the appeal with any seriousness. In view of this, I am left with no option but to decide the appeal on the basis of material available on records after due consideration. 6. Findings: 6.1 Findings regarding grounds of appeal no.1: The ground of appeal is general in nature and therefore requires no adjudication. 6.2 Findings regarding grounds of appeal no.2: From the perusal of the materials available on record and the Assessment Order, I find that the appellant has submitted no explanation/documentary evidences as to how the AO has erred in making the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and source of cash credits in his accounts and in the absence of satisfactory explanation on his part, the assessing authorities can very well proceed to treat the amount of cash credits in question as representing the taxpayer's income. The Kerala High Court in the case of ITO v. Diza Holdings (P.) Ltd. [2002] 120 Taxman 539 (Ker.) held that it is clear that the burden is on the assessee to offer a satisfactory explanation about the nature and source of the amount found credited in the books of the assessee. The Rajasthan High Court in the case of CIT v. R.S. Rathore [1995] 212 ITR 390 (Raj.) held that while explaining the various credits and investments, it is possible that the assessee may be successful in explaining some of them, but that does not by itself mean that the entire investments has to be considered as explained. It is each and individual entry on which the mind has to be applied by the taxing authority when an explanation is offered by the assessee. The Calcutta High Court in the case of C. Kant & Co. v. CIT [1980] 126 ITR 63 (Cal.) held that in the case of cash credit entry it is necessary for the assessee to prove not only the identity of the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 8. Shri Veekaas S Sharma, learned authorized representative (for short, Ld. AR) for the assessee, at the threshold, submitted that as the AO had failed to adhere to the provisions of section 148A(b) of the Act, therefore, the assessment order passed by him u/s 147 r.w.s. 144B of the Act, dated 03.03.2023 was liable to be struck off. Elaborating on his contention, the Ld. AR submitted that though section 148A(b) of the Act contemplates that the AO shall provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notices is issued, or such time, as may be extended by him on the basis of application in this behalf, as to why a notice u/s 148 should not be issued on the basis of information which suggests that income chargeable to tax ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the lower authorities. As the Ld. AR has assailed the validity of the assessment order passed by the AO u/s 147 r.w.s. 144B of the Act, dated 03.03.2023, inter alia, for the reason that the time limit allowed by the AO u/s 148A(b) of the Act was not as per the mandate of law, therefore, we shall first deal with the same. 11. As stated by the Ld. AR, and rightly so, section 148A(b) of the Act contemplates that the AO shall, before issuing any notice under section 148, provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a). Admittedly, as per the mandate of Section 148A(b) of the Act, it is obligatory on the part of the A.O. to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner/assessee cannot be blamed for not being able to file the reply within such a short period. Thus, it appears that there is a violation of principle of natural justice. Therefore, the prayer made on behalf of the Petitioner/assessee appears to be reasonable. Thus, the order dated 4.4.2022 (Annexure P2) passed under Section 148A(d) of the Act and the notice dated 5.4.2022 (Annexure P3) issued under Section 148 of the Act are quashed and the Respondents are directed to afford proper opportunity of hearing to the Petitioner/assessee and thereafter decide the matter afresh in accordance with law. 7. Accordingly, the instant writ petition is allowed" (emphasis supplied by us) 13. As the facts and issue involved in the present appeal before us, i.e., allowing of unreasonably short period of time by the AO vide notice u/s 148A(b) of the Act remains the same as was there before the Hon'ble High Court, therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations quash the order passed by the A.O. u/s 148A(d) of the Act, dated 29.03.2022 and also notice u/s 148 of the Act, dated 29.03.2022, and restore the matter back to the file of the A.O. with a di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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