The Income Tax Appellate Tribunal ( ITAT ), Visakhapatnam recently reverted an Order passed by the Commissioner of Income Taxes (Appeal) – National Faceless Appeals Centre ( CIT(A)-NFAC ) citing the failure of Appellant to appear before the NFAC during proceedings despite multiple intimations.
The Appellate Application along with a petition for condonation of delay was filed by Bhavani Shankar Rao, an Assessee running a ration shop engaged in the distribution of essential goods to white ration card holders as per the State Government’s Public Distribution System.
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It had come to the notice of the Assessing Officer ( AO ) during Assessment Proceedings that the Assessee had made substantial cash deposits towards his bank account, but had failed to file returns of income for the concerned period ,i.e., Assessment Year ( AY ) 2017-18.
The Assessee was subsequently served with a notice under Section 142(1) of the Income Tax Act, 1961 by the AO but the same was to no avail. Upon the Assessee’s lack of response, the AO exercised powers under Section 133(6) of the Income Tax Act to obtain information from the bank authorities and issued summons to the Assessee under Section 131 of the Income Tax Act, 1961.
The Appellant was called upon by the AO to adduce documentary proof, failing which the total income of the Assessee for the A.Y. 2017-18 would be assessed at Rs.20,65,575/-.
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Submissions made by the Assessee were refuted by the AO who passed an Assessment Order confirming the Assessee’s unexplained cash deposits and unexplained online credits of Rs.17,95,500/- and Rs.2,03,787/- respectively, under Section 69A of the Act along with Rs.66,289/- towards interest income not offered to tax.
The Order was appealed by Assessee before the CIT(A)-NFAC, who sent multiple hearing intimations to the Assessee, all falling on deaf ears. In light of the Assessee’s apathy, CIT(A)-NFAC dismissed the Appeal ex-parte.
The Income Tax Appellate Tribunal, Visakhapatnam presided over solely by Duvvuru RL Reddy, Judicial Member observed that the CIT(A)-NFAC had posted the Appellant’s case on several occasions but upon a complete lack of response from the Appellant, proceeded to confirm the additions made by the AO and dismissed the case ex-parte.
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However, the ITAT laid reference to principles of natural justice to opine that the Appellant should be given another opportunity to contest the matter afresh before the CIT(A)-NFAC, and remitted the matter back to the file of the NFAC for meritorious jurisdiction while reprimanding the Appellant to co-operate in the proceedings.
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