Non-appearance due to COVID pandemic: ITAT quashes exparte order citing sufficient ground for non-compliance [Read Order]

The Pune bench of the Income Tax Appellate Tribunal (ITAT) quashed the exparte order of the Assessing Officer (AO) accepting that the COVID-19 pandemic was a reasonable and sufficient cause for the non-compliance.

Ahmednagar Auto and Engineering Association (assessee) is a non-profit association that filed Income Tax Return (ITR) and declared Nil income. The Assessing officer (AO) selected the case for complete scrutiny. Therefore, the AO issued notices to the assessee.

The AO noted that the assessee did not file a reply to the notices even after giving several opportunities. The AO completed the assessment and made several additions which amounted to Rs. 3,35,44,438 to the total income. Therefore, the AO passed an ex parte order due to the assessee's absence.

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The assessee filed an appeal before the Commissioner of Income Tax (appeals) [CIT(A)]. The Assessee filed additional evidence to the CIT(A) and contended that due to sufficient cause, the assessee was not able to file before the AO.

However, the CIT(A)rejected the additional evidence filed by the assessee observing that non-compliance to the notices was not due to sufficient cause. The CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A), the assessee filed an appeal before ITAT.

Before the tribunal, no one appeared on behalf of the assessee. The counsel of the revenue relied on the findings of the lower authorities and sought to dismiss the appeal.

The two-member bench comprising Astha Chandra, (Judicial Member) and R.K. Panda (Vice President) observed that the CIT(A) rejected the additional evidence on the ground the assessee failed to prove the sufficient and reasonable cause to non-compliance of notices.

The tribunal also observed that the additional evidence filed by the assessee was significant for the assessment. The tribunal further observed that the notices were issued to the assessee during the COVID-19 pandemic period.

Therefore, the tribunal held that the non-compliance to the notices due to the covid period was sufficient grounds and directed the CIT(A) to admit the additional evidence. Thereby, the appeal was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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