The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has directed the National Faceless Appeal Centre (NFAC) to re-adjudicate the case of a taxpayer who did not respond to notices issued by the NFAC due to his lack of familiarity with the ITBA portal.
The assesse, Krishnan Sivaprasad challenged the NFAC’s 2017-18 assessment order, arguing it is unjustified, unconstitutional, and violates natural justice principles. The assessee challenged the addition of Rs.11,00,000/- as short-term capital gains, denial of exemption to agricultural income, imposition of conditions not prevalent, and high-pitched order. The order also raises concerns about penalty proceedings, demand raising, and interest levying.
The ITAT partially allowed the appeal. The tribunal further reversed the NFAC’s ruling and remanded the case to the NFAC for further review. Because the matter has been sent to the NFAC, the ITAT has declined to comment on the merits of the concerns made before it.
The assessee argued that the addition of Rs. 11,00,000/- as short-term capital gains is not justified, and the denial of exemption to agricultural income is illegal. They argue that the NFAC’s order is based on presumptions and surmises, excessive and unreasonably high-pitched, and that the assessee’s lack of familiarity with the ITBA portal and was a factor in their failure to comply with the notices issued by the NFAC and makes the order unfair.
The NFAC argued that the addition of Rs. 11,00,000/- as short-term capital gains and denial of exemption to agricultural income are justified in law and fact. It further stated that the order is not illegal, and the NFAC can make findings based on assumptions and guesses. The assessee’s failure to comply with the notices and the NFAC’s fair hearing was considered.
The tribunal observed the submissions of the assessee that the NFAC did not consider the specific circumstances of the case, however, the NFAC may argue that its findings were justified. NFAC did not consider the taxpayer’s lack of response to the notices when making its findings. The Second appellate authority noted that the taxpayer had not received any training on how to use the ITBA portal and that they had not been given any clear instructions on how to respond to the notices.
The Two Member Bench of Beena Pillai (Judicial Member) and Chandra Poojari (Accountant Member) partially allowed the assessee’s appeal against the NFAC’s 2017-18 assessment year order, vacating the order and remitting the matter for fresh consideration. The ITAT held that the assessee’s lack of familiarity with the ITBA portal was a factor in their failure to comply with notices and directed the NFAC to give the assessee a fair hearing and consider the assessee’s arguments in detail.
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