ITAT Restores Appeal Dismissed by NFAC for Non-Compliance & Grants Assessee One Final Opportunity in Interest of Justice [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) restores an appeal dismissed by the National Faceless Assessment Centre (NFAC) for non-compliance & grants the assessee one final opportunity in the interest of justice.

In this case, the assessee, Mahinder Sharma, had appealed against the order passed by the NFAC for the assessment year (AY) 2016-17, which upheld the assessment order dated 14.12.2018, passed under Section 143(3) of the Income Tax Act, 1961.

Coming to the facts of the case, the assessee is a technical consultant by profession and filed his Income Tax Returns for AY 2016-17 on 30-03-2017, declaring a total income of Rs 4.55 crores. The case was selected for limited scrutiny through CASS, and notice under Section 143(2) of the Act was served on the assessee.

After going through the reply submitted by the assessee, the AO has completed the assessment after making the addition of Rs. 4,71,29,759, and penalty proceedings under Section 271(1)(c) of the Income Tax Act were also initiated.

Although the assessee appealed before the NFAC, there were no favourable results.

The assessee’s counsel submitted that the matter was not decided by the NFAC on merit and that a sufficient opportunity to be heard was not provided to the assessee.

The department’s counsel strongly relied on the impugned order and contended that the assessee had taken part in the proceedings but did not make submissions before the NFAC.

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The bench noted that the NFAC had dismissed the appeal in non-compliance, but in the interest of justice, the bench restored the matter to NFAC and directed the latter to give one last opportunity to the assessee to substantiate their claim and decide the issue as per fact and law.

The assessee was directed by the ITAT to appear before the NFAC and cooperate in the proceedings, and the grounds raised by the assessee were accordingly allowed for statistical purposes.

The Delhi ITAT, comprising Manish Agarwal (Accountant Member) and Sudhir Kumar (Judicial Member), allowed the assessee’s appeal for statistical purposes.

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