The present appeal was filed by the assessee against the order dated 28 June 2024 passed by the National Faceless Appeal Centre (NFAC) for Assessment Year 2017-18. The assessee, a civil contractor by profession, had originally filed his return of income declaring total income of ₹2,72,960. The case was selected for scrutiny under CASS, and notices under section 142(1) of the Income-tax Act, 1961 were issued.

During assessment proceedings, the Assessing Officer obtained bank statements under section 133(6) and observed cash deposits aggregating to ₹19,18,000 and further bank credits amounting to ₹29,61,382. In the absence of what was considered satisfactory explanation, the Assessing Officer completed the assessment under section 143(3) read with section 144 and treated the said amounts as unexplained money under section 69A. The total income was accordingly assessed at ₹51,52,342, with application of section 115BBE and initiation of penalty proceedings.

Aggrieved, the assessee preferred an appeal before the CIT(A). However, the NFAC dismissed the appeal in limine for alleged non-compliance, without adjudicating the issues on merits.

Before the Tribunal, the assessee contended that the dismissal of the appeal without a reasoned order violated section 250(6) and the settled principles of natural justice. It was further argued that the additions were made without considering primary records, business withdrawals, redeposit of funds, applicability of peak credit theory, and telescoping of transactions. An alternative plea was also raised seeking restoration of the matter for fresh adjudication with an opportunity to submit additional evidence.

Although none appeared on behalf of the assessee at the time of hearing, the Tribunal examined the record and noted that both the assessment order and the appellate order were passed ex-parte. The Departmental Representative raised no objection to restoration of the matter.

After due consideration, the Tribunal held that the assessee deserved one more opportunity to present his case. Accordingly, the order passed by the NFAC was set aside, and the matter was restored to the file of the Assessing Officer with directions to provide adequate opportunity to the assessee and decide the issue afresh in accordance with law. The Tribunal cautioned that non-compliance by the assessee in the remand proceedings would entitle the Assessing Officer to proceed ex-parte.

The appeal was thus allowed for statistical purposes by the Income Tax Appellate Tribunal.

 

Source Link- https://itat.gov.in/public/files/upload/1767596075-DyVdpQ-1-TO.pdf

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