Facts of the Case

The assessee, Radhakishan, an agriculturist and senior citizen residing in a remote village, filed no return in response to notice issued under Section 148 dated 24.03.2017 for Assessment Year 2010-11. Based on AIR information indicating cash deposits of ₹12,40,000 in the assessee’s savings bank account, the Assessing Officer issued multiple statutory notices, which remained uncomplied with. Consequently, the assessment was completed ex parte under Section 144 read with Section 147 on 12.12.2017, assessing total income at ₹12,40,000 and treating the cash deposits as unexplained under Section 69A. The first appeal was dismissed ex parte by the faceless CIT(A) on the ground of non-compliance, without adjudicating the issue on merits.

Issues Involved

Whether the delay of 586 days in filing the second appeal deserved condonation, whether the ex parte reassessment and appellate order violated principles of natural justice, whether cash deposits treated as unexplained under Section 69A were in fact attributable to sale consideration of agricultural land, and whether the matter required remand for adjudication on merits.

Petitioner’s Arguments

The assessee submitted that the delay occurred due to lack of awareness of faceless appellate proceedings, old age, agricultural background, and limited access to professional assistance. On merits, it was contended that the entire cash deposit of ₹12.40 lakh represented sale consideration received from sale of agricultural land situated at village Chipher, District Harda, sold for ₹13,75,800. The deposits were made on different dates between 01.05.2009 and 11.03.2010 in the assessee’s bank account. Reliance was placed on bank statements, sale deeds, and the Assessing Officer’s remand report dated 21.01.2020, wherein the sale of agricultural land was acknowledged. It was argued that the faceless CIT(A) failed to consider the remand report and additional evidence already on record.

Respondent’s Arguments

The Revenue did not object to condonation of delay considering the profile of the assessee as a senior citizen agriculturist. It also raised no objection to remand of the matter to the CIT(A), since the remand report and relevant material were already part of the record, though remand to the Assessing Officer was opposed.

Court Order / Findings

The ITAT Indore condoned the delay of 586 days, holding that sufficient cause was shown. On merits, the Tribunal observed that both the reassessment order under Section 144 and the faceless appellate order were passed ex parte and not on merits. The Tribunal noted that voluminous documentary evidence, including sale deeds of agricultural land, bank statements, additional evidence applications, and the Assessing Officer’s remand report dated 21.01.2020, were available on record but were not considered by the CIT(A). In the interest of justice and proper adjudication, the Tribunal set aside the impugned appellate order and remanded the matter to the file of the CIT(A) with a direction to pass a fresh, reasoned order on merits after considering all evidences and the remand report. The assessee was directed to update records and cooperate fully in appellate proceedings.

Important Clarification

The Tribunal clarified that when substantial documentary evidence and remand reports exist on record, dismissal of appeals on grounds of non-compliance without adjudicating merits defeats the principles of natural justice. Faceless appellate authorities are required to meaningfully consider evidence and remand reports before arriving at conclusions.

Final Outcome

The appeal filed by the assessee was allowed for statistical purposes, the impugned order of the CIT(A) was set aside, and the matter was remanded to the CIT(A) for fresh adjudication on merits in accordance with law after granting due opportunity of hearing to the assessee.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769159028_RADHAKISHANKHATEGAONDEWASVS.ITO2DEWASDEWAS.pdf

 

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