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Judgment
PER AMITABH SHUKLA, AM,
This appeal filed by the assessee is against order dated 30.10.2025 of the Learned Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre, New Delhi, [hereinafter referred to as ‘ld. CIT(A)] arising out of assessment order dated 15.12.2019 passed u/s 144 of the Income Tax Act, 1961 pertaining to Assessment Year 2017-18. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.That Ld. CIT (A) at National Faceless Appeal Centre erred in dismissing the appeal filed by assessee and confirming the additions made by JAO without giving proper opportunity to assessee which is against the statutory provisions, established principles of law and principles of natural justice and thus deserves to be quashed
2 On the facts and circumstances of the case, the Assessing Officer erred in issuing notice u/s 143(2) of the Income Tax Act, 1961 dated 10.08.2018 in violation of CBDT Instruction F.No.225/157/2017/ITA-Il dated 23.06.2017. Therefore, the said notice is invalid, and assessment framed pursuant thereto is vitiated in law."
3 (a) On the facts and circumstances of the case the notice issued u/s 143(2) by the Ld. ACIT Circle 49(1) is bad in law in the absence of pecuniary jurisdiction as provided in CBDT Instruction No. 1/11, dated 31.1.2011 and the assessment completed by ITO ward 35(5) on the basis of un-jurisdictional notice is also bad in law.
(b)On the facts and circumstances of the case, the assessment made by Assessing officer ward 35(5), to whom the records were transferred by ACIT Cir.49(1)/ITO Ward 38(5), is bad in law without issue of any fresh notice u/s 143(2).
(c)Alternatively on the facts and circumstances of the case, the assessment made by ITO ward 35(5), to whom the records were transferred by ACIT Cir.49(1)/ITO Ward 38(5), is bad in law without transfer of jurisdiction by passing proper orders u/s 127 of the Act.
4(a) That on the facts and in the circumstances of the case the Ld. CIT(A) is not justified in confirming the addition Rs.7,55,80,168 on estimated basis being @ 8% of cash deposited in bank (on deposit of Rs.94,47,52,100/-) whereas proper books of accounts are maintained and sources of cash deposit are sale proceeds in cash as declared in financial accounts.
(b)Alternatively, and without prejudice to above, the Ld. CIT(A) is not justified in making addition of Rs.7,55,80,168/- to returned income of Rs. 10,64,650/- as the overall income is estimated at Rs.7,55,80,168/-being @ 8% of cash deposit, therefore the returned income is to be ignored as making addition to it will lead to double taxation.
5 That on the facts and in the circumstances of the case the Ld. CIT(A) erred in confirming the addition made u/s 68 of the Act without appreciating that provisions of Section 68 are not applicable in the facts and circumstances of the case.
6 That on the facts and in the circumstances of the case the Ld. CIT(A) erred in confirming the invoking of provisions of section 115BBE whereas the same are not applicable in case of assessee for AY 2017-18.
7.That the Ld. CIT (A) is not justified in confirming the levy of interest U/s 234B & 234C which is without passing the speaking order.
The assessee through the above grounds of appeal is contesting the order of ld. CIT(A) and ld. AO both on legal grounds as well as merits of addition.
Heard both the parties. Materials available on records are perused.
The ld. Counsel for the assessee has submitted the following brief factual matrix of the case. Return declaring income of Rs.10,64,650/- was filed by the assessee. Considering no response to statutory notice, the ld. AO completed the ex-parte best judgment assessment u/s 144 determining total income at Rs.7,55,80,168/- after making addition of Rs.10,64,650/-. The Ld. AO had made the impugned addition in the light of unexplained cash deposits of Rs.94,47,52,100/-. The ld. AO treated 8% of such deposits as the undisclosed income of the assessee. Provisions of section 115BBE were also invoked. Aggrieved by the impugned assessment order, the assessee filed appeal before the ld. CIT(A). The Ld. First Appellate Authority also confirmed the addition made by the ld. AO in view of the fact that the assessee chooses not to respond to statutory notices issued by him.
Before us, the assessee has vide its application dated 25.03.2026 under Rule-29A of the ITAT Rules requested for admission of additional evidences. It was submitted that the assessee is a proprietor of Venkatswami Trading Company, Guwahati and Krishna Traders, Delhi. The ld. Counsel submitted that the assessee is an uneducated person having no knowledge of electronic communication. For Income Tax Proceedings, e-mail Id of an former employee was used. As the said employee have left, assessee’s employment revenue’s communications got unresponded. It was accordingly requested that the additional evidences which were now been filed may be considered for admission as they go to the root of the matter.
The ld. DR placed reliance upon the orders of the lower authorities. It was contended that the assessee is a habitual defaulter and that cost be imposed upon the assessee.
It is undisputed facts on record that both the lower authorities have passed ex-parte order while drawing their conclusions. Fair opportunity of being heard is a natural right of every litigant. Without prejudice, we have also noted that the appellant has not responded to notices of lower authorities. We are also conscious of the fact that no appellant benefits by non-prosecution of its case. Be that as it may be, we are of the view that the matter deserves to be remitted back to the ld. AO for re-adjudication de novo. Accordingly, we set-aside the order of the lower authorities and remit the matter back to the file of the ld. AO for assessment de novo in accordance with law and by way of passing a speaking order. The Ld. AO shall give opportunities of being heard to the assessee and it shall be bounden upon the assessee to comply with the notices issued by the Ld. AO Any non-compliance on the part of the assessee can be adversely viewed. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. This order is however subject to deposit of a cost of Rs.10,000/- to the Prime Minister Relief Fund within 30 days of the receipt of this order. The appellant shall file a copy of the same before the ld. Assessing Officer. Accordingly, the appeal of the assessee is allowed for statistical purposes.
As the appeal of the assessee is allowed for statistical purposes, all other grounds of appeal contesting the merits of the addition have become academic in nature and hence kept open.
In the result, the appeal of the assessee is allowed for statistical purposes.