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Judgment
PER SUNIL KUMAR SINGH, JM :
This appeal has been filed by the assessee against the impugned order dated 02.01.2026 passed in Appeal No. NFAC/2022-23/10481972 by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”) for the Assessment Year (AY) 2023-24, wherein Ld. CIT(A) has dismissed assessee’s appeal in default of the assessee.
The brief facts of the case are that the assessee is a company and filed its return of income on 20.10.2023 by declaring a total income of Rs. 2,85,02,290/- and book profit of Rs. 3,13,77,631/- u/s. 115JB of the Act. The return of income filed by the assessee was selected for scrutiny under the CASS mechanism. Accordingly, notice u/s. 143(2) of the Act dated 19.6.2024 was issued and served upon the assessee through its registered email address. Thereafter, various notices issued u/s. 142(1) of the Act calling for information and details from time to time and in response to the same, assessee submitted the requisite details and explanations. Subsequently, AO issued show cause notice dated 7.3.2025 proposing to reject the books of accounts and to estimate the net profit at the rate of 8% of the total turnover and in response thereof assesse filed written submission. After considering the submission, AO rejected books of account of the assessee by invoking the provisions of section 145(3) of the Act and proceeded to estimate the net profit at 4% of the total turnover by making addition of Rs. 1,61,11,120/- to the returned income of the assessee.
Aggrieved by the aforesaid assessment order, assessee preferred an appeal before the Ld. CIT(A), who dismissed the assessee’s first appeal in default of assessee.
Against the impugned order, assessee filed appeal before the Tribunal on the ground that Ld. CIT(A) has erred in confirming the addition of Rs. 1,61,11,120/-to the returned income by estimating profit @4% of total turnover without affording sufficient opportunity of hearing to the appellant-assessee.
Ld. AR for the assessee, at the very outset informed that impugned order has been passed by the Ld. CIT(A), exparte in violation of principles of natural justice. Prayed to set aside the impugned order.
Adjournment application has been moved by the ITO, C-Bench on behalf of the Ld. Sr. DR, after perusing the said adjournment application, the same was rejected.
We have heard the Ld. AR and perused the records. We find that in the instant case, AO has passed the assessment order u/s. 143(3) r.w.s. 144B of the Act. We further note that assessee did not respond to the various notices issued by the Ld. First Appellate Authority, who passed exparte impugned order on merit. The reluctant attitude of the assessee cannot be appreciated. However, in the interest of natural justice and fair play, we deem it fit and proper to afford an opportunity to the assessee and thus remit the matter back to the file of the Ld. CIT(A) for adjudication on merits afresh after affording sufficient opportunity of hearing to the assessee. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the Ld. CIT(A) for the expeditious and effective disposal of the appeal. Also, assessee should refrain from seeking any adjournment except for compelling and unavoidable circumstances. Needless to say that the Ld. CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation in respect of the merits of the case. Accordingly, the appeal is liable to be allowed for statistical purposes.
In the result, the Assessee’s appeal is allowed for statistical purposes.