KISHORE RAMBILAS KHANDELWAL,YADGIR V. I T O, WARD - 1, YADGIR

ITA 2585/BANG/2024

AI Insights

The case involves Kishore Rambilas Khandelwal, the appellant, who appealed against the orders of the National Faceless Appeal Centre (NFAC) and the Commissioner of Income Tax (Appeals) [CIT(A)] for the assessment year 2015-16. The AO had initially completed the assessment ex parte under sections 144, 147, and 144B of the Income-tax Act, 1961, due to the non-response of the assessee to multiple notices. The CIT(A) also dismissed the appeal for non-prosecution. The ITAT, considering the principles of natural justice and the assessee's willingness to cooperate, decided to remand the case back to the AO for a fresh assessment, providing the assessee an opportunity to explain the nature and source of the income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396811 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: GANESH R GALE; STANDING COUNSEL DEPT.
• Assessee Lawyers: RAVISHANKAR; C.A
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Principle of natural justice; Source of fund; Audi alteram partem
• Section: 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER ITA No. 2585/Bang/2024 Assessment Year: 2015-16 Kishore Rambilas Khandelwal, Municipal No.3-7-142/143, Gandhi Chowk, Yadgir, Gulbarga – 585 201. PAN – AULPK 0581 D Vs. The Income Tax Officer, Ward – 1, Yadagir. APPELLANT RESPONDENT Assessee by : Shri Ravishankar, C.A Revenue by : Shri Ganesh R Gale, Standing Counsel for Dept., (DR) Date of hearing : 07.04.2025 Date of Pronouncement : 28.05.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, New Delhi dated 12/06/2024 in DIN No. ITBA/NFAC/S/250/ 2024-25/1065605186(1) for the assessment year 2015-16. 2. Regarding the delay in filing the appeal by the assessee for 129 days, we note that the assessee has moved condonation petition supported by the affidavit stating that the email ID given to the revenue was created by the tax practitioner and the assessee did not have the relevant details of such email ID. Accordingly the notices issued by the ITA No.2585/Bang/2024 Page 2 of 5 . authorities below were not responded. Nevertheless, the assessee approach to the tax practitioner in the month of December 2024 to enquire about the refund and at that point of time realized the status of the order of the learned CIT-A. As per the Ld. AR, the delay in filing the appeal has happened inadvertently and therefore the same should be condoned. The Ld. DR on the other hand did not raise any objection if the delay is condoned and the appeal is decided on merit as per law. In view of the above, we hold that there was sufficient and reasonable cause which prevented the assessee from filing the appeal within the stipulated time. Accordingly, we condone the delay and proceed to adjudicate the issue on merit of the case. 2.1 The facts of the case, in brief, are that the assessment was completed under sections 144 read with 147 and 144B of the Income- tax Act, 1961, on a best judgment basis. The Assessing Officer (AO) had issued statutory notices under sections 142(1), 148, and also a final show cause notice, but the assessee failed to respond on each occasion despite being provided with multiple opportunities. Consequently, the AO proceeded ex parte and completed the assessment based on information sourced from financial institutions and internal modules, namely AIMS and ITBA. 3. The AO observed that during the financial year 2014–15, the assessee had undertaken substantial transactions without furnishing any explanations or documents regarding the nature and source of such income. These transactions include unexplained cash deposits amounting to ₹28,10,000, unexplained time deposits of ₹16,00,000, interest income of ₹18,314, contract receipts totaling ₹2,60,500, and ITA No.2585/Bang/2024 Page 3 of 5 . commission/brokerage income of ₹2,31,168. Thus, a total addition of ₹49,19,982 was made to the assessee’s income. 4. Aggrieved, the assessee preferred an appeal before the learned CIT(A). However, the ld. CIT(A) also dismissed the appeal due to non- prosecution. The appellate authority recorded that despite issuance of three notices under section 250 between 2022 and 2024, and the opening of a communication window in November 2022 for online submissions, the assessee failed to make any representation or submission. Hence, the appeal was dismissed. 5. Being further aggrieved by the order of the ld. CIT-A, the assessee is now in appeal before us. 6. During the course of hearing, the learned Authorised Representative (AR) submitted that the non-compliance before the lower authorities was due to inadvertent omission and assured the Bench that the assessee is now willing to fully cooperate and comply with all notices. The learned AR requested that the matter may be set aside and restored to the file of the Assessing Officer so that the assessee may be given an opportunity to explain the nature and source of the credits and provide necessary documentation. 7. On the other hand, the learned Departmental Representative (DR), while supporting the orders of the AO and ld. CIT(A), fairly submitted that he has no objection if the matter is remanded to the file of the AO for proper adjudication, provided the assessee complies with the proceedings. ITA No.2585/Bang/2024 Page 4 of 5 . 8. We have heard the rival submissions of both the parties and perused the material available on record. It is not in dispute that the assessment was framed ex parte due to the non-response of the assessee. Further, the appeal before the ld. CIT(A) was also dismissed for want of prosecution. However, now before us, the assessee has expressed willingness to cooperate and submit necessary documents. In our considered view, in the interest of natural justice, one more opportunity should be granted to the assessee to present his case. The principle of audi alteram partem demands that a person be given an effective opportunity to be heard before any adverse inference is drawn. 8.1 Accordingly, we deem it fit to set aside the orders of both the AO and the ld. CIT(A) and restore the matter to the file of the Assessing Officer. The AO is directed to provide adequate opportunity to the assessee to present his case, furnish the necessary documents, and substantiate the claims regarding the sources of income. The assessee is also directed to comply with the notices issued by the AO and not seek undue adjournments. 8.2 We make it clear that if the assessee again fails to cooperate or does not avail the opportunity granted, the AO shall be at liberty to proceed in accordance with law. 9. In the result, the appeal is allowed for statistical purposes. Order pronounced in court on 28th day of May, 2025 Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore, Dated, 28th May, 2025 ITA No.2585/Bang/2024 Page 5 of 5 . / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore "