NADUKANDY PUTHIYAPURAYIL RAYAROTH SHAFEEQUE,KANNUR V. ITO, WARD 1 & TPS, KANNUR

ITA 313/COCH/2025

AI Insights

The case involves an appeal by Sri. Nadukandy Puthiyapurayil Rayaroth Shafeeque against the order of the National Faceless Appeal Centre / CIT(A) for the assessment year 2018-2019. The appellant did not file a regular return of income, leading the Assessing Officer (AO) to issue a notice under section 148 of the Income-tax Act, 1961, based on substantial financial transactions reported. The AO treated all cash deposits as income from paying guest accommodation, estimating profits and making an addition under the head 'business'. The CIT(A) dismissed the appeal for non-prosecution, which led to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found that the CIT(A) should have disposed of the appeal on merits, even ex parte, and remanded the case back to the CIT(A) for a decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314227 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: PCIT v. Premkumar Arjundas Luthra 279 CTR 614
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SENIOR
• Keywords: Opportunity of being heard

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member ITA No.313/Coch/2025 : Asst.Year 2018-2019 Sri.Nadukandy Puthiyapurayil Rayaroth Shafeeque Fathimas, Post Varam Valiyannur, Kannur – 670 594 PAN : AYZPS6237L. v. The Income Tax Officer Ward 1 & TPS Kannur. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Leena Lal, Senior AR Date of Hearing : 05.05.2025 Date of Pronouncement : 08.05.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre / Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 28.02.2025 for the assessment year 2018-2019. 2. Briefly, the facts of the case are that the appellant is an individual. No regular return of income was filed by the appellant u/s.139(1) of the Income-tax Act, 1961 (hereinafter “the Act”) for the assessment year 2018-2019. The Assessment Unit (hereinafter “the AO”) formed an opinion that the income escaped assessment to tax based on the information that the assessee made huge financial transactions amounting to Rs.56,34,852 during the financial year 2017-2018 relevant to the assessment year 2018-2019. Accordingly, a notice u/s.148 of the ITA No.313/Coch/2025. Sri.Nadukandy Puthiyapurayil Rayaroth Shafeeque. 2 Act was issued to the appellant on 27th April, 2022 after passing order u/s.148A(d) of the Act. Subsequently, the AO issued a notice u/s.142(1) of the Act calling upon the appellant to file certain details. The appellant duly complied with the notices issued u/s.142(1) of the Act. Based on the information, the AO treated the entire cash deposits of Rs.1,20,47,806 as gross receipts of income from paying guest accommodation and estimated the profit thereon at the rate of 10%. Accordingly, an addition of Rs.12,04,780 was made under the head “business” vide order dated 5th March, 2024, passed u/s.147 read with section 144B of the Act. 3. Being aggrieved by the above assessment order, an appeal was filed before the CIT(A), contending that the assessment was completed arbitrarily without verifying the documents produced, i.e., the income and expenditure account, balance sheet, etc., and without rejecting the books of account, estimated the gross profit. The CIT(A), vide the impugned order, dismissed the appeal in limine for non-prosecution. 4. Being aggrieved, the appellant is in appeal before the Tribunal, in the present appeal. 5. The learned Senior DR relied upon the orders of the authorities below. 6. I heard the rival submissions and perused the material available on record. I find that the CIT(A) dismissed the appeal in limine for non prosecution. It is settled position of law that the CIT(A), even while disposing of the appeal ex parte, is duty bound to dispose of the appeal ITA No.313/Coch/2025. Sri.Nadukandy Puthiyapurayil Rayaroth Shafeeque. 3 on merits. Reliance in this regard can be placed on the decision of the Hon’ble Bombay High Court in the case of PCIT v. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position, I am of the considered view that the matter requires to be remanded to the file of the CIT(A), with a direction to dispose of the appeal de novo on merits after affording reasonable opportunity of being heard to the assessee. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 08th day of May, 2025. Sd/- (Inturi Rama Rao) ACCOUNTANT MEMBER Cochin; Dated : 08th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "