RAVINDRA FINANCE,TRICHY V. .INCOME TAX OFFICER, WARD 2(1), TRICHY

ITA 2639/CHNY/2024

AI Insights

The case involves Ravindra Finance, a firm that did not file a return of income for the Assessment Year 2019-20 despite having received interest income from Tamilnad Merchantile Bank Ltd. and Vythes Mobile Park, Trichy. The Income Tax Officer initiated reassessment proceedings under section 147 of the Income Tax Act, 1961, after the assessee failed to respond to the show cause notice under section 148A. The AO assessed the income as unexplained money under section 69A and passed an ex-parte order. The assessee appealed to the CIT(A), who confirmed the AO's order. Aggrieved by this, the assessee approached the Income Tax Appellate Tribunal, which noted the principles of natural justice and granted another opportunity for a hearing, directing a de novo assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472420 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D. KOMALI KRISHNA; IRS
• Assessee Lawyers: M.K.RANGASWAMY; WAY OF NOTICES US.
• Keywords: Set aside; Reassessment proceedings; Principle of natural justice
• Section: 147

Judgement Text

" आयकर अपीलीय अिधकरण ‘बी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA No.2639/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2019-2020) Ravindra Finance, C-41, 7th Cross, North East Extension, Thillainagar, Trichy 620 018. [PAN: AAAFR 6952Q] Vs. The Income Tax Officer, Ward 2 (1) Trichy. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri M.K. Rangaswamy, C.A., Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. D. Komali Krishna, IRS, CIT. सुनवाई कȧ तारȣख/Date of Hearing : 17.12.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 20.12.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax(Appeals) (NFAC), DELHI [CIT(A)] dated 10.07.2024 for Assessment Year 2019-20. 2. Brief facts of the case are that the appellant is a firm and a non-filer for the year under consideration and specific information was flagged as per Risk Management Strategy formulated by the CBDT for A.Y. 2019-20. As per the specific information, 2 ITA No.2639 /Chny/2024 the appellant has received interest income to the tune of Rs.3,55,301/- from Tamilnad Merchantile Bank Ltd. and interest income of Rs. 2,84,938/- from Vythes Mobile Park, Trichy. Despite the aforesaid transaction and earning taxable income as mentioned supra, the appellant has not filed its return of income for AY 2019-20 Thus, income chargeable to tax has escaped assessment within meaning of section 147 of the Act. Therefore, show cause notice u/s. 148A(b) was issued to the appellant. However, the appellant did not respond to the show cause notice issued u/s. 148A(d), reassessment proceedings in this case were initiated by issuing Notice u/s.148 of the I.T.Act dated 31.03.2023 requiring the appellant to file true and correct income for the A.Y within 30 days from the receipt of the notice. Thereafter several opportunities were accorded to the appellant by way of notices u/s. 143(2), 142(1)/Centralized communication by NEFAC, reminders/SCNs.In response to notice u/s. 148 the appellant filed return of income on 3.4.2023. Subsequently, the AO passed the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the I.T. Act on 22.03.2024and income of Rs.96,58,839/- was assessed treating it as unexplained money u/s. 69A. Aggrieved, the appellant has filed an appeal before the ld. CIT(A). Assessee further challenged the ex-parte order of assessment u/s 147 r.w.s 144 of the Act before the ld.CIT(A) who confirmed the order of the AO on merits. Aggrieved, assessee is in appeal before us. 3. Before the ld. Counsel for assessee submitted that the AO has not properly served notices or given sufficient time to file evidence and documents to substantiate his explanation. The ld.DR stated that the assessee is habitual 3 ITA No.2639 /Chny/2024 defaulter in appearing before the appellate authority hence no lenient view is to be taken in this case and prayed for dismissal of appeal. 4. Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not properly represented before the ld.CIT(A) despite notices. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment on merits. The Ld.AO shall proceed for denovo assessment after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence, confirmations and documents, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the assessment proceedings on merits as per law. 5. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 20th day of December,2024 at Chennai. Sd/- (मनोज क ुमार अŤवाल) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER Sd/- (मनु क ुमार िगįर) (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 20-12-2024 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai/Coimbatore/Madurai/Salem. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "