Nagaraju Kesturkoppal Ramegowda Vs ITO (ITAT Bangalore)
The assessee faced an ex-parte assessment under Section 144 where the AO treated entire bank deposits as unexplained income under Section 69A due to lack of response. The CIT(A) dismissed the appeal on grounds of massive delay (1969 days) without examining merits.
The ITAT condoned the delay considering financial hardship, business closure, and lack of awareness, emphasizing that substantial justice must prevail. It observed that even in ex-parte cases, the AO is duty-bound to make a fair and scientific assessment, and cannot arbitrarily treat gross receipts as income without examining their nature and source.
Holding the assessment to be non-sustainable, the Tribunal set aside the orders of lower authorities and remanded the matter to the AO for fresh adjudication, directing proper inquiry and opportunity to the assessee.
However, due to the assessee’s lapse, a cost of ₹11,000 was imposed payable to the Prime Minister’s Relief Fund. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for the Assessment Year 2017–18.
2. There is a delay of 1969 days in filing the appeal before the learned CIT(A) and a further delay of 51 days in filing the present appeal before this Tribunal. The assessee submitted that the delay occurred due to severe financial hardship, closure of business, and lack of knowledge of the orders passed, as a result of which the appellate remedies could not be pursued in time. It is noticed that the assessment in the present case was completed ex parte under section 144 of the Act and the additions have been made by treating gross receipts as unexplained income without proper verification. Though the delay before the learned CIT(A) is inordinate, considering the peculiar facts, the ex parte nature of the assessment, and the settled principle that the Revenue is duty-bound to frame assessments on a proper and scientific basis irrespective of the conduct of the assessee, we are inclined to condone the delay both before the learned CIT(A) and this Tribunal in the interest of substantial justice.
