ITAT sets aside Ex-Parte Addition Due to Assessee’s Illness, Husband’s Death; Remands Case to CIT(A)

Bachan Kaur Vs ITO (ITAT Chandigarh)

In the case of Bachan Kaur Vs ITO, the ITAT Chandigarh addressed an appeal regarding an ex-parte addition of ₹29.5 lakh made to the income of the assessee for the assessment year 2010-11. The case was reopened based on AIR information indicating significant cash deposits in the assessee’s bank account at the State Bank of India, Pehowa. Subsequently, notices were issued under Section 142(1) of the Income Tax Act, 1961, but the assessee failed to respond due to her illness and the recent death of her husband. Consequently, the Assessing Officer issued an ex-parte order under Section 144, treating the deposits as income from undisclosed sources and adding the amount to the total income.

The assessee appealed against this assessment order, asserting that her failure to comply was due to her health issues and personal circumstances. Despite these claims, the CIT(A) confirmed the addition based on the available records. During the hearing before the ITAT, no one represented the assessee, but the Ld. DR noted that both lower authority orders were issued ex-parte. After reviewing the circumstances, the ITAT recognized the challenges faced by the assessee and decided to set aside the impugned order. The case was remanded back to the CIT(A) for a fresh hearing, providing the assessee an opportunity to present her case. The ITAT directed the assessee to cooperate with the department and indicated that the case would be revisited based on the merits of her submissions.

FULL TEXT OF THE ORDER OF ITAT CHANDIGARH

This is an appeal filed by the Assesee under section 253 of the Income Tax Act, 1961. The relevant Assessment Year is 2010-11. The Assessee is aggrieved by the order bearing No. ITBA/NFAC/S/250/2023-24/1057181465(1) dt. 18/10/2023 of Ld. CIT(A) which is hereinafter referred to as the “impugned order”.

Factual Matrix

2. The case of the Assessee was reopened u/s 147 on the basis of AIR information that there were certain cash deposits in her saving bank A/c maintained with bank State Bank of India, Pehowa. Thereafter notices were issued u/s 142(1) and in the absence of any explanation submitted by the Assessee, an exparte order has been passed u/s 144 of the Act, wherein the Id. AO made an addition of Rs 29,50,000/- treating the deposits in the bank account as income from undisclosed sources in absence of any explanation submitted by the Assessee. Against the impugned assessment order, the Assessee moved in appeal before the Id. CIT(A) under National Faceless Appeal Centre wherein again, there was non compliance on the part of the Assessee and by referring to the material on record, the Id CIT(A) has confirmed the addition. Hence this appeal.

3. The assessee has raised following grounds of appeal before us:

1. That on the facts and circumstances of the case as well as in law, the Appellant could get a chance to submit her submission before the learned CIT (A) due to her illness and death of her husband and the Id. CIT(A) has erred in passing the exparte order, without granting the sufficient opportunity of being heard to the Appellant.

2. That on the facts and circumstances of the case as well as in law, the learned CIT (A) has erred in confirming the action of the learned Assessing Officer in making an addition of Rs. 29,50,000/- u/s 69 of the Income Tax Act, 1961 by treating the deposits in the bank account as income from undisclosed sources.

3. That the Appellant craves leave to amend, alter, add or delete all or any of the above grounds of appeals.

Record of Hearing

4. That the hearing in the matter took place before this Tribunal on 09/09/2024 when nobody appeared for and on behalf of the assessee. The Ld. DR brought to our notice that both the orders of lower authorities are exparte and left it to this Tribunal to pass an appropriate order as per law.

Findings and Conclusions

5. We have perused the records of the case. We have noticed that it is averred that assessee was not well and her husband is no more. Under these circumstances she could not pursue any proceedings before lower authorities diligently. We therefore set aside the impugned order and remand the case back to the file of Ld. CIT(A) who would give final opportunity to her to present her contentions and to thereafter pass a speaking order on merits. We direct assessee to cooperate with Department.

Order

6. In result, the impugned order is set aside as and by way of remand.

7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 13/09/2024