Tribunal Remands Case for Fresh Adjudication, Directs Fair Hearings and Clear Resolution on Procedural Confusion.

The Tribunal allowed the appeal for statistical purposes, remanding the case to the NFAC for de-novo adjudication. It recognized the assessee's confusion between the Vivad Se Vishwas Scheme and the appeal process, directing the NFAC to conduct three effective hearings and issue a speaking order. The Tribunal emphasized ensuring a fair and just resolution, particularly given the procedural challenges and the need for the assessee to present evidence and make an informed decision. The NFAC's prior ex-parte dismissal was set aside to ensure justice and proper adjudication on the merits.

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Issues:
1. Challenge to the ex-parte dismissal of appeal by the National Faceless Appeal Centre (NFAC).
2. Rejection of books and determination of income by the Income Tax Officer (AO).
3. Confusion regarding pursuing the Vivad Se Vishwas Scheme (VSVS) or prosecuting the pending appeal.

Analysis:
1. The appeal challenged the ex-parte dismissal of the assessee's appeal by the NFAC arising from an order passed by the AO under section 144 of the Income-tax Act, 1961. The assessee, identified as a non-filer, deposited a significant amount of specified bank notes into her bank account. The AO rejected the books of the assessee and treated the deposits as unexplained cash credit. The Tribunal noted the confusion faced by the appellant due to the advice of the tax consultant regarding the VSVS scheme. Despite the confusion, the NFAC proceeded ex-parte, upholding the rejection of books and addition made by the AO. The Tribunal, considering the facts holistically, granted one more opportunity to the assessee for de-novo adjudication by the NFAC for a fair decision on merits.

2. The AO rejected the books of the assessee and framed the assessment under section 144 of the Act, treating the SBN deposits as unexplained cash credit. The burden of proof lay on the assessee to show that the deposits did not represent income. The Tribunal referenced the Supreme Court decision in 'Shashi Garg Vs PCIT' to emphasize that failure to discharge this burden allows the Revenue to assess the deposits as unexplained income. However, the Tribunal acknowledged the genuine confusion faced by the appellant and directed a fresh adjudication by the NFAC to ensure justice.

3. During the first appellate proceedings, the assessee expressed intent to settle the tax dispute through the VSVS scheme but faced challenges in communicating this decision effectively due to the advice of the tax consultant. The NFAC, despite being informed of the situation, proceeded ex-parte, leading to the dismissal of the appeal. The Tribunal, in the interest of justice, ordered a re-examination of the case by the NFAC, allowing the assessee to present evidence and make a clear choice between VSVS and pursuing the appeal on merits. The Tribunal directed the NFAC to conduct three effective hearings and pass a speaking order in accordance with the law.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the need for a fair and just process in tax dispute resolution, especially when faced with genuine confusion and procedural challenges.

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