2025 (8) TMI 30 - AT - Income Tax

Assessment order set aside for procedural lapses; appeal dismissed incorrectly as duplicate; remanded for fresh assessment under relevant rules

Rameshlal Sangitha Versus The DCIT, Circle-1 (1), Salem.

ITAT Chennai set aside the assessment order passed by DCIT due to procedural lapses and improper disposal of the appeal by CIT(A), who dismissed it as a ... Validity of assessment order passed by the DCIT - as argued CIT(A) has passed an impugned cryptic order of two lines by stating it to be duplicate appeal and therefore, dismissed it - unexplained unaccounted cash deposits (SBNs). HELD THAT:- No order of CIT(A) disposing of the appeal as observed by Ld CIT(A) is placed on records. Therefore, the impugned action of Ld CIT(A) can’t be countenanced. Be that as it may, since assessee has asserted that she didn’t file any duplicate appeal before the Ld.CIT(A), the reason given by the Ld.CIT(A) can’t be sustained and therefore, it is set aside. As assessee didn’t get proper opportunity before the AO during the assessment proceedings and note that assessee is confined to wheel chair & impaired speech and so is disabled, therefore, relying on the decision of TIN Box Co. [2001 (2) TMI 13 - SUPREME COURT] we set aside the assessment back to the file of the AO for de novo assessment. AR has undertaken to file all relevant documents to substantiate her claim regarding addition of SBNs. Appeal filed by the assessee is allowed for statistical purposes. ISSUES: Whether an ex parte assessment order passed under section 143(3) of the Income Tax Act, 1961, without proper opportunity to the assessee, is valid.Whether the dismissal of an appeal by the Commissioner of Income Tax (Appeals) on the ground of it being a duplicate appeal, without considering the assessee's submissions, amounts to non-application of mind and is sustainable.Whether the assessee's disability and impaired ability to communicate necessitate special consideration in providing opportunity during assessment proceedings.Whether the assessment order can be set aside for de novo assessment when the assessee undertakes to substantiate the nature and source of seized unaccounted cash deposits (SBNs). RULINGS / HOLDINGS: The ex parte order passed by the Assessing Officer under section 143(3) without giving proper opportunity to the assessee is not sustainable, especially when the assessee was not allowed to substantiate claims regarding additions of SBNs totaling Rs. 53,50,000/-.The cryptic order of the Commissioner of Income Tax (Appeals) dismissing the appeal as a duplicate without considering the written submissions and evidences filed by the assessee demonstrates 'non-application of mind' and cannot be countenanced.Considering the assessee's disability, including impaired speech and confinement to a wheelchair, the Court relied on the Hon'ble Supreme Court's decision in TIN Box Co. v. CIT to emphasize the necessity of granting proper opportunity during assessment proceedings.The assessment order is set aside and remanded to the Assessing Officer for de novo assessment, with directions to give the assessee an opportunity to file all relevant documents to substantiate the nature and source of the SBN deposits during the relevant assessment year. RATIONALE: The Court applied the procedural safeguards under the Income Tax Act, 1961, particularly section 143(3), which mandates that assessments must be made after giving the assessee an opportunity of being heard.The principle of 'non-application of mind' was invoked to invalidate the cryptic dismissal by the Commissioner of Income Tax (Appeals), emphasizing that a reasoned order is a prerequisite for judicial scrutiny.The Court referred to the Supreme Court precedent in TIN Box Co. v. CIT [2001] 249 ITR 216 (SC), which underscores the importance of fair opportunity to disabled taxpayers during assessment proceedings.The decision reflects a doctrinal emphasis on procedural fairness and inclusivity for disabled persons in tax proceedings, ensuring that substantive rights are not denied due to physical or communicative impairments.