The appellant, Shakeel Ahmad, filed an appeal against the order dated 16.08.2022, passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) under section 250 of the Income Tax Act, 1961. The appellant challenged the orders under sections 147/144, 271(1)(b), and 271(1)(c) of the Act, pertaining to the assessment year 2015-16.
Grounds of Appeal
The grounds raised by the appellant are as follows:
The appellant is a small-time trader of raw meat and animal horns, operating in small towns and remote villages with limited banking facilities.
The appellant claimed to have never received any notice under sections 148 and 142(1), thus failing to attend or respond to the proceedings.
The appellant’s total income during the assessment year 2015-16 was below the taxable limit, and income tax returns were not filed. However, returns have been filed from assessment year 2020-21 onwards.
Cash withdrawals from the bank were solely for payment to suppliers, and surplus cash was deposited in the bank account.
The appellant was not given an opportunity to be heard physically or present the matter before the assessing officer or appellate authorities. The appeal was decided without any report from the assessing officer.
The appellant requested the case be remanded to the Assessing Officer for natural justice, given the lack of access to computers and limited banking facilities.
The appellant sought the benefit of cash transactions under Rule 6DD(e)(ii) of the Income Tax Rules, 1961, and relevant CBDT circulars.
The principles of natural justice were violated, as the appellant was not educated or computer-savvy and lacked adequate representation.
The appellant reserved the right to add, amend, or alter any ground of appeal.
Tribunal’s Findings
The Tribunal, comprising Sh. Anil Chaturvedi (Accountant Member) and Sh. Anubhav Sharma (Judicial Member), heard and perused the record. The following key points were noted:
The appellant’s primary grievance was the lack of an opportunity to be heard, which NFAC also failed to address adequately.
The appellant claimed that necessary information was provided to a tax consultant, who failed to represent the case effectively.
NFAC did not appreciate the appellant’s plea, resulting in the dismissal of the appeal on the grounds of insufficient material on merits.
The Tribunal observed that NFAC did not clarify the opportunities given to the appellant for a hearing.
The Tribunal emphasized the need for leniency and proactive measures by tax authorities in providing reasonable opportunities for hearings, especially for small-town traders.
Conclusion and Order
The Tribunal concluded that the issues on merit should be re-determined by giving the appellant an opportunity for a hearing. The appeals were allowed for statistical purposes, and the matter was remanded to NFAC for fresh consideration.
The order was pronounced in the open court on 21.06.2023 by Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member).
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