MANIMARAN GOVINDHARAJU,NAMAKKAL vs. ITO, WARD-3, NAMAKKAL, NAMAKKAL

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 21.06.2023 relevant to the assessment year 2010-11.

Brief facts of the case are that as per the AIR information, the assessee made cash deposits amounting to ₹.10,43,500/- in his savings bank account maintained with the Axis Bank Limited during the financial year 2009-10 relevant to the assessment year 2010-11. However, on verification made in AST, the Assessing Officer found that the assessee did not filed his return of income for this assessment year enabling to verify the source for the deposits. Since the above deposit of ₹.10,43,500/-, being unexplained cash deposits made by him, the Assessing Officer has observed that the same was liable to tax has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961 [“Act” in short]. Accordingly, the Assessing Officer issued notice under section 148 of the Act dated 31.03.2017 and served on 04.04.2018. The assessee has neither filed the return of income nor furnishing any reasons for that. However, the assessee filed his return of income on 18.08.2018 admitting income of ₹.1,63,200/- and paid tax of ₹.620/-. Thereafter, the Assessing Officer again issued notice under section 143(2) of the Act dated 09.11.2018 for furnishing various details on or before 16.11.2018. However, the assessee has not filed any details with evidences/supporting documents in connection with the cash deposits made in his bank account. Thus, the Assessing Officer proceeded to complete best judgement assessment under section 144 r.w.s. 147 of the Act dated 11.12.2018 and brought to tax the entire credits including the cash deposits made into the assessee’s bank account under section 69A of the Act.

The assessee carried the matter in appeal before the ld. CIT(A). Despite ample opportunities by way of hearing notices issued, the assessee has refrained from attending the appellate proceedings and has not furnished any submission, the ld. CIT(A) dismissed the appeal filed by the assessee.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that since the assessee was prevented by reasonable cause, he was unable to furnish any details before the authorities below and prayed that one more opportunity may be afforded to substantiate his case.

On the other hand, the ld. DR strongly supported the orders of authorities below.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Despite various notices issued by the Assessing Officer, the assessee has neither put his appearance nor furnished any details with supporting evidence in response to the notices issued under sections 143(2) and 142(1) of the Act. The ld. CIT(A) has also afforded ample opportunities by issuing various hearing notices, but the assessee was refrained from attending the appellate proceedings and has not furnished any submission. Thus, the appeal filed by the assessee is liable to be dismissed. However, in order to meet the ends of natural justice, we are of the considered opinion that the assessee shall be afforded one more opportunity of being heard to substantiate its case before the Assessing Officer. Accordingly, we set aside the appellate order and remit the matter back to the file of the Assessing Officer to afford one more opportunity of being heard to the assessee to substantiate his case with suitable explanation and evidences and thereafter decide the issue in accordance with law subject to the condition that the assessee should pay ₹.2,000/- to the State Legal Aid Authority, Hon’ble Madras High Court and produce necessary proof of payment of cost before the Assessing Officer.