SRINIVASAN KUMAR,TRICHY vs. ITO, WARD-67(6), NEW DELHI

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 16.06.2023 relevant to the assessment year 2012-13.

The appeal filed by the assessee is delayed by one day in filing the appeal, for which, the assessee has filed petition in support of an affidavit for condonation of the delay, to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay in filing of the appeal stands condoned and the appeal is admitted for adjudication.

Brief facts of the case are that as per the AIR information, the assessee made cash deposits amounting to ₹.10,25,000/- in his savings bank account maintained with the City Union Bank Limited. Vide notice under section 133(6) of the Income Tax Act, 1961 [“Act” in short] dated 14.02.2019, the assessee was asked to explain the source of cash deposited in his bank account during the financial year 2011-12. However, no compliance in response to this notice was made by the assessee. Accordingly, notice under section 148 of the Act was issued on 29.03.2019 after recording that income of ₹.1,025,000/- had escaped assessment for the AY 2012-13. However, no return in response to his notice was filed within the stipulated period. Again vide notice under section 142(1) of the Act dated 05.07.2019, the assessee was requested to explain the source of cash deposit of ₹.10,25,000/- in his bank account No. 500101011972078 with City Union Bank Limited, Trichy Branch during the FY 2011-12 along with necessary evidence. No reply in response to this notice was filed by the assessee. Vide letter dated 31.07.2019, the assessee furnished a copy of ITR V in respect of ITR filed by him on 31.07.2019 declaring income of ₹.1,26,110/-. However, the assessee did not furnish the source of cash deposited by him in his bank account. Subsequently, statutory notices under section 143(2) and 142(1) of the Act were issued to the assessee during the assessment proceedings. Vide show cause notice dated 18.11.2019, the assessee was asked to show cause as to why the cash of ₹.10,25,000/- should not be treated as income from undisclosed sources of income and interest of ₹.6,204/- credited in his saving bank account and interest of ₹.16,205/- in respect of FDRs held by him should not be taxed under the head income from other sources. In response to the notice, the assessee has explained that his father had given him ₹.10,00,000/- from 04.10.2014 to 03.06.2015 and this amount was advanced to one Sh. Govidaraman and he deposited cash of ₹.10,25,000/- in his bank account during the FY 2011-12. Vide notice under section 142(1) of the Act dated 02.12.2019, the assessee was asked to furnish the evidence towards money advanced to Sh. Gonvidaraman and cash deposited by him. However, no reply was furnished by the assessee. In the absence of any explanation for the source of cash of ₹.10,25,000/- deposited by him in his bank account, the Assessing Officer has treated the same as income from unaccounted sources and assessed as unexplained money under section 69A of the Act and brought to tax. Further, the interest credited in his account of ₹.6,204/- and interest of ₹.16,205/- towards FDRs held by him were also treated as income and brought to tax. On appeal, the ld. CIT(A) dismissed the appeal for want of satisfactory explanation with documentary evidence on the fresh submissions made by the assessee during appellate proceedings.

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. In the assessment order, the Assessing Officer made additions towards cash deposits in bank account of the assessee of ₹.10,25,000/- and interest thereon of ₹.6,204/- as well as interest of ₹.16,205/- towards FDRs held by the assessee, against which, the assessee preferred an appeal before the ld. CIT(A). However, before the ld. CIT(A), the assessee made fresh submissions in violation of Rule 46A of the Income Tax Rules without corroborative evidence. Before the Tribunal also, the assessee has not filed any suitable explanation with supporting evidence in support of his fresh submissions made before the ld. CIT(A). Thus, 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 with material evidence before the Assessing Officer as prayed by the ld. Counsel for the assessee. 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.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17th October, 2023 at Chennai.