GUNASEKARAN SANGEETHA,SALEM CEHNNAI vs. ITO CIRCLE 1(1) SALEM, SALEM

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, dated 14.02.2023, and pertains to assessment year 2017-18.

The assessee has raised the following grounds of appeal:

The brief facts of the case are that the assessee is an individual filed her return of income electronically for AY 2017-18 on 31.10.2017, offering a total income of Rs.40,50,100/-. The return of the assessee was processed u/s.143(1) of the Income Tax Act, 1961 (in short “the Act"). Subsequently, the case was selected under CASS for scrutiny. During the process of scrutiny assessment, certain information was called for from the assessee and in response, the assessee has submitted the details through e- proceedings on 27.11.2019 & 28.11.2019 respectively. Subsequently, after examination of the details furnished by the assessee on 20.12.2019, the assessee was show caused by Ld. AO and the assessee has furnished required explanations along with factual details in response to the said show cause. Ld.AO has considered response of the assessee, and after carefully examining the reply submitted by the assessee, has made certain observations. Consequently, an addition on account of unexplained money of Rs.1.80 Crs. was made with regard to cash deposits during the demonetization period by the assessee.

Now, the assessee has filed the present appeal before us to challenge the order of the Ld.CIT(A), NFAC, Delhi, which was an ex parte order. At the outset, ld. AR of the assessee has submitted that since the assessee was unable to submit required details before the Ld.CIT(A), NFAC, because, notices were issued to the assessee during the period between 2020-2022, during which, the business of the assessee was not functioning efficiently due to Covid-19 pandemic, especially in view of complete lockdown. The assessee is a wholesale trader as well as retail trader and the cash deposits during the period of demonetization is erroneously considered as unexplained money in terms of provisions of Sec.69A of the Act. Before ld.AO, the assessee has filed five replies in the assessment proceedings explaining the nature of business and source for cash deposits, but ld. AO has not appreciated the facts of the case correctly. Also First Appellate Authority has issued a non-speaking order on ex parte basis without adjudication of findings on merits. It was the prayer of ld.AR that since, certain evidences are to be submitted to prove that the cash deposits were on account of regular sale of the assessee, if an opportunity is being granted, the same can be produced before the ld.AO for verification/examination and to decide the issue after appreciation of the facts in correct perspective. It is, therefore, submitted that the matter may be remitted back to the file of the AO for re-adjudication.

We have heard rival contentions and perused the order of the authorities below and materials available on record. Admittedly, the order of the Ld.CIT(A), NFAC, Delhi, dated 14.02.2023 was an ex parte order, concluded without deciding the issue on merits, but only on account of no representation by the assessee. Ld.AR of the assessee has also sought for some time before us to furnish further additional details/ evidence in support of the contention of the assessee. In such circumstances, in the interest of natural justice, since, the assessee has requested for time for admission of certain additional evidences which will definitely need to be examined and verify by the Revenue authorities to attain a just and proper

In the result, present appeal, filed by the assessee is partly allowed for statistical purposes, in terms of our observations herein above.