SUBRAMANI JAYAPRAKASH,SALEM vs. ITO, WARD - 1 (1), SALEM

Brief facts of the case are that from the records available with the Department, the Assessing Officer has noticed that the assessee made substantial cash deposit of in bank account during the financial year 2016-17, but, the assessee has not filed any return of income for the assessment year 2017-18. Hence, a notice under section 142(1) of the Income Tax Act, 1961 [“Act” in short] and other show cause notice were sent to the assessee for his compliance. Since, there was no response from the assessee, a pre-assessment notice dated 04.09.2019 was sent on the proposed additions towards cash deposit of ₹.10,88,000/- during demonetization period in case of any failure on the part of assessee to file the details by 11.09.2019. The AR of the assessee filed a reply vide letter dated 12.09.2019 explaining the sources for cash deposit during demonetization period. Since the assessee has not produced any substantial documentary evidence for his claims of accepting money from his relatives, the Assessing Officer completed the assessment under section 144 of the Act dated 20.09.2019 as unexplained money assessed under section 69A and to be taxed under section 115BBE of the Act of ₹.10,88,000/-. On appeal, the ld. CIT(A)(NFAC) confirmed the addition.

On being aggrieved, the assessee is in appeal before the Tribunal and challenged the exparte order passed by the Assessing Officer under section 144 of the Act without making any proper enquiry despite filing detailed reply towards sources for the cash deposits during demonetization period. When the appeal was taken up for hearing, none appeared on behalf of the assessee and hence we proceed to decide the appeal on merits after hearing the ld. DR.

We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. It is an admitted fact that during the course of assessment proceedings, against the pre-assessment notice, the assessee has filed his reply dated 12.09.2019 explaining the sources for the cash deposits during the demonetization period. However, the Assessing Officer has not made any effort to verify the details submitted by the assessee or called for confirmation towards the claims of accepting money from his relatives as stated in his letter or summoned the relatives under section 133(6) of the Act and recorded their statement, whereas, ignoring the reply filed by the assessee, the Assessing Officer concluded the assessment under section 144 of the Act, appears to be incorrect. The ld. CIT(A)(NAFC) has also simply confirmed the assessment order passed under section 144 of the Act. Under these facts and circumstances, we set aside the orders of authorities below and remit the matter back to the file of the Assessing Officer to call for the details and statements of the relatives whomsoever given money to the assessee and decide the issue afresh in accordance with law by affording sufficient opportunities of being heard to the assessee. The assessee is also directed to furnish complete details before the Assessing Officer without fail.

In the result, the appeal filed by the assessee is allowed for statistical purposes.