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Facts
The assessee's appeal was dismissed by the CIT(A) against an assessment order that added Rs. 33,91,500/- under Section 69A of the Income Tax Act, 1961, for AY 2017-2018. The CIT(A) dismissed the appeal for non-compliance and failure to appear for hearings, despite the assessee claiming non-receipt of notices due to migration of the case to NFAC.
Held
The Tribunal restored the issue to the file of the CIT(A) and granted the assessee an opportunity to present their case. The CIT(A) was directed to adjudicate the appeal afresh after providing a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing a proper opportunity for hearing, especially after the migration of the case to NFAC, and whether Section 69A was correctly applied for the cash deposits made during the demonetization period.
Sections Cited
143(3), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
order : 30.09.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 23/05/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 23/12/2019, passed under Section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2017-2018.
2. The Assessee has raised following grounds of appeal :
1. On the facts and circumstances of the case in law the Ld. CIT(A) erred in confirming the action taken by AO regarding invoking Assessment Year 2017-2018 the provisions of section 69A of the Act, as same is not applicable to the facts of the case.
2. On the facts and circumstances of the case in law the Ld. CIT(A) erred in confirming addition of Rs.33,91,500/- without any reasonable basis.
3. The Assessee reserves his right to amend modify delete and make any additional grounds of appeal”
3. The relevant facts in brief are that the Assessee, a resident individual, filed return of income in the Assessment Year 2017-2018 which was selected for complete scrutiny. Assessment under Section 143(3) of the Act was framed on the Assessee vide Assessment Order, dated 23/12/2019, whereby addition of INR.33,91,500/- was made in the hands of the Assessee under Section 69A of the Act in respect of cash deposits made in the bank account of the Assessee during the demonetization period.
Being aggrieved, the Assessee preferred appeal before the Ld. Commissioner of Income Tax (Appeals) – 44, Mumbai in physical form. Subsequently, the appeal was migrated to National Faceless Appeal Centre (NFAC) in terms of Notification No.76 of 2020, dated 25/09/2020, issued by Central Board for Direct Taxes (CBDT), New Delhi. Vide Order, dated 23/05/2025, Ld. CIT(A) dismissed the appeal preferred by the Assessee which has been impugned by way of present appeal preferred by the Assessee.
The Learned Authorized Representative for the Assessee at the outset requested for setting aside of the impugned order and submitted that the Assessee had failed to make proper representation before the Ld. CIT(A) on account of non-receipt of notice of hearing. We have heard both the sides of this aspect and have perused the material on record.
On perusal of order passed by the Ld. CIT(A), we find that notices of hearing issued by the Ld. CIT(A) were not complied with and 2 Assessment Year 2017-2018 therefore, the Ld. CIT(A) had dismissed the grounds raised
by the Assessee observing that the Assessee had failed to discharge the onus to bring on record material/explanation in support of the contentions. We find that in the Form 35 filed in physical form the Assessee had opted for receipt of notice/communications at the address on record and not through. However, on account of migration of appeal to the NFAC, notices were issued by the Ld. CIT(A) on email. Since the Assessee could not track the appellate proceedings proper representation could not be made before the Ld. CIT(A). Given the facts and circumstances of the present case, we accept the contention of the Assessee and grant Assessee another opportunity to make out the case on merits before the Ld. CIT(A). Accordingly, we restore the issue back to the file of the Ld. CIT(A). The Order, dated 23/05/2025, passed by the Ld. CIT(A) is set aside with the directions to adjudicate the appeal afresh after granting the Assessee a reasonable opportunity of being heard. The Assessee is also directed to co- operate in the appellate proceedings and forthwith file details, documents & submission in support of its claims/contentions before the Ld. CIT(A). The Ld. CIT(A) would be at liberty to admit/consider the same as per law. It is, however, clarified that in case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing issued by the Ld. CIT(A), the Ld. CIT(A) shall be at liberty to decide the issues on merits on the basis of material on record. The Assessee is directed to be vigilant and track the appellate proceedings through Income Tax Business Application Portal. The Assessee is also directed to take necessary steps to bring on record the present/correct email address for communication of order/notices of the appellate proceedings before the Ld. CIT(A). In terms of the aforesaid, and without returning any findings on merits, the Ground No.1 raised by the Assessee is treated as allowed for statistical purposes, and Ground No.2 and 3 are dismissed as having been rendered
3. Assessment Year 2017-2018 infructuous.
In terms of Paragraph 5 above, the appeal preferred by the Assessee is treated as allowed for statistical purposes.