NITIBEN NAYANESHKUMAR TRIVEDI,AHMEDABAD vs. THE ITO, WARD-1(1)(1), AHMEDABAD

The assessee has raised following grounds of Appeal:- “1. The learned CIT(A) erred in law and on facts in granting adequate opportunity of being heard, such opportunity is requested to be granted. 2. The learned CIT(A) erred in law and on facts in confirming the addition made by AO of Rs.16,65,812/- being the Unexplained Money Under section 69A of The Income Tax Act, 1961, such addition is requested to be deleted.”

The brief facts of the case are that as per the information available with the Income-tax Department, the Appellant had undertaken high-value financial transactions during the Financial Year 2017-18 relevant to Assessment Year 2018-19, comprising (i) time deposits aggregating to Rs. 14,00,000 with HDFC Bank Ltd., and (ii) receipt of interest (other than interest on securities) amounting to Rs. 2,65,812 from HDFC Bank Ltd. However, the Appellant had not filed the return of income for the relevant assessment year. Based on the aforesaid information, the case of the Appellant was reopened under the provisions of Section 147 of the Income-tax Act, 1961, and a notice under Section 148 of the Act was issued after recording reasons and obtaining the requisite approval from the competent authority. The Appellant, however, failed to file a valid return of income in response to the notice issued under Section 148 of the Act. During the course of the reassessment proceedings, the Assessing Officer, upon verification of the bank statements, observed that the Appellant had made time deposits of Rs. 14,00,000 in HDFC Bank Ltd. (Account No. XXXXX312364) and had earned interest income of Rs. 2,65,812 from the said bank. The Assessing Officer also noted that the Appellant did not comply with the statutory notices and the show cause notice dated 11.02.2023, nor did the Appellant furnish any explanation regarding the nature and source of the investment or the interest income. In the absence of any explanation or supporting evidence from the Appellant, the Assessing Officer completed the assessment under Section 147 read with Section 144 of the Act and made an addition of Rs. 16,65,812 (being the aggregate of the time deposits and interest income) by treating the same as unexplained money under Section 69A read with Section 115BBE of the Income-tax Act, 1961.

Aggrieved by the Assessment Order, the assessee filed an appeal before the Ld.CIT(A), who dismissed the appeal of the assessee.

On perusal of the records, it is observed that the assessee was afforded four opportunities of hearing on 01.04.2023, 13.01.2025, 14.02.2025 and 06.03.2025 to furnish details, clarifications and explanations to substantiate the source of unexplained money under section 69A of the Act. However, despite being granted multiple opportunities, the assessee remained non-compliant, sought adjournments and failed to furnish the requisite details or explanations before the Ld. CIT(A). Consequently, the Ld. CIT(A), based on the material available on record, upheld the action of the Assessing Officer and dismissed the appeal of the assessee. We further observe that the assessee remained non compliant during the assessment proceedings and also failed to submit any details or supporting evidence to establish the source of unexplained money even before the Assessing Officer. During the course of hearing before us, the Ld. Counsel for the assessee prayed that given an opportunity, the assessee would furnish all the necessary details, clarifications and explanations before the revenue authorities. Considering the totality of the facts and in the interest of justice, we deem it appropriate to remand the matter to the file of the Assessing Officer for conducting the assessment de novo. The assessee is directed to submit all relevant bank statements, documents and explanations before the Assessing Officer and to strictly comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.

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