BHAIRU LAXMAN KUMBHAR,MUMBAI vs. INCOME TAX OFFICER- WARD 42(2)(1), MUMBAI

PER PRABHASH SHANKAR [A.Μ.] :- The present appeal arising from the appellate order dated 19.03.2025 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)"] pertaining to assessment order passed u/s.143(3) of the Income-tax Act, 1961 [hereinafter referred to as “Act"] dated 30.12.2019 for the Assessment Year [A.Y.] 2017-18. The grounds of appeal are as under:

Brief facts of the case are that assessee had filed the return of income for the relevant year under consideration declaring total income at Rs.4,82,930/-.He retired from BMC and received his due of Rs 18,00,000/-. The assessment was completed u/s.143(3) of the Act, determining the total income at Rs 19,82,930/-after making addition of Rs.15,00,000/-,being cash deposit during demonetization period under section 69A of the Act. In the subsequent appeal, the assessee did not attend the appeal proceedings despite several notices of hearing issued by the ld.CIT(A). The assessee failed to produce any documentary evidence in support of the argument made by him in the statement of facts. The appeal filed by the assessee was consequently dismissed. Before us, the ld.AR has contented that the impugned deposits are fully explained and no adverse inference should have been drawn by the authorities below. It is submitted that the assessee had withdrawn cash of Rs.13,00,000/- from his Bank Account with Bank of Maharashtra on different dates. Besides, his son withdrew Rs. 3,00,000/- on 05/11/2016 and gave Rs.2,00,000/- to him for the construction purpose. This resulted in a total of Rs.15,00,000/- which was lying with him before the demonetization on 8th Nov 2016. As soon the Demonetization was announced on 8th Nov 2016 the assessee deposited this total amount of Rs.15,00,000/- in his Bank of Maharashtra Account. From this, it is clear that all the withdrawals are just few days before the Demonetization and deposit in just immediately after the announcement of Demonetization. It is evident that the appellate order has been passed in ex parte manner mainly on account of lack of proper compliance by the assessee during appeal proceedings. Consequently, the ld.CIT(A) has not decided the appeal on merits which is contrary to the mandate of section 250(6) of the Act. A bare perusal of the provision makes it clear that the CIT(A) is bound to dispose of the appeal before him on merits. Once an appeal is preferred before him, then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as per section 250(4) of the Act. However, it is equally true that the assessee himself did not make proper compliance during appellate proceedings.

We have heard both the parties and perused the materials available on record. In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for passing the appellate order de novo. In case of any failure on the part of the assessee, he would be at liberty to pass order after considering the materials on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld.CIT(A). In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 10/09/2025. KAVITHA RAJAGOPAL (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 10.09.2025 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/