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Facts
The assessee's appeal was against the CIT(A)'s order confirming an addition of Rs. 2,11,09,000 as unexplained money. The original assessment was completed ex-parte under Section 144 as the assessee failed to respond to notices, which allegedly landed in the junk folder. The CIT(A) also dismissed the appeal ex-parte.
Held
The Tribunal noted that the assessee was not given a fair opportunity to present their case and had now submitted additional evidence to explain the cash withdrawal. Therefore, the matter was remanded to the CIT(A) for de novo adjudication.
Key Issues
Whether the assessee was denied a fair opportunity to present their case before the lower authorities due to non-receipt of notices and whether additional evidence should be admitted and considered.
Sections Cited
69C, 144, 250, 143(3)
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI ANIKESH BANERJEE & MISS. PADMAVATHY S
Instant appeal of the assessee was directed against the order of the National Faceless Appeal Centre (NFAC), Delhi *in short, ‘Ld.CIT(A)+ passed under section 250 of the Income Tax Act, 1961 (in short, ‘the Act’) date of order 20/12/2024 for A.Y. 2017-18. The impugned order was originated from the order of the Learned Income-tax Officer, Ward 22(1)(5), Mumbai [in short, “Ld. AO”+passed under section 144, date of order 22/12/2019.
2 ITA 456/Mum/2025 Gangadas Jakkula 2. The brief facts of the case are that the assessee is before the Tribunal against the order passed by the Ld. CIT(A) confirming the addition made by the Ld. AO amount to Rs.2,11,09,000/- as unexplained money u/s.69C of the Act, made during the course of assessment proceedings. The assessee filed return of income on 13.10.2017 by declaring total income of Rs.3,07,300/-. The case of the assessee was selected under CASS for ‘limited scrutiny' to verify the substantial cash deposits/withdrawal made during the FY 2016-17 and including during demonetization period. Accordingly, the Ld. AO issued statutory notices calling for information. The Ld. AO on the ground that the assessee has not responded to the notices issued,further on the ground that though the assessee filed return of income, has not declared true incomeand that during the year under consideration hasdeposits/withdrawal for an amount of Rs.2,11,09,000/-, which remained unexplained and accordingly proceeded to complete assessment by determining the income of the assessee amount to Rs.2,14,16,300/-. The Ld. AO confirmed the addition amount to Rs.2,11,09,000/- as unexplained money u/s.69C of the Act.Aggrieved by the assessment order the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) during the course of appeal proceedings issued notices. On the instructions of the assessee, his counsel on 03.03.2022 filed reply requesting time to file written submissions and filed Vakalatnama duly executed by the assessee. However, subsequent to that the hearing notices issued by the Ld.CIT(A) were not received by the assessee as the same were landed in the junk mailbox. The Ld. CIT(A) on the ground that the assessee has not responded to the notices issued, proceeded to dismiss the appeal of the assessee. It is submitted that the assessee came to know about passing of the order by the Ld. CIT(A) only on 27.12.2024 when the assessment the counsel with the 3 ITA 456/Mum/2025 Gangadas Jakkula supporting information with respect to details of business of issuing tickets and money transfer.
It is submitted that the assessee is engaged in the business of ticket issuance and money transfer as an authorised agent. All the cash and credit entries in the assessee's bank account pertain exclusively to such business activities, and the assessee earns commission income on these transactions. In support of the aforesaid claim, the assessee seeks to place on record additional evidence before this Tribunal. The said evidence comprises the following documents: (i) Sub-Agent Agreement with Supreme Securities Ltd. authorising the assessee to undertake money transfer activities; (ii) Form 16A issued by Supreme Securities Ltd.; (iii) Renewal of Licence issued by the Reserve Bank of India in favour of Supreme Securities Ltd.; (iv) Sub-Agent Agreement with Instant Global Money Transfer Pvt. Ltd. for money transfer operations; (v) Certificate issued by the Registrar of Companies reflecting the change in name of Instant Global Money Transfer Pvt. Ltd. to Transfast Financial Services Pvt. Ltd.; (vi) Statement of money transfer transactions conducted by the assessee for the relevant assessment year, along with payment receipts issued to the beneficiaries; (vii) Certificate of Appreciation issued by Riya- The Travel Expert; and (viii) Certificate issued by Paul Merchants appointing the assessee as an Agent Partner for handling transactions related to Western Union International.
4 ITA 456/Mum/2025 Gangadas Jakkula These documents are enclosed in the Assessee's Paper Book (hereinafter referred to as "APB"), spanning pages 1 to 69. Additionally, to substantiate that the assessee is engaged in the business of ticket issuance and authorised money transfers, and that the cash/credit entries in the bank statements pertain to the same, the relevant bank account statements have been submitted at APB pages 70 to 195. It is, however, pertinent to note that all such evidence is being filed for the first time before this Tribunal.
The Ld. AR has prayed for admission of the said additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, as detailed in APB pages A to C.
The Ld. DR has placed reliance on the orders passed by the revenue authorities and has not raised any substantial objection to the admission of the additional evidence.
We have duly considered the rival submissions and perused the materials available on record. It is noted that the assessment was completed ex parte under section 144 of the Act. The assessee had made an attempt to submit the additional evidence before the Ld. CIT(A) and had accordingly filed an adjournment application dated 03.03.2022. However, the Ld. CIT(A) proceeded to dispose of the appeal ex parte without considering the said request.
During the course of hearing before us, the assessee reiterated the submission of additional evidence and further contended, through the Ld. AR, 5 ITA 456/Mum/2025 Gangadas Jakkula that the ex parte assessment order was passed as the notices issued by the Ld. AO had landed in the assessee’s junk email folder. The assessee has now submitted documents afresh before this Tribunal to explain the withdrawal of Rs.2,11,09,000/-. Considering the above, we are of the view that the assessee deserves a fair opportunity to present its case and evidence before the Ld. CIT(A). Accordingly, the matter is remanded to the file of the Ld. CIT(A) for de novo adjudication. We make it clear that no opinion is being expressed on the merits of the case so as not to prejudice the appeal proceedings before the Ld. CIT(A). It is directed that the assessee shall be afforded reasonable opportunity of being heard, and any additional documents or evidence submitted shall be duly considered by the Ld. CIT(A) in accordance with law. Simultaneously, it is expected that the assessee shall diligently cooperate in the appellate proceedings to ensure expeditious disposal of the appeal.