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Facts
The assessee filed a return of income declaring a total income of Rs.10,53,160/-. The case was selected for scrutiny due to abnormal cash deposits during demonetization. The assessee failed to provide supporting documents or comply with notices, leading the AO to treat a cash deposit of Rs.35,00,000/- as unexplained income.
Held
The Tribunal held that the assessee failed to substantiate the source of the cash deposit, even when claiming it was from sale proceeds. The Tribunal decided to grant the assessee one more opportunity to furnish the evidence and remitted the matter back to the Ld. CIT(A) for fresh adjudication.
Key Issues
Whether the assessee can be granted an opportunity to produce evidence for cash deposits after being non-compliant during assessment and appellate proceedings?
Sections Cited
250, 143(3), 142(1), 68, 115BBE
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Income Tax Appellate Tribunal, MUMBAI BENCH “J(SMC
Before: SHRI ANIKESH BANERJEE & MISS. PADMAVATHY S
Instant appeal of the assessee is 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 10/12/2014 for A.Y. 2017-18. The impugned order was originated from the order of the Learned Income-tax Officer, Ward 2(1), Thane (in short, the “Ld. AO”) passed under section 143(3), date of order 22/12/2019.
2 ITA 866/Mum/2025 Deepak Kumar Jain 2. When the appeal was called for hearing, none was present on behalf of the assessee nor any adjournment petition was filed. Considering the issue in appeal, we proceed to dispose of the appeal exparte qua for assessee after hearing the Ld. DR.
We have heard the submissions of the Ld. DR and perused the documents available on record. The assessee filed the return of income declaring a total income of Rs.10,53,160/-. The case was selected for scrutiny under the CASS for the purpose of verifying abnormal cash deposits made during the demonetisation period as compared to the pre-demonetisation period.Pursuant thereto, the assessment was completed. However, the assessee failed to submit any supporting documents and did not comply with the statutory notices issued by the Ld. AO. Despite the issuance of multiple notices under section 142(1) of the Act, the assessee did not respond or appear before the Ld. AO. Consequently, the Ld. AO treated the cash deposit of Rs.35,00,000/- as unexplained income under section 68 of the Act and accordingly added the same to the total income of the assessee, levying tax under section 115BBE of the Act. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Upon examination of the appellate record, it is evident that the assessee remained non-compliant even during the appellate proceedings and did not make any submissions or appear before the Ld. CIT(A). The relevant observations of the Ld. CIT(A) are reproduced below:— “5.3.2 Appellant has not made any submission as to how the AD is wrong in passing assessment order. Since, the appellant could not submit any material evidences/additional evidences during appeal proceedings substantiating his grounds which could not be produced before the assessing officer, except the documents produced before AO earlier, it clear that the appellant 3 ITA 866/Mum/2025 Deepak Kumar Jain has no strong evidences on his to substantiate his grounds of appeal. Further, it is held by the AO in the Assessment order that the onus is on the assessee to establish the genuineness of the transactions, which in the instant case the assessee has not discharged. In view of the foregoing discussion, I am of the considered opinion that the addition of Rs. 35,00,000/- made by the AO is justified and I hereby confirm the addition. Ground No. 2 is dismissed.”
4. Before the revenue authorities, the assessee submitted that the total turnover for the financial year 2016–17, as per the audited financial statements, amounted to Rs.4,05,48,412/-, and the cash deposit of Rs.35,00,000/- was duly accounted for as part of the turnover. It was thus contended that the source of the cash deposit was attributable to sale proceeds. However, the assessee failed to produce any documentary evidence or supporting material to substantiate this claim.In the interest of justice, we are of the considered view that the assessee ought to be granted one more opportunity to furnish the requisite evidence before the Ld. CIT(A). Accordingly, we set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for fresh adjudication de novo. We make it clear that we are not expressing any opinion on the merits of the case, so as to avoid any prejudice in the appellate proceedings. Needless to say, theassessee shall be afforded a reasonable opportunity of being heard in the set- aside proceedings. Simultaneously, the assessee is expected to act diligently and extend full cooperation to ensure the expeditious disposal of the appeal.
4 ITA 866/Mum/2025 Deepak Kumar Jain 5. In the result, the appeal of the assessee bearing