KANAYALAL DAYANAND CHACHRA ,MUMBAI vs. INCOME TAX OFFICER WARD-34(1)(7), MUMBAI

This appeal in for A.Y.2017-18 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) in appeal No.CIT(A)-46, Mumbai/10431/2019-20 dated 22/07/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/12/2019 by the ld. Income Tax Officer Ward-34(1)(7), Mumbai (hereinafter referred to as ld. AO).

The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the addition made u/s.69A of the Act in respect of cash deposits made by the assessee during demonetisation period in the sum of Rs.13,86,500/- in PMC bank and ICICI bank.

None appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. It is not in dispute that assessee had indeed made cash deposits of Rs.13,86,500/- during demonetisation period in PMC bank and ICICI bank maintained by the assessee. The assessee is an individual deriving salary income, income from other sources and commission income. The assessee has been regularly filing its income tax returns for the last 10-12 years and had been maintaining capital account and balance sheet regularly as stated in the statement of facts filed before this Tribunal. It was also pleaded that the balance sheet as on 31/03/2017 and 31/03/2016 was filed by the assessee before the ld. AO. The assessee indeed gave certain explanation for the cash deposits made during the demonetisation period which are mentioned in pages 4-6 of the assessment order. We find that the Revenue had alleged that the assessee had made contradictory statements and had given contradictory explanations with regard to cash balance available with it. Accordingly, the Revenue had proceeded to treat the cash deposits made in the bank account as unexplained cash and made addition u/s.69A of the Act treating the assessee to be the owner of the said money. We find that the ld. CIT(A) had passed an order exparte in the instant case. Though the ld. CIT(A) had given the list of dates on which hearing notices were sent to the assessee by e-mail in pages 3 & 4 of his order, the assessee had rebutted the same in the statement of facts filed before us by stating that notices were issued in bulk folders on the e-mail and assessee could not have access to the said notices. In fact, the last notice dated 20/06/2022 requesting the assessee to appear on 05/07/2022 was received by the Advocate of assessee and on 04/07/2022 the assessee had requested for an adjournment. The second notice dated 11/07/2022 was stated to be not available in the mail ID of the assessee. In these circumstances, we deem it fit to grant one more opportunity to the assessee, considering the fact that assessee has been assessed to tax for the last 10-12 years and has been regularly maintaining its balance sheet which is already part of record before the lower authorities. Hence, we deem it fit and appropriate to remand this appeal to the file of the ld. CIT(A) for denovo adjudication in accordance with law. The assessee is at liberty to adduce fresh and further evidences, if any, in support of its contentions to prove the source of cash deposits made during demonetisation period. The ld. CIT(A) is hereby directed to adjudicate the issue afresh uninfluenced by the decision taken earlier in this regard by duly adjudicating the evidences placed on record by the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

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