SENTHIL KUMAR GOPAL,BANGALORE vs. INCOME TAX OFFICER, WARD-5(2)(3), BANGALORE

Thesetwo appealsare filed by the assessee against the Order passed bythe CIT(A) vide DIN and Order Nos.ITBA/NFAC/S/250/2024-25/1066178015(1) dated 28.06.2024 and ITBA/NFAC/S/250/2024-25/1072020193(1) dated 09.01.2025.

Briefly stated, the facts of the case are that as per information available with the Income Tax Department, during the demonetization period, assessee deposited cash of Rs.11,87,230/- in his bank account maintained in Canara Bank, Lalbagh West Branch, Bangalore, in current A/c. No.0684201001750 and further amount of Rs.76,09,180/- was deposited during rest period of the year. In this regard, various notices were issued to the assessee but there was no compliance from the assessee’s side. The information was obtained from the bank by issue of notice under section 133(6) of the Act and the bank furnished bank statement. For want of explanation from the assessee, the AO, after giving due opportunity to the assessee, the cash deposited during demonetization period of Rs.11,87,230/-- was treated as income under section 69A of the Act and on the balance amount of Rs.76,09,180/-, the AO treated it as business receipts and applied 10% on net income. Accordingly, he completed the assessment under section 144 of the Act and assessed income of Rs.19,48,148/- and passed Order on 16.12.2019 which was served to the assessee on 08.12.2021 as per Form No.35. The assessee filed appeal before the learned CIT(A) on 06.01.2022. The learned CIT(A) provided chances to the assessee and assessee submitted the reason for delay in filing appeal but the reasons explained by the assessee were not accepted by the learned CIT(A) observing that the appeal is not as per provisions of section 249(3) r.w.s. 250 of the Act.

Aggrieved from the above Order, assessee filed appeal before the Tribunal with a delay of 160 days. The learned Counsel has explained the reasons for delay before the learned CIT(A) and Tribunal and reason for ex-parte Order under section 144 of the Act before the AO in the affidavit which is as under:

The learned Counsel reiterated the submissions made before the learned CIT(A) which is placed at page No.23 of the appeal set and submitted that the AO has wrongly considered the amount of Rs.11,87,230/- as cash deposits during the demonetization period. However, the details of the challan of cash deposit in SBNs of Rs.500/- and Rs.1000/- in demonetized currency is Rs.2,45,000/- only. In fact, the total cash deposit was Rs.11,87,230/-. Therefore, Rs.7,60,920/- should be considered as business receipts and requested and undertook that if a chance is given to the assessee, assessee will prove the source of cash deposits. Further, regarding penalty appeal under section 270A of the Act in AO.

On the other hand, the learned DR relied on the Order of the lower authorities and submitted that in spite of giving various opportunities to the assessee before the lower authorities, assessee did not respond to any of the notices. Therefore, he objected to provide further chance to the assessee.

We have heard the parties and noted that the assessee is carrying a small business. The AO has himself accepted as business receipts of Rs. 76,09,180/-. Considering the facts of the case and in the interest of natural justice, we are remitting this issue back to the file of jurisdictional AO for fresh consideration and decide the issue as per law after giving reasonable opportunity of being heard to the assessee and the assessee is directed to substantiate his case with cogent , 230/Bang/2025 Page 5 of 5 documents and not to seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

Since we are remitting the quantum appeal to the jurisdictional AO, appeal in Order passed by the AO and Order of the CIT(A) is in consequential of quantum proceedings. Accordingly, this Appeal is also remitting to the JAO for fresh consideration and decide the issue as per law.

In the result, both the appealsare allowed for statistical purposes. A common Order passed shall be kept in the respective case files.