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Facts
The assessee, engaged in a Tours & Travels business, was assessed ex-parte for AY 2017-18. The AO treated cash deposits and savings bank interest as unexplained income. The assessee claimed to have filed the return and audit report but could not appear due to ill health, and also failed to respond to notices from the AO and CIT(A).
Held
The Tribunal noted that the AO made additions without verifying the return filed by the assessee, and the assessee's failure to appear was due to medical reasons. Consequently, the Tribunal decided to grant one more opportunity.
Key Issues
Whether the ex-parte assessment based on unexplained cash deposits is valid when the assessee claims to have filed returns and provided explanations for delays due to illness.
Sections Cited
144, 69A, 194A, 142(1), 44AB, 139(4), 119(2(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 16/12/2024 in respect of the A.Y. 2017-18 and raised the following grounds:
2. The brief facts of the case are that the assessee is a non-filer and therefore notice u/s. 142(1)(i) was issued on 09/03/2018. The assessee had not filed his return of income inspite of the fact that the assessee had cash deposits into his bank accounts. Thereafter a reminder notice was issued to the assessee for which also the assessee had not responded and therefore the AO had made the best judgement assessment u/s. 144 of the Act. In the assessment order, the AO had treated the cash deposits made into the assessee’s bank accounts as unexplained money u/s. 69A of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A). Even before the Ld.CIT(A), the assessee had not responded to the four notices issued and therefore the Ld.CIT(A) had dismissed the appeal for not seriously pursuing the appeal remedy.
3. As against the said order of the Ld.CIT(A), the assessee is in appeal before this Tribunal.
4. At the time of hearing, the Ld.AR submitted that the assessee was seriously affected by infective Hepatitis and was bedridden for more than 45 days and therefore he was not able to view the portal, in order to file proper explanations to the notices issued by the AO. The Ld.AR further submitted that the assessee had appeared before the AO on 23/09/2019 and also filed his return of income along with the auditor’s report u/s. 44AB of the Act and therefore the allegations made by the AO that the assessee had not appeared is not correct and prayed to grant one more opportunity to appear before the jurisdictional AO to defend their case.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have gone through the assessment order as well as the appellate order and from the assessment order, we came to know that for the various notices issued by the AO, the assessee had not submitted any replies and therefore the AO had made the addition u/s. 69A of the Act on the cash deposited into his bank accounts. Similarly, the assessee had also not appeared before the Ld.CIT(A) also and therefore the said appeal was also dismissed for non-prosecution.
As seen from the facts narrated by the assessee, he had filed his return of income along with the audit report u/s. 44AB of the Act on 31/03/2019 vide acknowledgement no. 456968081310319. We have also considered the reasons for the delay in filing the return. In the assessment order, the AO had specifically averred that the assessee had not responded to the notices issued u/s. 142(1) of the Act whereas the assessee had submitted that return of income was filed along with the audit report u/s. 44AB of the Act and also furnished the acknowledgement number for filing the return of income. This issue has to be verified by the AO based on the documents available in the portal of the department and since the assessment has been made on the basis that no return of income was filed by the assessee, it is but proper for the AO again to look into the documents filed by the assessee on 31/03/2019. But unfortunately, the assessee had not utilised the opportunity provided by the Ld.CIT(A) by filing the written submissions as well as the documents in support of their case.
Considering the entire facts and circumstances of the case, we are inclined to grant one more opportunity to the assessee to appear before the jurisdictional assessing officer along with the necessary documents in support of his return of income filed on 31/03/2019 and the AO is directed to make denovo assessment after hearing the assessee, in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30th June, 2025.