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Facts
The assessee failed to file a return of income for AY 2015-16, despite substantial cash deposits of Rs. 14.71 crore and purchase of an immovable property. The AO initiated reassessment proceedings under Section 147 and made additions for unexplained cash credit, unexplained investment, and bank interest, assessing a total income of Rs. 7.44 crore.
Held
The Tribunal noted that the assessment orders were ex-parte as the assessee failed to appear and submit evidence before the lower authorities. In the interest of justice, the Tribunal remitted the entire issues back to the AO for fresh adjudication.
Key Issues
Whether the reassessment proceedings and additions made by the AO are justified, considering the assessee's failure to appear and furnish evidence before the lower authorities.
Sections Cited
250, 144, 147, 251, 148, 143(2), 151, 69A, 69, 115BBE, 142(1), 147, 144, 271, 271A, 271B, 271F, 156, 234A, 234B
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Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 12.11.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1070297711(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2015-16.
The assessee has the raised following grounds of appeal:
3. The brief facts of the case are that as observed from the NMS data that during the financial year 2014-15 relevant for assessment year 2015-16, the assessee has made substantial cash deposits of Rs.14,71,44,676/- in his bank account maintained with Canara Bank SBEC Branch Vidyagiri, Bagalkot. Further, it is seen that the assessee has also purchased an immovable property worth Rs.32,46,000/-. However the assessee had not filed his return of income for the assessment year 2015-16. The AO observed that the nature and source of cash deposited by the assessee are not disclosed to the department and accordingly notice u/s 148 of the Act was issued to the assessee after recording the reasons and after obtaining necessary approval. Thereafter notice u/s 142(1) of the Act was issued calling for details. As the assessee is not having e- Mr. Danayya Hiremath, Bagalkot Page 4 of 5 filing account/registered e-mail account on the e-filing portal of the Income tax department, and hence, the case was transferred out of the faceless assessment scheme-2021 to jurisdictional assessing officer for completion of the scrutiny proceedings. The assessee did not respond to any of the notices except a letter requesting for granting time. Finally, the AO issued show cause notice providing an opportunity to explain as to why the assessment should not be completed on best judgement basis u/s 144 of the Act treating the cash deposit as deemed income. Thereafter, the assessee filed a written submission. As the assessee has not maintained any books of accounts despite huge cash receipts and also could not establish the relation between the cash withdrawal there from and redeposit in his bank account, the entire cash deposit of Rs.7,36,52,000/- was treated as unexplained cash credit. Further, with regard to the investment in immovable property, the AO has added Rs.5,93,565/- as unexplained investment u/s 69 of the Act and brought to tax at special rates under section 115BBE of the Act. Lastly, the AO has also added the bank interest amounting to Rs.1,58,816/- as the assessee has not offered the same to tax under “income from other sources” and accordingly assessed on a total income of Rs.7,44,04,381/-.
4. Aggrieved by the assessment completed u/s 147 r.w.s. 144 of the Act dated 31.3.2022, the assessee has preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A)/NFAC dismissed the appeal of the assessee on the ground that in spite of giving 3 nos. of opportunities of being heard, there was no response from the assessee and accordingly held that on the issue of non-appearance alone, the appeal deserves to be dismissed.
We have heard both the parties and perused the materials available on record. Before us, both the parties fairly conceded that Mr. Danayya Hiremath, Bagalkot Page 5 of 5 the orders of the authorities below are ex-parte. Before the ld.CIT(A)/NFAC, the assessee could neither upload any documentary evidence nor filed any submissions. Further the AO has passed Order u/s 147 r.w.s 144 of the Act. This being so, in the interest of justice and fair play and as requested by ld. A.R. of the assessee, we remit the entire issues in dispute to the file of AO to decide afresh in accordance with law. The assessee is also directed to produce all the relevant documents/records/evidence in support of his claim before the AO as required by him. Further, since the assessee was delinquent and lethargic in pursuing his matter before the tax authorities, we impose a cost of Rs. 2000/- upon the assessee which shall be paid to the credit of the income tax department as “other fees” within 15 days from the date of receipt of this order. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.