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Facts
The assessee deposited a substantial amount of cash in their bank account during the financial year 2017-18, but did not file a return of income. The Assessing Officer (AO) made an addition of Rs. 22,52,043/- under Section 69A for unexplained cash deposits, completing the assessment ex-parte under Section 144.
Held
The Tribunal noted the delay in filing the appeal, which was condoned. Additional evidence was admitted, and considering the lack of proper opportunity before the lower authorities, the case was remitted back to the AO for fresh consideration.
Key Issues
Whether the assessment order is invalid for want of proper service of notices and opportunity to the assessee, and whether the cash deposits were adequately explained by gold loans and agricultural income.
Sections Cited
144, 69A, 133(6), 250, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC - B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU
Date of hearing : 20.02.2025 Date of Pronouncement : 28.03.2025 O R D E R This appeal filed by the assessee is against the order passed by the ld. CIT(Appeals), National Faceless Appeal Centre, Delhi (NFAC) dated 25.01.2024 having DIN ITBA/NFAC/S/250/2023-24/ 1060101795(1) relating to assessment year 2017-18 on the following grounds:-
“1) The order of the learned Commissioner of income tax (Appeal), passed under section 250 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant's case.
2) The appellant denies himself liable to be assessed total income of Rs.22,52,043/-for AY 2017-18 on the facts and circumstances of the case. 3) The Ld.CIT(A) was erred in not appreciating the fact that the order passed by Ld.Assessing Officer under section 144 of IT Act 1961, is void ab initio and liable to be quashed on the facts and circumstances of the case. 4) The Ld.CIT(A) was erred in not appreciating the fact that the assessment order passed by the Ld.Assessing Officer is invalid and void ab initio because the Ld.Assessing officer failed to issue statutory notice before completion of assessment proceedings on the facts and circumstances of the case. 5) The Ld.CIT(A) failed to appreciate that the addition of Rs. 22,52,043 /- being the cash deposited in bank account out of known sources on the facts and circumstances of the case. 6) The Ld.CIT(A) failed to appreciate that the cash deposits were made out of known sources and the provision of section 69A was not attracted in the instant case, on the facts and circumstances of the case. 7) The Ld.CIT(A) failed to appreciate that the deposit in the bank account out off the amount withdrawn from the loan Account on the facts and circumstances of the case. 8) Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies herself liable to be charged to interest under section 234 of the Income Tax Act under the facts and circumstances of the case. The appellant contends that the levy of interest under section 234A , 234 B and 234 C of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case.
9) The appellant craves leave to add, alter, amend, substitute, change and delete any of the grounds of appeal. 10) For these grounds that may be urged at the time of hearing of appeal, the appellant prays that appeal may be allowed for the advancement of substantial cause of justice and equity.”
Briefly stated the facts of the case are that as per information and data analytics under Operation Clean Money, it was noticed that assessee has deposited substantial amount of cash in his bank account, but assessee has not filed return of income. Accordingly opportunity was given to assessee, but the assessee did not avail it and subsequently other statutory notices were issued to the assessee, despite which there was not compliance from the assessee’s side. Thereafter the AO called information u/s. 133(6) from the bank and it was noticed that from 1.4.2016 to 8.11.2016 there was total cash deposit of Rs.10,21,600 and during the demonetisation period there was cash deposit of Rs.12,30,443, resultantly there was total cash deposit of Rs.22,52,043. Notices were issued through ITBA portal, but there was no response from the assessee’s side. Thereafter, cash deposits were added u/s. 69A of the Act. Before completing the assessment, final show cause notice was issued to the assessee and assessment was completed u/s. 144 of the Act.
Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA) raising various issues. The ld. FAA issued various notices to the assessee, but the assessee did not submit any response despite giving many opportunities and adjournment was not sought. The FAA sent 4 notices which were sent through ITBA portal, but all the 4 notices remained uncomplied with. Thereafter the CIT(Appeals) on the basis of material available before him confirmed the assessment order. Aggrieved with the above order, the assessee filed appeal before the ITAT with a delay of 206 days.
The assessee has filed affidavit explaining the reasons for delay and also additional evidence under Rule 29 of the ITAT Rules which is as under:-
The ld. counsel for the assessee reiterated the written submissions noted above. He prayed and undertook that if a chance is given, assessee will explain the cash deposits with known sources.
On the other hand, the ld. DR relied on the order of lower authorities and submitted that before completing the assessment the AO has given show cause notice to the assessee, but there was no response from the assessee’s side. Both the authorities below have given fair opportunities to the assessee. In spite of notices served through ITBA portal, for reasons best known to assessee there was no compliance to any of the notices. The ld. DR further submitted that the ld. CIT(Appeals) has dealt all the issues placed before him in detailed manner and objected for giving further chance to the assessee.
Considering the rival submissions, I note that there is a delay of 210 days in filing the appeal before the ITAT. In this regard assessee has explained the reason for delay and relying on the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal is condoned.
The assessee has filed additional evidence under Rule 29 of the ITAT Rules which relates to the root of the matter, therefore additional evidence filed is admitted. I note from the order of the authorities below that there is no representation from the assessee’s side at any stage. Considering the facts and circumstances of the case and in the interest of justice, I remit this issue back to the file of AO for fresh consideration and decision after giving reasonable opportunity of hearing to the assessee. The assessee is directed to produce all the documents and not seek unnecessary adjournment for early disposal of the case. In case of default, no second leniency will be granted to the assessee.
In the result, accordingly, the appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on this 28th day of March, 2025.