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Facts
The assessee, engaged in the money transfer business, filed a return for AY 2017-18 admitting an income of Rs.3,40,300. The Assessing Officer (AO) noted substantial cash deposits in the assessee's bank accounts, including during the demonetization period, and made additions under sections 143(3) and 68 of the Act.
Held
The Tribunal noted the assessee's failure to participate in the appellate proceedings due to non-receipt of notices. In the interest of justice, the Tribunal decided to provide another opportunity to the assessee.
Key Issues
Whether the assessee was given a reasonable opportunity to present their case before the appellate authority, and if not, whether a fresh opportunity should be granted.
Sections Cited
143(3), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER S.R.RAGHUNATHA, AM:
This appeal of the assessee is filed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18, vide order dated 20.06.2025.
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Brief facts of the case are that the assessee is an individual engaged in the money transfer business and receiving commission for the same and had filed her return of income for AY 2017-18 on 17.08.2017, admitting total income of Rs.3,40,300/-. Based on the information with the department, the assessee made substantial cash deposits in the bank accounts during the year and hence the case was selected for limited scrutiny under CASS and statutory notices were issued accordingly. In response to the notice, the assessee replied through e-proceedings attaching the bank statement. On perusal of the information available with the department and explanation submitted by the assessee, the AO found that the assessee made cash deposits to the tune of Rs.4,01,24,031/- into her six bank accounts, out of which Rs.67,52,200/- was deposited during demonetization period and the assessee was not eligible to receive SBNs from any persons during the demonetization period from 09.11.2016 to 31.12.2016 as per the Governments notification on demonetization. The AO completed the assessment u/s.143(3) of the Act dated 21.12.2019, by making an addition of Rs.67,75,200/- as unexplained cash credits u/s.68 of the Act and amount of Rs.2,05,311/- as business income in addition to the income shown in return of income for the AY.2017-18.
Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT (A), NFAC, Delhi on 29.01.2020. However, the :-3-: ITA 2410/Chny/2025 assessee did not respond to any of the twelve notices issued by the ld.CIT(A) from 08.01.2021 to 12.06.2025 giving an opportunity to the assessee, as shown in the paragraph 4.1 of the order. Hence, the ld.CIT(A) passed an order dated 20.06.2025 by confirming the order of the AO and dismissed the appeal of the assessee.
Aggrieved by the order of the ld.CIT(A), NFAC, Delhi, the assessee is before us.
The Ld.AR for the assessee submitted that the assessee has failed to take note of hearing notices sent through e-mail of former accountant who was resigned from his position without prior notice and the assessee was unaware of subsequent proceedings, resulting in non-participation of assessee during the appellate proceedings. Since, the ld.AR has assured the bench that the assessee will participate in the appellate proceedings given an opportunity again, in the interest of justice, we are of the considered view that the assessee needs to be given one more opportunity to prosecute the appeal on merits.
Per contra, the ld.DR submitted that the Assessing Officer provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices in time and hence, prayed for confirming the order of the ld.CIT(A).
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We have heard rival submissions and perused the materials on record.
The Office of the First Appellate Authority has issued twelve hearing notices as shown in his order in para 4.1. It was the contention of the ld.AR that the assessee had failed to take note of hearing notices sent from the office of the ld.CIT(A). We note that the AO has passed an order by making an addition of Rs.67,75,200/- as unexplained cash credits u/s.68 of the Act and amount of Rs.2,05,311/- as business income in addition to the income shown in return of income for the AY.2017-18 and the same has been upheld by the ld.CIT(A) - NFAC due to non-participation of the assessee before the first appellate authority. Since, the assessee has failed to participate before the appellate authority, we levy the cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee.
Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.
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In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 19th November, 2025 at Chennai.