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Facts
The assessee, a firm, did not file a return of income for AY 2018-19. The AO reopened the assessment based on cash deposits and property sale, making an addition of Rs. 3,74,46,000/- as unexplained money under Section 69A. The CIT(A) dismissed the appeal ex-parte.
Held
The Tribunal held that the assessee was not provided with sufficient opportunity to substantiate its case before the addition was confirmed. Therefore, the matter was remitted back to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without affording sufficient opportunity to the assessee? Whether the addition under Section 69A was justified without proper evidence?
Sections Cited
147, 144, 144B, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 25.02.2025 in the matter of assessment framed by the Assessing Officer [AO] u/s.
Act”) dated 27.03.2023.
There is a delay of 97 days in filing the appeal by the assessee.
The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The assessee is a firm and has not filed the return of income for the relevant assessment year. The A.O, on the basis of information that the assessee had made cash deposits in the bank account of Rs.3,74,46,000/- and sold immovable property of Rs. 4,00,00,000/-, reopened the assessment. Before the A.O, the assessee explained that the cash deposits amounting to Rs.3,74,46,000/- represented collections from chit subscribers, which were deposited into the bank account. However, the A.O did not accept the explanation and completed the assessment under section 147 of the Act, making an addition of Rs.3,74,46,000/- under section 69A of the Act, treating the same as unexplained money. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. had failed to comply with the various notices issued.
The Learned Authorized Representative (Ld. A.R) contended that the Ld. CIT(A) passed order ex-parte without giving sufficient opportunity to substantiate its case. It was therefore submitted that one more opportunity may be granted to the assessee to present its case before the Ld. CIT(A).
The Learned Departmental Representative (Ld. D.R) relied on the orders of the lower authorities and requested that the appeal be dismissed.
We have heard the rival submissions and perused the materials available on record. We find that the Ld. CIT(A) dismissed the appeal ex-parte as the assessee had not responded to the notices issued and had failed to substantiate the nature and source of the cash deposits with supporting evidence such as details of chit subscribers, their names, addresses, PAN, and confirmation letters. In our considered opinion, sufficient opportunity was not provided to the assessee before confirming the addition made under section 69A of the Act. Therefore, keeping in view the principles of natural justice, we are of the view that substantiate its case before the Ld. CIT(A). Accordingly, we set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for fresh adjudication in accordance with law, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with the notices issued by the Ld. CIT(A) and furnish all relevant details in support of its claim for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th day of October, 2025 at Chennai.