NACHIYAPPAGOUNDER MARAPPAN,ERODE vs. ITO, WARD-1(1), ERODE

This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 09.12.2024 for the Assessment Year (hereinafter referred to as "AY”) 2013-14.

At the outset, the Ld.AR of the assessee brought to our notice that the Ld.CIT(A) has merely confirmed the order of the AO passed u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) [ex parte / best judgment assessment] without going into the merits of the contentions/documents submitted by the assessee to substantiate the nature and source of cash deposits made in the assessee’s bank account.

The brief facts are that the AO is noted to have received information that the assessee has deposited cash amounting to Rs.29,09,759/- in his savings bank account maintained with SBI in two different branches and credited a sum of Rs.11,39,759/- through Cemtex/ECS. And noting that the assessee didn’t file any return of income (RoI) for AY 2013-14, he re- opened the assessment by issuing notice u/s.148 of the Act and noted that the assessee despite service of notice didn’t file any RoI along with the details called for by him for proving the nature and source of the cash deposits/credits. Therefore, the AO passed order u/s.144 of the Act making an addition of Rs.29,09,759/- ex parte qua assessee. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to confirm the same blaming the assessee for not producing relevant evidence for establishing the nature and source of cash deposits; and the Ld.CIT(A) is noted to have not discussed anything about the merits of the submissions made before him. We don’t countenance such an action of the Ld.CIT(A) ignoring the merits of the contentions raised by the assessee along with certain documents before him. Having said so, we also don’t countenance the action of the assessee not appearing before the AO during the course of assessment proceedings, though the assessee has brought to our notice that he didn’t receive any notices may be due to glitches in the e-mail account of the assessee. Be that as it may, taking note of the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), finding that the assessee didn’t get proper opportunity before the AO, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO with a direction to frame de novo assessment. The assessee is directed to file relevant documents called for by the AO to prove the nature & source of cash deposits. Further, according to us, since there is negligence on the part of the assessee, cost of Rs.5,000/- is imposed which the assessee should remit to the State Legal Aid Authority, Hon’ble Madras High Court, and produce necessary proof of depositing of the same before the AO and then, the AO to frame the de novo assessment after hearing the assessee in accordance to law.