RAJENDRAN,COIMBATORE vs. ITO, NCW-3(1), COIMBATORE
What did the Tribunal hold?
The Tribunal noted that the assessee had not represented their case before the CIT(A) and the assessment was done based on no explanation. However, considering the principle of natural justice, the Tribunal set aside the order and restored the appeal to the CIT(A) for de novo adjudication.
What were the facts?
The assessee, engaged in the jewellery business, had deposited cash of Rs.34,36,500/- during demonetization. The Assessing Officer (AO) made an addition of this amount as unexplained money as the assessee failed to substantiate its source. The CIT(A) confirmed the addition without any documentary evidence or submissions from the assessee.
What were the issues?
Whether the CIT(A) rightly confirmed the addition of unexplained cash deposits without providing an opportunity for the assessee to present evidence and submissions, and whether a de novo adjudication is warranted on principles of natural justice.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
the impugned order dated 18.01.2024 passed by the ld. Commissioner of Income Tax (Appeals), (NFAC) Delhi [CIT(A)] dated 18.01.2024 for Assessment Year 2017-18.
The registry has noted delay of 331 days in filing the appeal.
Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication.
Brief facts are as follows:-
The assessee is an individual engaged in jewellery business for the past 20 years filed his return of income declaring Rs.7,61,550/- for the AY 2017-18. During the course of assessment proceedings, AO noticed that assessee has deposited cash of Rs.34,36,500/- during demonetization period. In order to verify nature and source of cash deposits, the AO issued notice u/s.142(1) to the assessee on 01.05.2019, requiring the assessee to prove source of cash deposits. Since the assessee failed to substantiate the source of cash deposits made during demonetization period, the AO has made addition of the entire cash deposit amounting to Rs.34,36,500/- u/s.69A as unexplained money.
Aggrieved, the assessee challenged the assessment order before the CIT(A). However, before the CIT(A), the assessee neither filed written submissions nor furnished documentary evidence in support of its claim. Therefore, the CIT(A) confirmed the addition made by the AO u/s.69A of the Act. Aggrieved, now the assessee is in appeal before us.
The learned counsel for the assessee pleaded for one more opportunity of hearing before the CIT(A) to prove the nature and source of cash deposits by filing confirmation letters. The Ld. CIT- DR pleaded for dismissal of the appeal.
We have heard rival submissions and perused material on record. Though we concur with the submissions of Ld. DR, however, keeping in mind the principle of natural justice, we deem it appropriate to grant another opportunity of hearing to the assessee.
We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. Even, assessment has been done on the basis of no explanation by the assessee.
Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for de novo adjudication, after affording proper opportunity of hearing to the assessee, subject to cost of Rs.5,000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before the CIT(A), who shall proceed for fresh adjudication, after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents etc. if any, forthwith without any fail, failing which CIT(A) shall be at liberty to proceed with the proceedings as per law. The ld. AR, who appeared also assured the bench that he will ensure that the assessee will prosecute his case diligently before the CIT(A).
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24th April, 2025
More judgments on Section 142(1)
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