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Facts
The assessee, a milk vendor, filed an ITR which was later selected for scrutiny due to large cash deposits in bank during the demonetization period (AY 2017-18). The Assessing Officer made additions of ₹.11,28,500/- for cash deposits in old SBNs under Section 69 and ₹.10,12,224/- as 8% of total turnover. The Ld. CIT(A) dismissed the assessee's appeal ex-parte due to non-response to hearing notices.
Held
The Tribunal noted that the assessee had provided details to the AO but failed to respond to the Ld. CIT(A)'s notices. In the interest of justice, the Tribunal decided to remand the matter to the file of the Ld. CIT(A) to decide the issue afresh, providing the assessee another opportunity to be heard and present submissions/evidence.
Key Issues
Whether the Ld. CIT(A) was justified in confirming additions for SBN cash deposits and 8% of turnover without hearing the assessee; and whether the assessee should be granted another opportunity to present their case before the Ld. CIT(A).
Sections Cited
250, 69, 143(1), 143(3)
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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K., VICE- & SHRI S.R. RAGHUNATHA
आयकर अपीलीय अिधकरण,‘डी’ �ायपीठ,चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL‘D’ BENCH, CHENNAI �ी जॉज� जॉज� के., उपा�� एवं �ी एस.आर.रघुनाथा, लेखा सद� के सम� BEFORE SHRI GEORGE GEORGE K., VICE-PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपीलसं./ITA No.: 306/Chny/2025 िनधा�रण वष� / Assessment Year: 2017-18 Kabali Sivakumar, Income Tax Officer, 24, Vanniyar Street, Triplicane, Vs. Non Corporate Ward -9(4), Chennai 600 005. Chennai. [PAN: DMVPS-6280-J] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� कीओर से/ Appellant by : Shri N. Arjun Raj, Advocate ��थ� की ओर से/Respondent by : Shri A. Sasi Kumar, CIT सुनवाई की तारीख/ Date of hearing 19.03.2025 : घोषणा की तारीख /Date of Pronouncement : 17.04.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, under section 250 of the Income Tax Act, 1961 [“Act” in short] dated 29.11.2024 pertains to the assessment year 2017-18.
The assessee raised 15 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the additions of ₹.11,28,500/- being the cash
:-2-: ITA. No: 306/Chny/2025 deposits made in SBNs during the demonetization period under section 69 of the Act and ₹.10,12,224/- being 8% of total turnover as income from business after considering the sum offered to tax by passing ex- parte order in the facts and circumstances of the case.
Brief facts of the case are that the assessee is an individual and filed his return of income declaring an income of ₹.3,72,150/-. The return filed by the assessee was processed under section 143(1) of the Act and subsequently, selected for scrutiny under CASS to verify large cash deposited in bank account. In response to the notices, the assessee filed note on the milk business, copy of distributor agreement with Hatsun Agro Product Limited, copy of bank statement, details of cash deposits made by the assessee in bank account, revised statement of total income, profit & loss account and balance sheet. After examining the details furnished by the assessee, the Assessing Officer noted that the assessee made total cash deposits of ₹.1,46,36,860/- out of which ₹.21,05,200/- was deposited during demonetization period between 09.11.2016 to 30.12.2016. Out of the above deposits, the Assessing Officer also noted the assessee had deposited other than ₹.1000/- & ₹.500/- Notes during demonetization period of ₹.9,76,700/- and thus, the deposits made by the assessee in old SBN notes is ₹.11,28,500/-. On verification of the ledger account of the assessee in the books of Hatsun
:-3-: ITA. No: 306/Chny/2025 Agro Product Limited, the Assessing Officer observed that the transactions of the assessee with Hatsun Agro Product Ltd. was ₹.1,73,04,906/-, which is higher than the transaction reflected from the bank statement of the assessee. Against the show-cause notice, the assessee filed e-submission and the explanation offered by the assessee is reproduced at para 9 of the assessment order. After considering the submissions of the assessee, the Assessing Officer made the additions of ₹.11,28,500/- being the cash deposits made in SBNs during the demonetization period under section 69 of the Act and ₹.10,12,224/- being 8% of total turnover at ₹.1,73,04,906/- as income from business after considering the sum offered to tax at ₹.3,72,150/- and completed the assessment order under section 143(3) of the Act dated 07.12.2019. On appeal, the ld. CIT(A) dismissed the appeal of the assessee for want of prosecution since the assessee could not respond to various hearing notices issued by the ld. CIT(A). On being aggrieved, the assessee carried the matter in appeal before the Tribunal.
The ld. AR Shri N. Arjun Raj, Advocate, submits that the assessee is a small milk vendor of distributing Hatsun Agro Products in Triplicane area and fully cooperated with the department by furnishing all details for the purpose of assessment. He submits that non-response to the hearing notices is neither willful nor wanton, but, due to circumstances
:-4-: ITA. No: 306/Chny/2025 beyond his control, the assessee could not respond to the hearing notices issued by the ld. CIT(A) and prayed that the assessee may be afforded one more opportunity of being heard to the assessee to substantiate his case before the ld. CIT(A).
The ld. DR Shri A. Sasi Kumar, CIT opposed the same and drew our attention to para 3 at page 3 of the impugned order and argues that the ld. CIT(A) has given ample of opportunities to the assessee, but, it was not availed.
Having heard both the parties and on perusal of the assessment order, we note that the assessee has furnished complete details before the Assessing Officer for assessment. However, on perusal of the impugned order, we note that the assessee could not respond to any of the hearing notices issued by ld. CIT(A), thereby, the ld. CIT(A) completed the impugned order exparte of the assessee. Considering the facts and circumstances of the case and submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to decide the issue afresh by affording one more opportunity of being heard to the assessee after considering the written submissions/ documentary evidence as may be filed by the assessee to substantiate his claim. Thus, the grounds raised by the assessee are allowed for statistical purposes.
:-5-: ITA. No: 306/Chny/2025
In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the court on 17th April, 2025 at Chennai.