ARUMUGAM DHANDAPANI,TIRUVANNAMALAI vs. ITO, WARD-1,, TIRUVANNAMALAI

This appeal filed by the assessee is directed against the order dated 08.11.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2017-18.

The assessee raised 6 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 made by the Assessing Officer on account of treating cash deposits during demonetization period as 2 unexplained and unaccounted income under section 69A of the Income Tax Act, 1961 [“Act” in short].

The ld. AR Shri Anandd Babunath, CA drew our attention to page 11 of the impugned order, wherein, the screenshot of abstract of Form 26AS affixed, clearly indicates that the assessee is in the business of reselling the recharge coupons for telecom companies. He further submits that though the assessee filed return of income against notice under section 142(1) of the Act, it is a valid return and moreover, the assessee has already filed audit report under section 44AD of the Act. He vehemently contended that without verifying the details already available with the Assessing Officer, completing the assessment under section 144 of the Act is bad in law. He also contended that the Assessing Officer failed to obtain bank statement to ascertain the quantum of deposits made during demonetization period and prayed to set aside the impugned order.

The ld. DR Shri N. Madan Kumar, JCIT, besides relying upon the orders of authorities below, fairly conceded that the matter may be remanded to the file of the Assessing Officer for fresh consideration.

Having heard both the parties and on perusal of the assessment order, we noted that the assessee made cash deposits during demonetization period and not filed the return of income for AY 2017-18. However, against notice under section 142(1) of the Act, the assessee filed his return of income on 14.09.2019 along with audit report under section 44AD of the Act, which was not objected by the Assessing Officer. We find that when the Assessing Officer noted that the assessee made cash deposits, the Assessing Officer should have obtained bank statement under section 133(6) of the Act, which was not done so in this case. We also noted that the Assessing Officer did not verify Form 26AS which is available in the ITBA of the assessee. Under the above facts and circumstances, we set aside the order of the ld. CIT(A) and remand the matter to the file of the Assessing Officer to decide the matter afresh and pass order in accordance with law after considering the explanation with documentary evidences, if any, as may be filed by the assessee. Thus, the grounds raised by the assessee are allowed for statistical purposes.