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Facts
The assessee, an individual, failed to file income tax returns for assessment years 2016-17 and 2017-18. Despite notices, the assessee did not respond. The Assessing Officer estimated income based on contract receipts and cash deposits as unexplained income under Section 69A of the Income Tax Act.
Held
The Tribunal noted the assessee's failure to furnish explanations and respond to notices. Considering the facts and interest of justice, the matter was remanded to the CIT(A) for fresh consideration, subject to a payment of ₹5,000/- towards the State Legal Aid Authority.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte by confirming additions for unexplained cash deposits and contract receipts, and whether the matter should be remanded for fresh consideration.
Sections Cited
69A, 147, 144, 144B
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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate orders dated 19.11.2024 and 05.11.2024passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment years 2016-17 and 2017-18 respectively.
Since issues raised in both the appeals are similar based on the same identical facts, with the consent of the both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience.
The only effective ground raised by the assessee is as to whether the ld. CIT(A) justified in dismissing the appeal exparte the assessee by confirming the addition made by the Assessing Officer under section 69A of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
We note that the assessee is an individual and did not file his return of income for assessment year under consideration. As per the AIMS records, the Assessing Officer noted that the assessee had contract receipt of ₹.3,87,26,759/- and also made cash deposits in savings account of ₹.17,92,100/-. The Assessing Officer issued statutory notices requiring the assessee to file the return of income and details, but, however, there was no response from the assessee even against the show-cause notice issued by the Assessing Officer. After analysing 26AS, in the absence of any compliance by the assessee against various notices issued and the assessee has not offered the income for taxation, the Assessing Officer estimated 10% of the contract receipts from the Divisional Engineer Highways of ₹.19,27,559/- and added ₹.1,92,756/- to the total income of the assessee under the head “income from business or profession”. Further, the Assessing Officer noted that the assessee had deposited cash of ₹.17,92,000/- into HDFC Bank. Since, the assessee has failed to furnish any explanation regarding the source of such money, the Assessing Officer treated the same as unexplained cash deposits under section 69A of the Act and added to the total income of the assessee. On appeal, the ld. CIT(A) confirmed the addition since the assessee could not furnish any details in response to the notices issued by the ld. CIT(A).
The ld. AR Shri R. Thulasi Ram, Advocate that non appearance of the assessee before the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond his control. He further submits that the authorised representative did not properly represented assessee’s case before the ld. CIT(A). The ld. AR further submits that the assessee has details of source of money for ₹.17,92,000/-, but, however, not filed before the Assessing Officer and the ld. CIT(A) and prayed to remand the matter to the file of the ld. CIT(A) to consider the documents and decide the issue on merits.
The ld. DR Shri A. Sasikumar, CIT opposed the same and drew our attention to para 3.3 in page 2 and para 7 in page 6 of the assessment order as well as para 4 of the impugned order and argues that the Assessing Officer and ld. CIT(A) afforded ample opportunities to the assessee, but, it was not availed. He vehemently argued that costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the CIT(A).
Heard both the parties and perused the material on record. We note that the assessment was completed under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 28.03.2022. On perusal of the assessment order as well as impugned order, we note that there was no assistance from the assessee to the statutory notices and show-cause notice issued by the Assessing Officer as well as hearing notices issued by the ld. CIT(A). We also note that the Assessing Officer issued the show-cause notice issued and served on 15.03.2022 proposing additions to assessee’s total income for AY 2016-17, but, the assessee has not furnished any reply with regard to the proposed addition towards unexplained cash deposits. Taking into consideration of the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) subject to the condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the ld. CIT(A) shall satisfy the payment of cost and decide the issue afresh after considering the written submissions/ documentary evidences as may be filed by the assessee to substantiate his claim. Thus, the grounds raised by the assessee are allowed for statistical purposes.
AY 2017-18 9. Similar issues on identical facts have been raised by the assessee in his appeal for AY 2016-17 and we have remitted the matter to the file of the ld. CIT(A) with a condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and decide the issue afresh herein above. Similarly, for the assessment year 2017-18 also on similar condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order, the matter is remitted to the file of the ld. CIT(A) for fresh consideration on similar footings.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 05th March, 2025 at Chennai.