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Facts
The assessee, S.M. Steel, did not file its income tax return for AY 2017-18 and failed to comply with notices. The Assessing Officer added cash deposits of ₹.1,03,88,000/- and interest income of ₹.7,704/- as unexplained money under Section 69A of the Act.
Held
The Tribunal, in the interest of justice, decided to remand the matter back to the CIT(A) to allow the assessee an opportunity to present its case, subject to a cost of ₹.5,000/-. The CIT(A) is to decide the issue afresh after considering the submissions and evidence.
Key Issues
Whether the CIT(A) order confirming additions for unexplained cash credits and interest income is sustainable when the assessee was not afforded a proper opportunity to present its case due to circumstances beyond control.
Sections Cited
148, 142(1), 133(6), 69A
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 25.09.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18.
At the outset, we note that the Assessing Officer received information that the assessee made cash deposit in current account with a banking company to the tune of ₹.1,03,88,000/- and as per the TDS return the assessee received other interest of ₹.7,704/-. The assessee did not file return of income for the F.Y. 2016-17 relevant to the assessment year 2017-18. In response to the notice under section 148 of the Income Tax Act, 1961 [“Act” in short] dated 23.03.2021, the assessee has not filed its ITR for AY 2017-18. The Jurisdictional Assessing Officer issued questionnaire along with notice under section 142(1) of the Act, which was also not complied with. As per details collected from Lakshmi Vilas Bank under section 133(6) of the Act, the Assessing Officer noted that the assessee has credited ₹.1,03,88,000/- by way of cash during the year under consideration which remained unexplained cash credit in the hands of the assessee firm. Since the assessee did not furnish any evidence to substantiate the source of such cash deposit as well as interest income earned of ₹.7,704/-, the Assessing Officer treated the same as unexplained money under section 69A of the Act and added to the total income of the assessee. On appeal, the ld. CIT(A) confirmed the additions made by the Assessing Officer since there was no response to notices issued by the ld. CIT(A).
The ld. AR Shri N. Arjun Raj, Advocate submits that non appearance of the assessee before the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond its control. He also submits that the notices sent through email were completely missed out as the employees of the firm were not conversant with the e-proceedings and electronic devises. He also submits that the assessee firm was closed and not functioning during the Covid pandemic period and prayed that one more opportunity may be afforded to the assessee to pursue its case before the authorities below.
The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 5.7 of the impugned order and argues that the ld. CIT(A) has given ample of opportunities to the assessee, but, it was not availed. She vehemently argued that the costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the ld. CIT(A).
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) 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 evidence as may be filed by the assessee to substantiate its claim. Thus, the grounds raised by the assessee are allowed for statistical purposes.