What did the Tribunal hold?

The Tribunal found that the CIT(A) did not examine the factual matrix of the case and confirmed the assessment order without providing the assessee an opportunity to explain the cash deposit. Therefore, the order of CIT(A) was set aside.

The assessee's appeal arose from an ex-parte assessment order under Section 144 of the Income Tax Act, 1961. The CIT(A) confirmed an addition of Rs. 60,42,400/- for demonetized cash deposited in the assessee's bank account without examining the facts.

What were the issues?

Whether the CIT(A) properly adjudicated the addition of demonetized cash without examining the facts and providing the assessee an opportunity to be heard.

Kailasam Pillai Saravanan, Trichy vs ITO | ITAT Chennai 2022

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MAHAVIR SINGHAND DR. DIPAK P. RIPOTE

Hearing: 23.08.2022Pronounced: 26.08.2022

आदेश / O R D E R

Per Mahavir Singh, Vice President :

This appeal by the assessee is arising out of the order of Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi, in Appeal No.CIT(A), Tiruchirapalli-1/10020/2020-21 dated 29.03.2022. The Assessment was framed by Income Tax Officer, Ward-1(1), Trichy for the relevant Assessment Year 2017-18 u/s. 144 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

We have heard Ld. Sr. D.R and gone through the facts of this case, we also noted that the assessee made request for adjournment, which was rejected by the Bench after going through the case records.

We have gone through the order of CIT(A) and noted that the CIT(A)’s adjudication on the issue of addition of demonetized cash deposited in assessee’s bank account i.e., Indian Bank, Meiakkalanaickenpatti was not at all examined and decided except discussion of some case laws of legal aspect. The CIT(A) has not at all discussed the fact and simpliciter confirmed the assessment order vide Para 9.3, which reads as under:

“9.3 Considering the above factual matrix of the case despite being given ample opportunities during assessment and appellate proceedings, failed to offer any, explanation about the nature and source of the cash deposit amounting to Rs. 60,42,400/- in bank account. Accordingly, the addition of Rs. 60,42,400/- is confirmed. Hence, this ground of appeal is dismissed.”

3. When these facts are confronted to Ld. Sr. D.R, he could not controvert the above factual situation, but, he relied on the assessment order and the order of the CIT(A).

4. We have gone through the assessment order and noted that the assessment order is exparte order u/s. 144 of the Act and it means that the assessee was never allowed opportunity to provide the evidences or prove his case for cash deposit amounting to Rs. 60,42,400/-. In term of the above, in the interest of natural justice to afford the assessee a reasonable opportunity, we set aside the order of CIT(A) and remand the matter back to the file of CIT(A) for fresh adjudication.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 26th August, 2022.

KAILASAM PILLAI SARAVANAN,TRICHY vs. ITO WARD-1(1), TRICHY

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