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Facts
For AY 2017-18, the assessee's return declared Rs. 7,83,960. The AO completed assessment at Rs. 25,83,490 by adding Rs. 17,99,534 as unexplained cash credit. The CIT(A) dismissed the appeal for non-appearance.
Held
The Tribunal held that the order of the CIT(A) was an ex parte order and not a speaking order. The Tribunal restored the issue to the CIT(A) for fresh consideration after providing an opportunity of hearing to the assessee.
Key Issues
Whether the CIT(A) order was a speaking order, and if the addition under Section 69A was justified, and if the higher tax rate under Section 115BBE was applicable.
Sections Cited
143(3), 69A, 68, 115BBE, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
O R D E R
PER Ms. MADHUMITA ROY, JM:
The instant appeal, filed by the assessee, is directed against the order dated 10.07.2024 passed by the learned Commissioner of Income-tax (Appeals)/ National Faceless Appeal Centre (NFAC), Delhi, arising out of the order passed by the ITO, ward-17(4), New Delhi, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 24.12.2019 for assessment year 2017-18.
The assessee has raised following grounds of appeal for adjudication:
Mridula Healthcare P Ltd. A.Y. 2017-18 “1. That under the facts and circumstances and in view of the evidences and explanations filed during asstt. proceedings, there is no justification in assuming and in estimating cash deposit in bank during demonetization period to the extent of Rs. 17,99,534/- out of total cash deposit during demonetization period Rs.52,77,000/- (which includes Rs.47,34,500/- in SBN and Rs.5,42,500/- in new currency) as unexplained cash deposit U/s.69A.
2. That, since Sec.69A is not applicable on the issue of addition of Rs. 17,99,534/-, therefore the addition made vide Sec. 69A is liable to be deleted out rightly, more so, the addition made under wrong section cannot be sustained.
3. That under the facts and circumstances and in view of decision in the case of S.M.I.L.E Microfinance Ltd. Vs. ACIT W.P.(MD) No.2078/2020 Dtd.19.11.24 (Mad. HC), the higher rate of 60% tax U/s.115BBE is applicable only from A.Y.18-19, hence Ld. A.O. erred in charging higher rate of tax @60% in impugned A.Y.17-18 on addition of Rs.17,99,534/- U/s.69A, against correctly @30%. For Mridula Health Care Pvt. Ltd.”
As per office report there is delay of 95 days in filing of appeal before the ITAT. The assessee has filed application for condonation of delay, supported by affidavit of one Shri Manoj Kumar Singh, Director of the assessee company.
Considering the averments made in the affidavit, I am of the considered view that assessee has successfully explained the delay in filing of appeal before the ITAT.
Accordingly, delay in filing of appeal is condoned and the appeal is taken up for hearing on merits.
Facts, in brief are that for A.Y. 2017-18 the assessee filed its return of income on 30.10.2017 declaring income of Rs. 7,83,960/-. The case was selected for scrutiny under CASS. The AO completed the assessment at Rs. 25,83,490/- by credit u/s 69A of the Act, inter alia, by observing as under:
“In view of the above position as explained above it is concluded that the assessee has introduced its unexplained cash by way of manipulated sale in its books before the demonetization period. The assessee has average sale receipts Rs 1,12,64,834/- up to October months, however, it has shown total sale receipts amounting to Rs 13064368/- Out of which the difference amounting to Rs 17,99,534/-is manipulated sale which is not justified and the same was deposited out of total cash deposited Rs 47,34,500/-. Therefore, the difference amounting to Rs 17,99,534/- is unexplained cash deposits during the demonetization period. Hence, it is treated as unexplained income for the year and added to the total income of the assessee for the year. Since the assessee did not furnish any genuine explanation/evidence or Cogent documents/explanation or justification for excess sale in cash in comparison to last months and large cash in hand. I hold the assessee is in default u/s 68 of the I.T. Act, 1961 and the amount of Cash Deposits of Rs. 17,99,534/-treating the undisclosed/unexplained money of the assessee and added to the income of the assessee company. (Addition of Rs.17,99,534/-).”
Aggrieved against it the assessee preferred appeal before the Ld. CIT(A)/NFAC, Delhi, who by and under the impugned order dated 10.07.2024 dismissed the appeal for non appearance, inter alia, by observing as under:
“5.0 During the course of appellate proceedings, the appellant was granted enough opportunity to file submissions and documents through the web portal in support of its grounds of appeal
. However, till date there has been no response from the appellant. Therefore, it is apparent that the appellant has no submissions/documents to submit in support of its grounds Mridula Healthcare P Ltd. A.Y. 2017-18 of appeal. Accordingly, on the issue of non-appearance alone the appeal deserves to be dismissed.”
6. Aggrieved against the order of the Ld. CIT(A) the assessee is in appeal before this Tribunal.
7. Ld. counsel for the assessee at the outset submitted that the ex parte order passed by the Ld. First Appellate Authority is not a speaking order as contemplated u/s 250(6) of the Act and rather simply has affirmed the action of Ld. AO, confirming the addition of Rs. 17,99,534/- made by the AO treating the same as undisclosed/unexplained cash deposits. He prayed that the matter may be restored to the file of Ld. First Appellate Authority for decision afresh in accordance with law after affording an opportunity of being heard to the assessee.
Ld. DR relied on the orders of the authorities below.
I have heard the rival submissions made by the respective parties and perused the materials available on record. Considering the facts and circumstances of the present case this Bench deems it fit and proper to remit the issue to the file of the Ld. CIT(A) for consideration of the issue afresh by passing a reasoned order, upon granting an opportunity of being heard to the assessee and upon considering the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter. It is also made clear that in the event the liberty to pass orders strictly in accordance with law. Ordered accordingly.
In the result, assessee’s appeal is allowed for statistical purpose.
Order pronounced in open court on 17.-4.2025.