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Facts
The assessee filed an appeal against the order of the NFAC which dismissed additional evidence without providing a hearing. The original assessment treated a cash deposit of Rs. 11,50,000/- during demonetization as unexplained.
Held
The Tribunal held that the NFAC erred in dismissing the additional evidence without a proper hearing and that the submitted documents (statements of affairs) required examination on merits. The appeal was restored to the NFAC for denovo adjudication.
Key Issues
Whether the NFAC violated principles of natural justice by not providing a hearing and dismissing additional evidence without proper examination.
Sections Cited
143(3), 46A
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
O R D E R
The appeal in AY 2017-18, arises out of the order of the ld. National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024- 25/1070110999(1) dated 05.11.2024 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 dated 22.11.2019 (hereinafter referred to as ‘the Act’) by ITO, Ward-29(4), Delhi (hereinafter referred to as ‘ld. AO’).
The only issue raised by the assessee is challenging the action of the ld NFAC in not providing opportunity of hearing to the assessee thereby violating the principles of natural justice.
None appeared on behalf of the assessee despite issuance of notice. Hence, I proceed to dispose of this appeal after hearing the ld DR and based on material available on record.
The assessee had filed the income tax return for AY 2017-18 on 16.11.2017 declaring total income of Rs. 2,34,460/-. The case of the assessee was selected for limited scrutiny to examine certain cash deposits made during the demonetization period in the sum of Rs. 11,50,000/- in HDFC Bank. Ultimately, the assessment stood completed u/s 143(3) of the Act on 28.11.2019 wherein, the cash deposit of Rs. 11,50,000/- was treated as unexplained money by the ld AO. The assessee preferred an appeal before the ld CIT(A) and furnished all the details by way of additional evidences in terms of Rule 46A of the Income Tax Rules, 1962. The ld NFAC dismissed those evidences by stating that no new evidences were filed by the assessee. The assessee had always pleaded that the cash was deposited during the demonetization period out of past savings available, in support of which the assessee had furnished the statement of affairs as on 31.03.2016 and 31.03.2017. In my considered opinion, these documents are required to be examined on merits by the ld NFAC. Hence, in the interest of justice and fairplay, I deem it fit and appropriate to restore this appeal to the file of NFAC for denovo adjudication in accordance with law. Accordingly, grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21/03/2025.