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Facts
The Assessing Officer received information about cash deposits totaling Rs. 13,14,000/- made by the assessee during demonetization, which the assessee failed to explain despite notices. The AO treated these as unexplained cash deposits and taxed them, and the CIT(A) upheld the AO's order due to the assessee's non-compliance, without examining the case merits.
Held
The Tribunal condoned the delay in filing the appeal and held that the CIT(A) erred by dismissing the appeal without considering the merits and providing a reasonable opportunity of hearing, contrary to Section 250(6). Consequently, the matter was remanded back to the CIT(A) for fresh adjudication after allowing the assessee an opportunity to present its case.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without examining the merits or providing a fair hearing, given the assessee's non-compliance regarding unexplained cash deposits during demonetization.
Sections Cited
250, 142(1), 133(6), 69A, 115BBE, 271AAC, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2017-18 Paschim Nawpara Samabay Krishi Unnayan Samity Limited...….……….Appellant Nawpara, Noapara B.O. Paschim Noapara, Nadia, 741255, W.B. [PAN: AADAP3765F] vs. ITO, Ward-41(3), Nadia…………….....................……........……...…..…..Respondent Appearances by: Shri P. K. Ray, R.C. Halder & Trideep Nayak, Advocates, appeared on behalf of the assessee. Shri Archana Gupta, Addl. CIT, Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : May 14, 2025 Date of pronouncing the order : May 15, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against an order dated 24.01.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
At the outset, it is noted that there is a delay of 282 days in filing the instant appeal before the Tribunal. The assessee has submitted an application for condonation of such delay explaining reasons for the delay. We, after perusing the petition made in the application, satisfy that there are bona fide and sufficient reasons for such delay. We, therefore, condone the delay and admit this appeal for adjudication.
Brief facts of the case are that the Assessing Officer received information regarding cash deposits made by the assessee during the period of demonetization i.e. from 09.11.2016 to 31.12.2016 amounting to Rs.2,46,000/- and Rs.8,48,500/- maintained with Nadia District Central Co-op Bank Ltd., Ranaghat Branch, Nadia and Rs.2,19,500/- Assessment Year: 2017-18 Paschim Nawpara Samabay Krishi Unnayan Samity Limited maintained with Allahabad Bank, Nawpara Branch, Nadia totalling to Rs.13,14,000/-. The Assessing Officer issued notice u/s 142(1) of the Act calling upon the assessee to file a return of income and to explain the source of the cash deposits. However, no compliance was made by the assessee. The Assessing Officer thereafter issued notice u/s 133(6) of the Act to the concerned banks in order to verify the bank statements which showed that cash deposits of Rs.1,69,01,335/- were made during the whole financial year 2016-17. Since there was no reply on the part of the assessee to the notices issued and failed to provide any explanation to the Assessing Officer regarding the cash deposits in that period, accordingly, the Assessing Officer treated Rs.13,14,000/- as unexplained cash deposits u/s 69A and taxed it u/s 115BBE of the Act and also penalty proceedings u/s 271AAC of the Act were initiated.
3. Dissatisfied, the assessee filed appeal before the ld. CIT(A) however due to non-compliance before the ld. CIT(A), the ld. CIT(A) simply upheld the order of the Assessing Officer by dismissing the appeal of the assessee without examining the merits of the case.
Aggrieved by the above order, the assessee is in appeal before this Tribunal. However, at the time of hearing, the ld. AR submitted that the ld. CIT(A) has passed the impugned order without appreciating the facts or without granting any opportunity of hearing. The ld. AR, therefore, prayed before the Bench that the matter may be remanded back the issue to the file of the ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee to present its case.
On the other hand, the ld. DR strongly opposed to such prayer made by the assessee stating that the assessee is a habitual defaulter and failed to cooperate at any stage of assessment or appellate proceedings, therefore, this appeal may be dismissed in limine.
Assessment Year: 2017-18 Paschim Nawpara Samabay Krishi Unnayan Samity Limited 5. We, after hearing the rival submissions and carefully perusing the materials available on record, find that the assessee could not properly represent its case before the ld. CIT(A). We also find that the ld. CIT(A) dismissed the appeal by simply relying on the order of the Assessing Officer without going into the merits of the case, which is essential condition stipulated u/s 250(6) of the Act. We, therefore, considering the facts of the case and in the interest of justice and fair play, remand back the issue to the file of the ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee to present its case and to pass a speaking order. We also direct the assessee to strictly comply with the notices issued by the ld. CIT(A) without any fail and furnish all relevant documents to substantiate its claim.
In terms of the above, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 15th May, 2025.