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Facts
The assessee's case for AY 2017-18 was selected for scrutiny due to significant cash deposits (Rs. 22.26 lakhs) during demonetization. Despite multiple notices under Sections 143(2) and 142(1), the assessee failed to comply or furnish details. Consequently, the Assessing Officer added the unexplained cash to income, and the CIT(Appeals) dismissed the assessee's appeal for non-compliance.
Held
The ITAT set aside the CIT(Appeals) order, remitting the matter back to the CIT(Appeals) to provide the assessee one more opportunity of being heard, in adherence to the principles of natural justice. The assessee was cautioned to cooperate with the proceedings.
Key Issues
Whether the CIT(Appeals) was justified in dismissing the appeal due to non-compliance, and if the principles of natural justice require providing further opportunity to the assessee to substantiate cash deposits made during demonetization.
Sections Cited
143(1), 143(2), 142(1), 271A(1)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2017-2018 Sweta Agarwal,……………..…………...…………Appellant Room No. 8, 7, Raj Mohan Street, Kolkata-700073, West Bengal [PAN:AIYPA9816E] -Vs.- Income Tax Officer,………………….…………...Respondent Ward-1(4), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Tarak Nath Jaiswal, A.R. and Shri Ashay Singiska, A.R., appeared on behalf of the assessee Shri Kallol Mistry, JCIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: April 23, 2025 Date of pronouncing the order: April 25, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 9th August 2024 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Sweta Agarwal 2. Brief facts of the case are that the assessee filed her return of income electronically declaring total income of Rs.2,89,510/- for the assessment year 2017-18. The case was duly processed under section 143(1) and thereafter selected for scrutiny through CASS with the reasoning that large value of cash deposited during the demonetization period. Accordingly, system generated notice under section 143(2) of the Act dated 09.08.2018 was issued to the assessee. Further notice under section 142(1) dated 29.1.2019 was issued online to the assesese requiring it to furnish certain details/documents relating to this case. However, no compliance was made by the assessee. Penalty proceedings under section 271A(1)(d) of the Act was initiated due to failure on the part of the assessee to comply with the notices issued under sections 143(2) and 142(1) of the Act. During the course of scrutiny proceedings, in order to verify the nature and source of cash deposit of Rs.22,26,000/- in the Bank accounts of the assessee during demonetization period i.e. 08.11.2016 to 31.12.2016, notice under section 142(1) dated 29.01.2019 along with questionnaire were issued to the assessee. But the assessee did not make any compliance. The ld. Assessing Officer treated this amount as unexplained and added to the income of the assessee. Finally, ld. Assessing Officer assessed total income of the assessee at Rs.25,15,510/-.
Being not satisfied, the assessee preferred an appeal before the ld. CIT(Appeals).
(A.Y. 2017-2018) Sweta Agarwal 4. The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate his claim, but the appellant neither filed the written submission nor represented the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal on 9th August, 2024.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, ld. Counsel for the assessee argued before the Bench that the impugned order be set aside and remitted back to the file of ld. CIT(Appeals) for deciding it afresh.
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.25,15,510/-. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the order passed by the CIT(Appeals).
I have heard both the sides and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld.