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Facts
The assessee filed an appeal with a 266-day delay, which was condoned by the Tribunal. Both the assessment order by the AO and the appellate order by the CIT(A) were passed ex-parte. The AO added ₹92.57 lakhs as unexplained cash credit under Section 68 for demonetized cash deposits, without considering the opening cash balance for AY 2016-17 which had been accepted under Section 143(1).
Held
The Tribunal observed that the assessment and appellate orders were passed ex-parte and the AO failed to consider the opening cash balance for AY 2016-17. Therefore, the Tribunal restored the matter to the file of the AO for a de novo examination, directing the AO to consider the opening cash in hand and provide the assessee a reasonable opportunity of hearing.
Key Issues
Whether the ex-parte assessment and appeal orders were valid when the AO failed to consider the opening cash balance of the assessee, accepted under Section 143(1), while making an addition under Section 68 for demonetized cash deposits.
Sections Cited
68, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 22.09.2023 for the AY 2017-18.
We observe from the record file that there is a delay of 266 days in filing the appeal by the assessee for condonation petition is filed. It was stated in the petition that the appellate order was sent on the e-mail of the person concerned however the person concerned did not access the same and it was only became know to the assessee while finalizing the accounts of the assessee when the assessee accessed the IT website for reconciliation of Form 26 AS/AIS with the books of accounts. Thereafter the steps were immediately taken to file the appeal and was finally filed with a delay of 266
At the outset, the ld. Counsel for the assessee submitted that the assessment as well as the appellate order was passed by the ld. CIT (A) ex-parte, without considering the merits of the case. The ld. AR submitted that the addition was made by the ld. AO on account of unexplained money of ₹92,57,000/-, which was stated to be deposited during demonetization period and added by the ld. AO as unexplained cash credit u/s 68 of the Act. The ld. AR also submitted that the cash balance disclosed in its balance sheet in the return of income filed for A.Y. 2016-17 which was duly accepted by the AO u/s 143(1) of the Act was even not taking inot account by the AO. The ld. AR submitted that the issue is required to be verified and examined at the level of the AO and the same may be restored to the file of the ld. AO with a direction to the ld. AO that the cash available as opening balance on the basis of return of income filed for A.Y. 2016-17, may be allowed to deducted from the total cash available during the year and also an opportunity may be allowed to the assesse to explain the same.
The ld. DR on the other hand fairly agreed that the issue is required to be examined at the end of the ld. AO as the proceedings were ex-parte before the authorities below.
After hearing the rival contentions and perusing the materials available on record, we find that the appeal has been decided ex- parte by CIT (A). similarly by ld. AO has framed the ex-parte assessment even without taking into account the opening cash in
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 25.03.2025.