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Facts
The assessee, an individual operating M/s. Hyderabad Service Station, e-filed a return for AY 2017-2018. The Assessing Officer found unexplained cash deposits of Rs.1,18,10,230/- in bank accounts and made an addition under Section 69A. The CIT(A) dismissed the assessee's appeal ex-parte for non-compliance, upholding the AO's addition.
Held
The Tribunal set aside the CIT(A)'s ex-parte order, observing that the CIT(A) did not consider the merits or evidence claimed to be filed by the assessee. The matter is remanded back to the CIT(A) to re-consider the issue after providing a reasonable opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering the merits and alleged evidence, and if the assessee should be granted another opportunity to explain cash deposits.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
1 ITA.No.331/Hyd./2025 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.331/Hyd./2025 Assessment Year 2017-2018 Late Mohammad Afzaluddin Quraishi, The Income Tax Officer, reptd. By Legal Ward-8(2), Representative [LR] vs. HYDERABAD. Mohammad Masihuddin Telangana. QU, HYDERABAD. PIN – 500 084. PIN – 500 008 PAN ADKPM7137P (Appellant) (Respondent) For Assessee : Shri T. Chaitanya Kumar, Advocate For Revenue : Shri Gurpreet Singh, Sr. AR Date of Hearing : 21.07.2025 Date of Pronouncement : 25.07.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the assessee against the order dated 18.09.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.
2 ITA.No.331/Hyd./2025 2. Brief facts of the case are that, the assessee is an individual, deriving income from the business in the name of M/s. Hyderabad Service Station, e-filed his return of income for the assessment year 2017-2018 on 07.11.2017, declaring total income of Rs.6,30,310/-. The case of the assessee has been selected for Complete Scrutiny under "CASS" to verify the cash deposits during the year under consideration. During the course of assessment proceedings, the Assessing Officer noticed that, the assessee has total cash deposit of Rs.1,18,10,230/- into three bank accounts held with Vijaya Bank [i.e., two accounts] and HDFC Bank. The Assessing Officer called-upon the assessee to file relevant evidences. Since, the assessee has not furnished any evidence to substantiate the source for cash deposit, the Assessing Officer treated total cash deposit into three bank accounts amounting to Rs.1,18,10,230/- as unexplained and made addition u/sec.69A of the Income Tax Act, 1961 [in short “the Act”].
On being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A).
3 ITA.No.331/Hyd./2025 Before the learned CIT(A), the assessee submitted that, he is engaged in the business of retail dealer of petrol pump under the name and style of “M/s. Hyderabad Service Station” and the source for cash deposit is out of his sales for the relevant period. During the appellate proceedings, the learned CIT(A) issued notice on various occasions and called-upon the assessee to file relevant evidences in support of it’s case. Since, there was no compliance from the assessee, the learned CIT(A) passed ex-parte appellate order and dismissed the appeal of the assessee for non- prosecution and upheld the additions made by the Assessing Officer towards cash deposits u/sec.69A of the Income Tax Act, 1961.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
Shri T. Chaitanya Kumar, Advocate-Learned Counsel for the Assessee referring to screen-shot downloaded from ITBA portal submitted that, the assessee has filed all details including relevant bank account statements and cash book to explain source for cash deposit 4 ITA.No.331/Hyd./2025 and also filed various details before the Assessing Officer on three occasions. The Assessing Officer without considering the relevant details filed by the assessee, made addition towards cash deposit by observing that, the assessee has not filed any details. Further, no doubt, the assessee has not responded to notices issued by the learned CIT(A), however, the assessee has explained the source for cash deposit by filing relevant details before the learned CIT(A). The learned CIT(A) also without considering the relevant details, has simply sustained the addition made by the Assessing Officer. Therefore, he submitted that, the matter may be remitted back to the file of Assessing Officer to give another opportunity of hearing to the assessee to explain it’s case.
Shri Gurpreet Singh, learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the assessee could not satisfactorily explain as to why he has not submitted any details before the authorities. Further, although, the assessee claims to have filed various details, but, going by 5 ITA.No.331/Hyd./2025 the paper book filed by the assessee, it is impossible to upload so much data as claimed by the assessee. Since the assessee claims to have filed various details and the Assessing Officer has not considered relevant details filed by the assessee, the matter may be remitted back to the file of learned CIT(A) to give one more opportunity of hearing to the assessee to explain it’s case.
We have heard both the parties, perused the material on record and the orders of the authorities below. The Assessing Officer made addition towards cash deposit of Rs.1,18,10,230/- on the ground that, assessee has not furnished any details in support of it’s explanation for source of cash deposit into bank account. It was the argument of the Counsel for the Assessee in light of screen- shot taken from ITBA portal that, the appellant has filed various details including extract of cash book, in response to notice issued by the Assessing Officer on 14.11.2019, 28.11.2019 and 12.12.2019. The assessee has filed paper book and claimed that, all these evidences has been placed before the Assessing Officer during the course of 6 ITA.No.331/Hyd./2025 assessment proceedings, but, the Assessing Officer has not considered any of the documents while making the additions towards cash deposits. Before the learned CIT(A), the assessee could not file any details, which is evident from the ex-parte appellate order passed by the learned CIT(A). However, the learned CIT(A) not considering any of the details filed by the assessee and also has not considered the facts brought on record by the Assessing Officer while deciding the issue. Since the learned CIT(A) has dismissed the appeal filed by the assessee for non-prosecution and not considered the issue on merits in light of relevant evidences brought on record by the Assessing Officer, in our considered view, one more opportunity of hearing needs to be given to the assessee to substantiate his case. Therefore, we set-aside the order of the learned CIT(A) and restore the issue back to the file of First Appellate Authority and the learned CIT(A) is directed to re-consider the issue, after providing reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall file relevant 7 ITA.No.331/Hyd./2025 details in support of his case as and when the case is posted for hearing.
In the result, appeal of the Assessee is allowed for statistical purposes.