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Facts
The assessee, Ms. Rekha Singh, did not file an income tax return for AY 2017-18. The AO found substantial cash deposits in her bank account during the demonetisation period and initiated assessment proceedings. The assessee failed to provide explanations, leading to an addition of Rs. 70,65,963/- as unexplained income.
Held
The Tribunal found that the Ld. CIT(A) order was not in accordance with Section 250(6) of the Act as it lacked proper reasoning. The Tribunal set aside the CIT(A)'s order and remitted the issue back to the AO to decide afresh after providing the assessee with a reasonable opportunity of being heard.
Key Issues
Whether the Ld. CIT(A) correctly dismissed the appeal without providing adequate opportunity and deciding on merits, and if the case should be remanded for fresh adjudication to the AO.
Sections Cited
144, 69A, 250(6)
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Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI K. NARASIMHA CHARY & SHRI MADHUSUDAN SAWDIA
(निर्धारण वर्ा/Assessment Year:2017-18) Ms. Rekha Singh, Income Tax Officer, Vs. Ward-7(1), Hyderabad. Hyderabad. PAN:AUCPS2767E (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Artham Rajesh, C.A. रधजस्व द्वधरध/Revenue by:: Shri Srinath Sadanala, SR-DR सुिवधई की तधरीख/Date of 28/01/2025 hearing: 03/02/2025 घोर्णध की तधरीख/Pronouncement: आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M: This appeal is filed by Ms. Rekha Singh (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 11.07.2024 for the A.Y. 2017-18.
The brief facts of the case are that the assessee had not filed any income tax return for the A.Y. 2017-18. However, on the basis of data analytics and information gathered during the phase of online verification under ‘Operation Clean Money’, the income tax department gathered a list of assessees who had deposited substantial cash in bank account during the demonetisation period (09.11.2016 to 30.12.2016), but not filed income tax return for A.Y. 2017-18. From the data, the Learned Assessing Officer (“Ld. AO”) found that the assessee has deposited cash of Rs.15,03,000/- in her bank account during the demonetisation period. Accordingly, the Ld. AO issued notice to the assessee for getting explanation qua cash deposit of Rs.15,03,000/- in bank account during demonetisation period. However, no response was submitted by the assessee. The Ld. AO, further found that, the total cash deposited in the bank by the assessee during the A.Y. 2017-18 was Rs.70,65,963/-. Accordingly, the Ld. AO again called for the explanation from the assessee qua cash deposit of Rs.70,65,963/- in her bank account. However, the assessee did not respond to the various notices issued by the Ld. AO. Consequently, the Ld. AO completed the assessment u/s.144 of the Income Tax Act, 1961 (“the Act”) on 05.12.2019 treating the cash deposit of Rs.70,65,963/- from unexplained sources and assessed the total income of the assessee at Rs.70,65,963/-.
Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee as per his observation at para nos.3.1 to 4 of his order, which is reproduced as under : “ 3.1 Ground No.4 is related to the addition of the cash deposit of Rs.70,65,963/-, being cash deposited in the bank accounts of the appellant, during the demonetisation period as unexplained money under section 69A.
Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that, the Ld. CIT(A) has passed the order without providing adequate opportunity to the assessee. He also submitted that the Ld. CIT(A) has not decided the appeal on merits. Therefore, the Ld. AR requested before the bench for providing one more opportunity to the assessee so that the assessee's case can be decided on merits.
Per contra, the Learned Department Representative (“Ld. DR”) relied on the order of Ld. CIT(A) and objected to provide one more opportunity keeping in view of sufficient opportunity had been provided to the assessee. The Ld. DR prayed before the bench to dismiss the appeal of the assessee.
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the findings of Ld. CIT(A) as reproduced herein above, wherein we found that, the Ld. CIT(A) has arrived at his conclusion neither stating the points of his determination nor stating the reasons for his findings. Accordingly, we are of the opinion that, the order of the Ld. CIT(A) is not in accordance with the mandate of section 250(6) of the Act. Therefore, we set aside the order of Ld. CIT(A). We also found that the case of the assessee could not be prosecuted on merits before the Ld. AO also. Therefore, considering the principle of natural justice, we deem it appropriate to set aside the issue to the file of Ld. AO to decide afresh after providing a reasonable opportunity of being heard to the assessee. The assessee is also directed to co-operate in the assessment proceedings and file all the relevant documents within the time. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 3rd Feb., 2025.