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Facts
The assessee filed an appeal against the order of the CIT(A) which upheld an addition of Rs. 74,29,500 made by the AO on account of cash deposits during demonetization. The assessee claimed the deposits were from debtors and cash withdrawals but did not provide sufficient details. The assessee also claimed that notices from the CIT(A) were not received due to an incorrect email address provided for communication.
Held
The Tribunal set aside the order of the CIT(A) and remanded the case for de novo adjudication. The Tribunal noted that the assessee was denied a proper opportunity of being heard due to non-receipt of notices, attributing it to an incorrect communication address. The delay in filing the appeal before the Tribunal was condoned subject to payment of Rs. 25,000 to the Legal Aid cell.
Key Issues
Whether the assessee was denied a proper opportunity of being heard due to non-receipt of notices, and if the addition on account of demonetized cash deposits is justified.
Sections Cited
250, 143(3), 251(1), 44AD, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee against the order of ld. Commissioner of Income Tax(Appeal)[NFAC], Delhi passed under section 250 of the Income Tax Act, 1961 dated 30.11.2023 for the A.Y.2017-18 emanating from the Assessment Order under section 143(3)of the Income Tax Act, 1961, dated 26.12.2019. The Assessee has raised the following grounds of appeal :
“1. The following grounds of appeal are taken independently and without prejudice to one another. The Ld. Commissioner of income Tax (Appeals) has eared in dismissing the grounds of appeal of the assessee challenging the addition of Rs.
74,29,500/- made by the Assessing Officer on account of cash deposited in the bank accounts during the demonetization period, by treating the same as unexplained money in the hands of the assessee.
The order of the Ld. Commissioner of Income Tax (Appeals) has been passed in violation of the principles of natural justice specifically enshrined in sub section (1) of sec 251 of the I.T. Act, requiring the Commissioner of Income Tax (Appeals) to give a notice of hearing to the assessee before passing the appellate order.
The notices of hearing issued in this case mentioned in para 3 of the order of the Commissioner of Income Tax (Appeals) have not reached the assessee. In the Form No. 35 for filing the appeal before the Commissioner of Income Tax (Appeals) the e-mail address "sunnyudyog555@gmail.com" was given. The said e-mail address belongs to M/s Sunny Udog, where assessee is a partner. M/s Sunny Udog did not inform the assessee of the notices of hearing received on the above e-mail address. As such the assessee did not get the proper opportunity of being heard before the Commissioner of Income Tax (Appeals). The appellant craves leave to add to or amend/modify or delete any or all of the above grounds of appeal.”
Submission of ld.AR :
2. The ld.AR for the Assessee filed a paper book along with petition for additional evidence. He explained that the Notices issued by CIT(A) were not received by the assessee hence Assessee could not file any reply. Ld.AR submitted that Assessee had filed list of bank accounts maintained by the assessee to explain the source of cash deposits however the AO has not bothered to study these accounts as these accounts were according to the AO provided at the fag end of time barring date. Thus the AO has failed to consider the important evidence filed by the assessee.
2.1 Ld.AR submitted that hence the Additional Evidence filed by the assessee may be admitted and the AO may be directed to verify it. Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of the AO and the CIT(A).
Findings &Analysis : 4. We have heard both the parties and perused the records. In this case, assessee filed his return of Income on 27/11/2017 declaring total income of Rs.30,43,023/- for AY 2017-18. The Return was selected for scrutiny accordingly the Assessing Officer Assistant Commissioner of Income Tax Circle -2 Pune (herein after referred as AO) issued various notices. It is observed by the Assistant Commissioner of Income Tax Circle -2 Pune that Assessee is in the business of Builder, Transporter, Manufacturing. Assessee had shown income in the Return of Income u/s 44AD of the Act. It was observed by the AO that during the year the Assessee has deposited in the bank account Rs.74,29,500/- in the form of Specified Bank Notes of 500 & 1000 which were demonetized. During the Assessment Proceedings the Assessee explained that he has received Rs.4,90,362/- from Debtors pertaining to earlier year. However, no details were filed. Assessee also submitted that Rs.43,00,000/- was the cash withdrawals from Bank/Partnership Firm. However, no specific details were provided during the Assessment Proceedings. The AO also noted that the assessee in the Return of Income had offered income under section 3 44AD of the Act which is presumptive taxation. AO also noted that no cash book was produced during the assessment proceedings. Hence after considering the submission of the Assessee, the Assistant Commissioner Income Tax- Circle 2 made an addition of Rs.74,29,500/- under section 69A of the Act to the Income of the Assessee.
Aggrieved by the Assessment Order the Assessee filed appeal before the Commissioner of Income Tax in Form No. 35 as per Rule 45 of the Income Tax Rules. Assessee has filed copy of the Form No.35 before this ITAT. It is observed that in the Form 35, the assessee has mentioned Email Address as sunnyudyog555@gamil.com . However, in the Form No. 35 in the column No.17, the address for communication mentioned is, vishalaheshwari10@gmail.com. Ld.CIT(A) has confirmed the addition stating that no evidence was filed.
Aggrieved by the Order of the CIT(A), the assessee filed appeal before this Tribunal.
It has been submitted by the Assessee in the Affidavit filed before this Tribunal that the email address mentioned in the Form 35 as address for communication was of the Accountant working in the office of the CA Mr.Lahoti. The Accountant Left the job, hence the notices sent by the CIT(A) were not communicated to the assessee. Ld.AR pleaded that the notices were not received by the Assessee hence he could not comply.
We have carefully studied the Affidavit filed by the assessee. 4 Ld.DR has not rebutted the averments made in the Affidavit.
In these facts and circumstances of the case, in the interest of justice, we set aside the Order of CIT(A) to CIT(A) for de-novo adjudication. Ld.CIT(A) shall provide proper opportunity of hearing to the assessee. Assessee shall file all details before the Ld.CIT(A).
Accordingly, appeal of the assessee is allowed for statistical purpose.
Delay : 11. There has been delay of 239 days in filling appeal before this Tribunal. We have studied the Affidavit filed by the assessee. Assessee submitted that he had not received the Appeal Order. Assessee also submitted that delay is not intentional. The substantial justice is more important than procedural delay. However, we are levying cost of Rs.25,000/- on assessee for the said delay. The Assessee shall pay the said amount of Rs.25000/- to the Legal Aid cell of the Hon’ble Bombay High Court and submit copy of evidence of payment to the ITAT. Subject to this condition Delay is condoned.
Order pronounced in the open Court on 29th Aug, 2025.