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Facts
The assessee is an individual who did not file an income tax return for AY 2017-18. The AO made additions of Rs. 1,51,60,650/- on account of alleged unexplained cash deposits and rental income. The assessee challenged the additions, claiming the cash deposit was Rs. 50,00,000/- from explained sources. The assessee failed to appear before the CIT(A) during pandemic restrictions, leading to the dismissal of their appeal.
Held
The Tribunal noted that the notices for assessment proceedings were sent during the Covid-19 pandemic restriction period. Considering the practical difficulties faced by the assessee, the Tribunal restored the issue to the Assessing Officer for a denovo assessment, providing a reasonable opportunity for hearing and submission of evidence.
Key Issues
Whether the assessment and additions made by the AO are valid given the circumstances of the pandemic and the assessee's failure to appear before the lower authorities, and if a denovo assessment is warranted.
Sections Cited
69A, 160, 148, 144, 147, 144B, 142(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, A BENCH,
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER:- This appeal at the instance of assessee is directed against the order dated 21.10.2024 passed by NFAC, Delhi u/s 250 of the Income-tax Act, 1961 which in turn is arising out of assessment order passed u/s 147 r.w.s 144 dated 17.03.2022. 2. Assessee has raised following grounds of appeal:- 1) On the facts and in law the A.O. has erred in making addition u/s. 69A of Rs. 1,50,00,000/-on account of unexplained cash deposited in bank whereas the actual cash deposited in bank is only Rs. 50,00,000/- (which is also from explained sources).
1. 2) On the facts and in law the A.O. has erred in making addition u/s 69A in spite of the fact that the actual cash deposit of Rs. 50,00,000/- in bank is from explained sources. 3) On the facts and in law the A.O. has erred in making addition of Rs. 1,60,650/- on account of interest income/income from house property. 4) On the facts and in law the A.O. has erred in reopening the assessment by issuing notice u/s 148 on the basis of factually incorrect reason that the assessee has deposited cash of Rs. 1,50,00,000/- in saving bank account 5) The appellant craves leave to add alter delete above or any other ground/s of appeal.
3. At the outset Ld. Counsel for the assessee submitted that the main reason for issuing notice u/s 148 and carrying out the reassessment proceedings was to examine the source of cash deposit of Rs. 1,50,00,000/- He submitted that the correct amount of cash deposit is Rs. 50,00,000/- and not Rs. 1,50,00,000/- He further submitted that the assessee has sufficient documentary evidence to explain the source of alleged cash deposits. He also fairly admitted that due to unavoidable circumstances assessee failed to appear before the lower authorities and therefore prayed that one more opportunity may please be granted and the issues may be restored back to the file of Jurisdictional Assessing Officer for Denovo assessment.
On the other hand Ld. Departmental Representative (DR) supported the order of both the lower authorities.
We have heard rival contentions and perused the record placed before us. The assessee who is an individual has not filed the return of income for A.Y. 2017-18. As per the information available with the Department the cash of Rs. 1,50,00,000/- deposited in Saving Bank account with Aurangabad Dist. Central Co-op. Bank and also rental income of Rs. 2,29,500/- from M/s B. G. Appliances Pvt. Ltd. Notices sent by the Assessing Officer (AO) u/s 148 and 142(1) of the Act were not complied with. Ld. AO passed best judgement assessment u/s 144 r.w.s 147 r.w.s 144B of the Act making Rs. 1,51,60,650/- The assessee challenged the additions before Ld. CIT(A) and in the statement of facts stated that the correct figure of cash deposit is 50,00,000/- and not Rs. 1,50,00,000/- As regards the alleged rental income of Rs. 2,29,500/- it was stated that the same was on account of hire charges received by assessee from B.G. Appliances Pvt. Ltd. for hiring Tata Sumo Vehicle. However after filing the appeal before Ld. CIT(A) assessee failed to appear on the date fixed on 17.09.2024, 26.09.2024 and 07.10.2024. Due to non compliance Ld. CIT(A) dismissed the assessee’s appeal.
We note that the notice of hearing sent in the course of assessment proceedings were sent on 13.11.2021, 04.02.2022 and 16.02.2022 which fall during the Covid 19 Pandemic restriction period. Considering the practical difficulties faced by the assessee we are of the considered view that the issue needs to be restored to the file of Ld. Jurisdictional Assessing Officer (JAO) for carrying out denovo assessment proceedings and decide the issue on merits of the case after considering the submissions and evidences placed by the assessee on being provided reasonable opportunity of hearing. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 13th day of August, 2025.