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Facts
The assessee, a partnership firm running a sweet shop, was selected for scrutiny due to large cash deposits during demonetization. A best judgment assessment was made under Section 144 of the Act after the assessee failed to appear. The assessee appealed to the CIT(A) and sought to admit additional evidence, explaining non-compliance due to a partner's illness.
Held
The Tribunal noted that the CIT(A) had not admitted the additional evidence. Considering the facts and the interest of justice, the matter was remitted back to the CIT(A) for fresh adjudication after considering the additional evidence and submissions.
Key Issues
Whether the CIT(A) was justified in not admitting additional evidence filed by the assessee during the appeal proceedings. Whether the non-compliance by the assessee before the AO was on reasonable cause.
Sections Cited
250, 144, 69A, 115BBE, 46A
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
This appeal filed by the assessee pertaining to the assessment year 2017-18 is directed against the order dated 04.03.2025 of Addl/JCIT(A)-1, Chandigarh passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) which inturn is arising out of the Assessment Order dated 05.11.2019 passed u/s.144 of the Act.
In the instant appeal, assessee has raised following grounds of appeal :
“1] The learned CIT(A) erred in dismissing the appeal in limine by refusing to admit additional evidences and thereby confirming the addition u/s 69A of Rs.7,08,800 made by the A.O. in the ex-parte asst. order u/s 144 by taxing entire cash deposits made during the year under consideration as in demonetization period without appreciating that the said action of the CIT(A) was not justified on facts of the case and in law. 2] The learned CIT(A) failed to appreciate that there was a reasonable cause due to which the notices issued by the A.O. during asst. proceedings could not be complied with, by the appellant in as much as, the partner of the appellant who was son of one partner and brother of the other partner was suffering from cancer during the relevant period and therefore, the impugned additional evidences furnished u/r 46A before the CIT(A) ought to have been admitted in the interest of justice. 3] The learned CIT(A) ought to have appreciated that the impugned additional evidences were extremely necessary for adjudicating the merits of the issue involved in appeal and the action of the A.O. in taxing the entire cash deposits made during the year by the appellant firm was apparently unjustified and hence, the said additional evidences should have been admitted in the interest of justice.. 4] The learned CIT(A) erred in not appreciating that the source of the entire cash deposits was duly explained by the appellant in the detailed written submissions and supporting documentary evidences filed before the CIT(A) and therefore, the addition u/s 69A of Rs.7,08,800 made by the A.O. by taxing the entire cash deposits made during the year as unexplained income was not justified. 5] The appellant craves leave to add/ alter/ amend any of the grounds of appeal.”
3. When the appeal was called for, none appeared on behalf of the assessee despite due service of notice of hearing. With the assistance of ld. Departmental Representation and on perusal of the record, I notice that one of the grievance of the assess is that ld.CIT(A) has not admitted the additional evidences filed by the assessee under Rule 46A of the Income Tax Rules, 1962 and therefore in Ground No.2 assessee has pleaded that ld.CIT(A) ought to have admitted the additional evidences in the interest of justice so as to decide the issue on merits. Ld. Departmental Representative raised no objection if the issues are restored to the file of ld.CIT(A) for necessary adjudication.
4. I have heard the Ld. Departmental Representative and perused the record placed before me. On perusal of record, I notice that the assessee which is a partnership firm running a Sweet shop, assessment year 2017-18 selected for scrutiny for the reason of large cash deposit cash deposited during the demonetization period. Though statutory notices were validly served but assessee failed to appear resulting into best judgment assessment u/s.144 of the Act assessing the income at Rs.7,08,800/- after making addition for unexplained money u/s.69A of the Act r.w.s.115BBE of the Act.
I further observe that assessee filed appeal before ld.CIT(A) along with furnishing the additional evidences. It was also stated before ld.CIT(A) that reason for non-compliance before the Assessing Officer was illness of one of the partner of the appellant firm who is suffering from Cancer during the relevant period and nobody was looking after the taxation work properly. Though assessee has furnished additional evidences but ld.CIT(A) did not admit. Under these given facts and in the interest of justice and being fair to both the parties, I deem it proper to remit the issues raised on merit in the instant appeal back to the file of ld.CIT(A) for necessary adjudication which shall be carried out after considering the additional evidences and submissions to be filed by the assessee. Ld.CIT(A) shall grant reasonable opportunity of hearing to the assessee and pass a speaking order as contemplated u/s.250(6) of the Act. Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the 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 20th day of June, 2025.