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Facts
The assessee filed their return of income and the case was selected for scrutiny. The Assessing Officer completed the assessment ex-parte under Section 144 due to non-response and added Rs.41,90,000/- on account of unexplained cash deposits during demonetization. The CIT(A) upheld the addition.
Held
The Tribunal restored the issue to the Assessing Officer, granting the assessee one last opportunity to substantiate their case with requisite details, noting the previous lack of explanation and non-appearance. A cost of Rs. 5,000/- was imposed on the assessee.
Key Issues
Whether the assessee should be granted a final opportunity to explain the source of cash deposits before the Assessing Officer, despite earlier non-compliance, and whether costs should be levied for non-compliance.
Sections Cited
143(2), 142(1), 144, 69A, 115BBE, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 28.10.2024 of the Ld. CIT(A) / NFAC, relating to assessment year 2017-18.
Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.41,90,000/- made by the Assessing Officer u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’)
Facts of the case, in brief, are that the assessee is an individual and has filed his return of income on 27.10.2017 declaring total income of Rs.25,06,150/-. The case was selected through CASS for scrutiny assessment for the reasons to verify large value cash deposit during demonetization period and abnormal increase in sales with decrease in profitability as compared to preceding previous year. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee. However, despite number of opportunities granted by the Assessing Officer, there was no response from the side of the assessee. The Assessing Officer, therefore proceeded to complete the assessment u/s 144 of the Act. He noted that the assessee during the demonetization period has deposited cash of Rs.41,90,000/-. Since there was no explanation from the side of the assessee to explain the nature and source of such cash deposits during the demonetization period, the Assessing Officer, invoking the provisions of section 69A r.w.s. 115BBE of the Act, made addition of Rs.41,90,000/- to the total income of the assessee.
Before the Ld. CIT(A) / NFAC the assessee filed certain details in the shape of additional evidences. However, the Ld. CIT(A) / NFAC rejected those evidences on the ground that the assessee was unable to explain the reasons as to why he did not file these details before the Assessing Officer despite sufficient opportunities granted. He, therefore, dismissed the appeal filed by the assessee.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the order of the Ld. CIT(A) / NFAC where the assessee had explained the reasons for non-appearance before the Assessing Officer which is due to the hospitalization of the mother of the assessee and non-service of notice physically but through ITBA portal. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate his case by filing the requisite details.
The Ld. DR on the other hand strongly objected to the arguments of the Ld. Counsel for the assessee and submitted that this is only a general statement made by the assessee. Referring to the order of the Assessing Officer, he submitted that the chronology of dates mentioned by the Assessing Officer in the assessment order speaks volumes. He accordingly submitted that the order of the Ld. CIT(A)/NFAC should be upheld and the grounds raised by the assessee be dismissed. In his alternate contention, the Ld. DR submitted that heavy cost should be levied on the assessee due to the assessee’s scant regard to the statutory notices issued by the department.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that despite number of opportunities granted by the Assessing Officer, the assessee did not respond to the notices for which he proceeded to complete the assessment u/s 144 of the Act and made addition of Rs.41,90,000/- u/s 69A r.w.s. 115BBE of the Act in absence of any details to explain the nature and source of such cash deposits during the demonetization period. We find although the assessee has produced certain evidences in shape of additional evidences under Rule 46A before the Ld. CIT(A) / NFAC, however, he rejected the same on the ground that the assessee could not justify the reasons for which he was prevented from not producing them before the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that in the interest of justice, the assessee should be given an opportunity to substantiate his case by filing the requisite details. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one last opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and make his submissions, if any, without seeking any adjournment under any pretext failing which the Assessing Officer shall be at liberty to pass appropriate order as per law. At the same time, because of the scant regard of the assessee to the statutory notices issued by the department, we levy cost of Rs.5,000/- on the assessee which shall be deposited within two months from the receipt of this order. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 19th May, 2025.