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Facts
The assessee, an individual, did not file a return for AY 2017-18. The AO made additions based on cash deposits and other credits, treating them as unexplained money. The CIT(A) upheld these additions. During remand proceedings, the assessee allegedly failed to appear, leading to the dismissal of the appeal.
Held
The Tribunal noted that the assessee had submitted substantial documentation to explain the deposits and credits. The CIT(A) primarily relied on the remand report without examining the merits. Therefore, the Tribunal decided to grant the assessee one more opportunity to present their case before the CIT(A).
Key Issues
Whether the CIT(A) erred in dismissing the appeal without a proper hearing on merits, and whether the assessee should be granted a fresh opportunity to present their case.
Sections Cited
144, 250, 69A, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
Assessee by : Shri Abhay Avachat Revenue by : Shri Aviyogi Ambadkar, Additional CIT Date of hearing : 11.03.2025 Date of : 26.03.2025 pronouncement आदेश/ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of the assessee is directed against the order of Ld. CIT(A) NFAC dated 26.11.2024 u/s 250 of the Income-tax Act, 1961 which is arising out of Assessment Order passed u/s.144 of the Act dated 24.12.2019.
Assessee has raised following grounds of appeal:-
1. The learned AO has erred in making addition u/s 69A of Rs. 21,47,300/- by treating cash deposits in bank during the year as unexplained money and the learned CIT A erred in sustaining the same.
2. The learned AO has erred in making addition u/s 69A of Rs. 19,80,633/- by treating cash / bank credits entries other than cash deposits in bank accounts during the year as unexplained money and the learned CIT A erred in disallowing the same.
The learned AO has erred in making addition of Rs. 681/- towards bank interest and the learned CIT A erred in sustaining the same.
4. The AO erred in not considering the withdrawals, sources and expenses incurred during the year under consideration while making additions.
The AO erred in making addition of whole gross deposits in Bank account. It is prayed that, if at all, addition is required then same may please be restricted to net taxable income embedded in such gross receipts as Income Tax is on net income and not on Gross receipts.
6. The AO has erred in invoking provisions of section 69A despite the same were not applicable to assessee's case, 7. The learned AO is not justified in charging interest u/s 234C and the same may please be cancelled as Interest u/s 234C is applicable only on Returned Income and not assessed income. 8. The lower authorities did not consider the fact that assessee is an agriculturist and he is not having any other income than from agricultural operations. 9. The learned CIT Appeals erred in dismissing assessee's appeal without hearing the case on merits and affording adequate opportunity of being heard. The appellate proceedings, thus, suffer from principles of natural justice and needs to be set aside. 10. The assessee prays before your honour to afford and allow him an opportunity of being heard in interest of natural justice and on merits of the case as well, before the lower authorities. 11. The assessee craves leave to add, alter, amend, modify, and delete all or any of the grounds of appeal.
3. At the outset Ld. counsel for the assessee referred to ground No. 9 and 10 of the instant appeal requesting for granting one more opportunity to go before Ld. CIT(A) on merits of the case. On the other hand Ld. CIT(A) opposed the request stating that assessee has not complied during the assessment as well as remand proceedings.
We have heard the rival contentions and perused the record placed before us. We find that the assessee is an individual who did not file any return for A.Y. 2017-18. Based on the information about huge cash deposits and other credits, case selected for scrutiny but subsequently for lack of sufficient explanation by assessee Ld. AO passed best judgement assessment, assessing income at Rs. 41,28,614/- The assessee challenged the addition made by Ld. AO and filed various details, explanation and additional evidence to explain the source of alleged unexplained credits/deposits, however in the remand proceedings assessee failed to appear as alleged by Ld. CIT(A) resulting into dismissal of the appeal.
5. We have gone through the detailed submission filed by the assessee before Ld. CIT(A) and notice that the assessee has furnished Form 7 for land holding, copy of sale invoice of agricultural produce i.e. cotton sale with weight and rate, copy of Bank Statement of HDFC Bank OD account and HDFC Bank account, sanction letter of HDFC Overdraft Loan account, summarized statement of cash flow explaining source of cash deposit alongwith annexure explaining Bank Transactions and also the documents relating to the relatives who gave loan to the assessee alongwith their PAN/Aadhaar Card and Form 7. We notice that in spite of furnishing all these details, Ld. CIT(A) solely relied upon the remand report where the Ld. AO alleged that assessee had not appeared during the remand proceedings, but Ld. CIT(A) seems to have failed to examine the merits of the case in entirety.
We accordingly considering the facts and circumstances of the case and also being fair to both the parties deem it proper to provide one more opportunity to the assessee for pleading its case before Ld. CIT(A) on merits of the case. Needless to mention that Ld. CIT(A) shall provide reasonable opportunity of hearing to the assessee before passing a speaking order and decide the issue on merits in accordance with law. Assessee is directed to remain vigilant and not to take unnecessary adjournment. Assessee is also directed to ensure that its correct email address and other contact detail are updated on the Income Tax Website (In case they are changed). Accordingly 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 26th day of March, 2025.