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Facts
The assessee deposited substantial cash during the demonetization period, claiming the source was payments from sundry debtors. The Assessing Officer rejected the books of account and made an addition under Section 68 read with Section 115BBE, as the assessee failed to provide sufficient evidence for the source of deposits. The CIT(A) upheld the AO's order due to lack of evidence and the assessee's non-cooperation.
Held
The Tribunal condoned the delay in filing the appeal. It restored the matter to the Ld. CIT(A) for de-novo consideration, conditioned on the assessee depositing Rs. 10,000/- to the Prime Minister Relief Fund due to their non-cooperative attitude during the previous appellate proceedings. The appeal was allowed for statistical purposes.
Key Issues
Whether the addition for unexplained cash deposits during demonetization was justified given the assessee's failure to substantiate the source, and if the matter should be remanded to the CIT(A) for fresh consideration despite the assessee's non-cooperation.
Sections Cited
143(3), 250, 145, 68, 115BBE, Rule 46A, 143(2)
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2017-18) Munisuvrat Digimac Pvt. Ltd., Vs. Income Tax Officer, 4, Mill Officers Colony, Opp. Ward-2(1)(1), Times Of India, Behind Old RBI Ahmedabad Bank, Ashram Road-380009 [PAN No.AAFCM8499P] (Appellant) .. (Respondent) Appellant by : None Respondent by: Ms. Bhavnasingh Gupta, Sr. DR 01.05.2025 Date of Hearing Date of Pronouncement 18.06.2025 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 14.09.2023 passed for A.Y. 2017-18.
The Assessee has taken the following grounds of appeal:-
“1. The assessment order passed u/s. 143(3) of Income Tax Act by the Assessing Officer and confirmed the first appellate authority u/s. 250 is bad in law and deserved to be uncalled for.
2. The assessing officer as well as first appellate authority has erred in law and on facts in making and confirming respectively the addition of Rs. 26,35,590/-. The same deserves to be deleted.
The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing.”
Munisuvrat Digimac Pvt. Ltd. vs. ITO Asst.Year –2017-18 - 2– 3. At the outset, we observe that the appeal is time barred by 370 days. The assessee filed an Affidavit dated 03.02.2025 where the assessee submitted that the assessee had given all documents to the Tax Consultant for filing the appeal, but due to some personal reasons the Tax Consultant did not file the appeal before ITAT within stipulated time. It was as a result of aforesaid reasons that there was a delay of 370 days in filing of the present appeal. The Counsel for the assessee submitted that there was no mala fide intention in delay in the filing of the appeal and hence the same may be kindly condoned. Looking into the contents of Affidavit filed by the assessee, the delay is hereby condoned, in the interest of justice.
The brief facts of the case are that during the course of assessment the Assessing Officer observed that substantial cash deposits of Rs. 28,00,000/- was deposited by the assessee, during the demonetization period. On being asked, the assessee submitted that the source of cash deposits is from payments received by the assessee from sundry debtors, which were then deposited by the assessee in his bank account during the demonetization period. However, the Assessing Officer was of the view that assessee failed to submit any supporting confirmation or any other details with respect to such debtors, supporting sale bills etc. Accordingly, the Assessing Officer after discussing the facts of the assessee’s case, the scheme of demonetization, and on comparison of quantum of cash deposits made by the assessee in the pre / post demonetization period, rejected the books of accounts of the assessee under Section 145 of the Act. Further, the Assessing Officer held that the source of cash deposits in SBN of Rs. 26,96,812/- were not proved by the assessee as having been generated from business activity / Munisuvrat Digimac Pvt. Ltd. vs. ITO Asst.Year –2017-18 - 3– cash sales and accordingly, the Assessing Officer treated the same as income from undisclosed sources under Section 68 r.w.s. 115BBE of the Act.
In appeal, Ld. CIT(A) observed that assessee failed to respond to various notices issued over a period of the past two and half years. Accordingly, Ld. CIT(A) was of the view that the assessee was not in possession of sufficient evidences to justify it’s grounds of appeal. Accordingly, Ld. CIT(A) dismissed the appeal of the assessee with the following observations:
“6.3 In the statement of facts filed with the Form No. 35, the appellant has claimed that the impugned amount of cash is out of cash sales. It has been claimed that the source of the same will be disclosed during assessment proceedings. However, the same were not explained before the AO. Also, it is noted that there is no request for submitting any documentary evidence before NFAC under Rule 46A (Column-12 of Form No. 35), even though no documentary evidence relied upon list has also been submitted in Form 35. Further, no submission has been made and no evidence submitted before NFAC till date. This shows that the appellant does not possess the relevant details viz. details of alleged debtors from whom impugned cash was received and other supporting details to prove its grounds of appeal
. 6.4 In the first ground of appeal, the appellant has claimed that the order u/s 143(3) was bad in law, without giving further details. As noted in the assessment order, notice u/s.143(2) was validly issued and served on the appellant and assessment proceedings were finalised following due procedure. Hence, ground 1 is dismissed. 6.5 In Ground no. 2, the appellant has disputed the addition made by the AO. However, no submission or supporting evidences were to prove that the additions were not required to be made in its case have been submitted before NFAC despite more than 2 and half years. In the given facts and circumstances, the reasons given by the AO for rejecting the books of accounts of the appellant and making the impugned additions are found correct. Therefore, ground No. 2 is dismissed.”
6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A).
Munisuvrat Digimac Pvt. Ltd. vs. ITO Asst.Year –2017-18 - 4– 7. Before us, the Counsel for the assessee submitted that the assessee has a good case on merits and if given an opportunity of being heard, the assessee would in a position to substantiate the source of cash deposited in his bank account.
On going through the facts of the instant case, we observe that there was no appearance on part of the assessee before Ld. CIT(A), during the course of appellate proceedings. However, in the interest of justice, the matter is hereby directed to be restored to the file of Ld. CIT(A) for de-novo consideration. However, given the non-cooperative attitude of the assessee through the course of appellate proceedings before Ld. CIT(A), the asessee is hereby directed to deposited a sum of Rs. 10,000/- to the Prime Minister Relief Fund for getting the matter restored to the file of CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 18/06/2025
Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 18/06/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,