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Facts
The assessee filed a return of income, but the AO initiated proceedings under Section 147 due to cash deposits of over ₹10 lakhs in the bank account. Despite several notices, the assessee did not comply, leading to an addition of ₹15.80 lakhs under Section 69A. The CIT(A) confirmed the addition as the assessee did not appear or provide evidence.
Held
The Tribunal condoned the delay in filing the appeal. However, considering the assessee's failure to provide satisfactory explanations or evidence during assessment and appellate proceedings, and the fact that the assessee did not respond to notices, the previous order was not interfered with initially. Subsequently, due to the assessee's ill health and demise, the matter was restored to the Assessing Officer for de novo consideration.
Key Issues
Whether the addition made by the AO on account of unexplained cash deposits is justified when the assessee failed to furnish proper evidence and explanations? Whether the appeal should be allowed for de novo consideration due to the death of the assessee and submission of new evidence?
Sections Cited
147, 69A
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2011-12) Kalubhai Maghabhai Bharvad Vs. Income Tax Officer, (Through L/H Takhuben Bharvad), Ward-1(3)(1), Behind Jogni Mata Temple, Nr. Petlad Prathmik Shala, Vill. Isharwada, Dist. Anand-388180 [PAN No.ACQPB4728L] (Appellant) .. (Respondent) Appellant by : None Respondent by: Adjournment Application Filed (Sr. DR) 15.05.2025 Date of Hearing Date of Pronouncement 26.05.2025 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)”), ADDL/JCIT (A), Mysore vide order dated 04.12.2023 passed for A.Y. 2011-12.
The Assessee has taken the following grounds of appeal:-
“1. The Ld. CIT(A)-NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs. 15,80,000/-. 4. The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeals.”
Kalubhai Maghabhai Bharvad (T/L/H Takhuben Bharvad) vs. ITO Asst.Year –2011-12 - 2– 3. At the outset, we observe that the appeal is time barred by 308 days. The delay of 308 days is condoned on due consideration of facts of assessee’s case and owing to no perceptible prejudice to other side.
The brief facts of the case are that the assessee filed return of income declaring total income of ₹1,48,990/- and agricultural income of ₹8,95,100/-. As per information available with the Income Tax Department, the assessee had made cash deposits of over ₹10 lakh in his Bank of India account, during the impugned year under consideration. Accordingly, the assessing officer initiated proceedings under section 147 of the Act to verify the source of cash deposits made by the assessee in his bank account. During the course of assessment, several notices of hearing were issued to the assessee, however there was no compliance on the part of the assessee. The assessing officer observed that there were cash deposits of ₹15 lakhs in the bank account of the assessee and further there were credit entries of ₹80,000/- in the bank account of the assessee maintained with Bank of India. The assessing officer observed that despite issuance of several notices of hearing, the assessee did not comply and accordingly, he made addition of ₹15.80 lakhs to the income of the assessee, under section 69A of the Act.
In appeal before CIT(Appeals), despite issuance of several notices of hearing, none appeared on behalf of the assessee. Accordingly, CIT(Appeals) confirmed the order of the assessing officer, with the following observations:
Kalubhai Maghabhai Bharvad (T/L/H Takhuben Bharvad) vs. ITO Asst.Year –2011-12 - 3– “8.1. The appellant's contentions in the form of Grounds of appeal is considered. Of course, the appellant had attributed the reason to his old age due to which he could not file the return of income and furnish the details called for before the AO during the course of the assessment proceedings. But, in the absence of furnishing any further submissions substantiating the grounds of appeal with supporting credible documentary evidences to verify the genuineness of the contentions raised, they are not acceptable as real and genuine. It was obligatory on the part of the appellant to furnish proper submission with credible documents to prove the same to the Assessing/Appellate authority with the effect that the addition was wrongly made by the Assessing Officer. In this case, the assessee/appellant failed to do the same both before the Assessing Officer and subsequently before the first Appellate Authority. Reliance is placed in this regard on the decision of the Hon'ble Supreme Court in the case of Kale Khan Mohammad Hanif v. CIT [1963]
50. ITR 1 wherein it was, held that "If an assessee fails to prove satisfactorily the source and nature of certain amount received during the accounting year, the Assessing Officer is entitled to draw the inference that the receipts are of an assessable nature". 8.2. In view of the above discussion, and bearing in mind the entirety of the case accompanied by the fact that appellant has not furnished any satisfactory explanation supported by cogent material evidence, either during the course of assessment proceedings or appellate proceedings. Further, the appellant has never responded to any of the notices issued during the assessment proceedings or appellate proceedings. Despite availing ample opportunities during the appellate proceedings, the nature of the appellant is defiant to the statutory proceedings and appellant has also failed to fight for his own cause, where an appeal is filed by his own motion. It is opined that the order of the Assessing Officer does not suffer from any infirmity to warrant interference. Therefore, the addition made therein is sustained. 8.3. It is pertinent to mention that the appellant was provided as many as 4 opportunities during the appellate proceedings. However, the appellant has not produced any documentary evidence in support of his claim. Also, the appellant failed to furnish proper explanation with supporting documentary evidence to prove his contentions during the course of the appellate proceedings too. Since the appellant did not respond to any of the four hearing notices sent to his email id, this appellate authority is of the opinion that this ground of appeal does not have any leg to stand upon and hence, the Ground No. 1 of the appeal raised by the appellant is dismissed in the absence of any supporting document.”
Before us, the Counsel for the assessee filed paper book stating that the assessee had not been keeping well for a long time and had ultimately expired on 24th December, 2024. Further, the assessee also filed revised Form 36, bringing the legal heirs of the assessee on record. The Counsel for the assessee also furnished medical and payment receipts to Kalubhai Maghabhai Bharvad (T/L/H Takhuben Bharvad) vs. ITO Asst.Year –2011-12 - 4– demonstrate that the assessee had been unwell for a long time and was undergoing treatment. The assessee also filed sale bills towards sale of rice (agricultural produce) to demonstrate that the assessee was earning agricultural income, which were duly disclosed by the assessee in its return of income, for the impugned year under consideration. On going through the facts of the assessee’s case and the details filed by the assessee before us, in the interest of justice, the matter is hereby restored to the file of the assessing officer for de novo consideration. The legal heirs of the assessee would be at liberty to furnish any evidence, in support of its case, during the course of proceedings before the assessing officer.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 26/05/2025
Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 26/05/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,