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Facts
The assessee, an individual, failed to file a return of income for AY 2012-13. The AO noted substantial cash deposits in the assessee's bank account and issued notices, but the assessee did not respond. Consequently, the AO added Rs. 81,13,000/- as unexplained money under Section 69A of the Income Tax Act.
Held
The Tribunal observed that the assessee presented a reasonable case for the cash deposits/credits after being given an opportunity to present evidence. Therefore, in the interest of justice, the matter was restored to the Assessing Officer for de-novo consideration.
Key Issues
Whether the assessee's cash deposits in the bank account are unexplained money, and whether an opportunity of hearing was adequately provided to the assessee.
Sections Cited
69A, 144, 274, 271(1)(c)
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2012-13) Sumanbhai Keshavlal Patel, Vs. Income Tax Officer, B/603, Sammet Platinum, Nr. Ward-5, Makarba Railway Crossing, Kadi Makarba, Nr. Sarkhej Gandhinagar Highway, Ahmedabad-380051 [PAN No.ABRPP9510C] (Appellant) .. (Respondent) Appellant by : Shri Pritesh Shah, C.A. Respondent by: Shri Atul Pandey, Sr. DR 13.01.2025 Date of Hearing Date of Pronouncement 25.02.2025 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 (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 17.10.2023 passed for A.Y. 2012-13.
The assessee has taken the following grounds of appeal:-
“1. The learned CIT(A) erred in law and on facts in not granting the adequate opportunity of being heard to the appellant during the course of appellate proceedings, such opportunity should have been granted in the interest of justice.
2. The learned CIT(A) erred in law and on facts in confirming the addition of Rs. 15,43,000/- in respect of the cash deposited into HDFC Bank made by AO, considering the same as unexplained money under section 69A of the Income Tax Act, 1961, such addition is requested to be deleted.
Sumanbhai Keshavlal Patel vs. ITO Asst.Year –2012-13 - 2– 3. The learned CIT(A) erred in law and on facts in confirming the addition of Rs. 65,70,000/- in respect of the credit entries in the bank account, considering the same as unexplained money under section 69A of the Income Tax Act, 1961, such addition is requested to be deleted.”
The brief facts of the case are that the assessee is an individual and did not file return of income for the impugned year under consideration. On verification of the data obtained by the Assessing Officer, he noted that the assessee had deposited cash amounting to Rs. 12,50,000/- in his bank account maintained with HDFC Bank Ltd. However, despite such substantial cash deposit, the assessee did not file return of income for the impugned year under consideration. The Assessing Officer issued notice to the assessee, in response to which the assessee submitted it’s computation of income, balance sheet and Profit & Loss Account. However, no explanation in respect of source of cash deposited in his bank account was furnished by the assessee. Thereafter, the Assessing Officer issued several notices of hearing to the assessee to explain the sources of cash deposit and other credits appearing in the bank account of the assessee, amounting to Rs. 81,13,000/-. However, the assessee did not respond to any of the notices issued by the Assessing Officer and neither furnished any explanation with respect to source of various cash deposits/credit entries appearing in his bank account held with HDFC Bank Ltd. Accordingly, in absence of any response received by the assessee, the Assessing Officer made addition of Rs. 81,13,000/- as unexplained money in the hands of the assessee under Section 69A of the Act with the following observations:
“As a sufficient time has been elapsed and the assessee has granted sufficient opportunity to explain the sources of cash deposited and other credit entries in bank account maintained with HDFC Bank, Hence, no further opportunity is being given and the matter is being finalized ex-partee invoking provision of section 144 of the Act. The last show cause notice dtd. 21/12/2019 was duly served upon the assessee through Sumanbhai Keshavlal Patel vs. ITO Asst.Year –2012-13 - 3– personally. As no reply filed by the assessee it is clear that the assessee failed to furnish any explanation in respect of cash and other deposits of Rs. 81,13.000/- in his bank account No. 01901070003687 with HDFC Bank, Gandhinagar Branch and the cash deposits in his bank account remains unexplained. Hence the amount of Rs 81,13,000V- is treated as unexplained money in his bank account in terms of section 69A of the Act, added to total income of the assessee and taxed accordingly. The penalty proceeding for concealment of particulars of his income are being initiated separately by way of issuing notice u/s 274 r.w.s. 271 (l)(c) of the Income Tax Act, 1961.”
The appeal of the assessee was dismissed by Ld. CIT(A) on account on non-appearance. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A).
Before us, the Counsel for the assessee filed written submissions alongwith additional evidences in support of the cash deposits/credits appearing in the bank account of the assessee, held with HDFC Bank. The Counsel for the assessee submitted that the assessee is a farmer and having education only up to 12th standard. The Counsel for the assessee submitted that the assessee, alongwith two of his brothers had ancestral land, in which each of the brothers were having 1/3rd share. During this year, such ancestral land was sold by all three brothers on 05.09.2011 for a total consideration of Rs. 1,20,00,000/- and the assessee’s share in such land was Rs. 40,00,000/-. The Counsel for the assessee submitted that the assessee has a good case on merits and if given an opportunity of hearing, he would be in a position to give/furnish supporting evidences in support of cash deposits/credit entries appearing in his bank account. Accordingly, in light of the above facts, the Counsel for the assessee requested that the matter may be restored to the file of the Assessing Officer for de-novo consideration, since the assessee has a Sumanbhai Keshavlal Patel vs. ITO Asst.Year –2012-13 - 4– good case on merits and is in a position to give complete break-up of source of deposits/credits appearing in his bank account.
In response, Ld. D.R. placed reliance on the observations made by the Assessing Officer/CIT(A) in their respective orders.
On going through the written submissions/details filed by the Counsel for the assessee, we are of the considered view that the assessee has made out a reasonable case in support of the cash deposits/credits appearing in his bank account held with HDFC Bank. Accordingly, in the interest of justice, the matter is hereby directed to be restored to the file of the Assessing Officer, for de-novo consideration, after giving due opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 25/02/2025