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Facts
The assessee's case was reopened under Section 147 due to unexplained cash deposits of Rs. 10,77,850/- made during the demonetisation period. Due to non-compliance with notices under Sections 148 and 142(1), the AO added the entire amount under Section 69A, which was upheld by the CIT(A). The assessee claimed non-compliance due to communication issues and sought an opportunity to explain the deposits.
Held
The Tribunal condoned the 50-day delay in filing the appeal, set aside the CIT(A)'s order, and restored the matter to the Assessing Officer. The AO is directed to give the assessee a final opportunity to furnish evidence for the source of cash deposits and pass a fresh order after affording due opportunity of hearing.
Key Issues
Whether the reassessment and addition of unexplained cash deposits under Section 69A were valid, and whether the assessee should be granted a further opportunity to explain the source of deposits.
Sections Cited
250, 147, 69A, 148, 142(1), 144
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This appeal by the assessee arises out of the order of the Ld. CIT(A)/NFAC, Delhi dt. 17.01.2025 passed under section 250 of the Income-tax Act, 1961 for the assessment year 2017-18. 2. The assessee has raised multiple grounds challenging the validity of reassessment u/s 147, the service of notice, and the addition of Rs.10,77,850/- u/s 69A on account of alleged unexplained cash deposits.
At the outset the Registry has pointed out that the above appeal is barred by limitation by 50 days.
After considering the condonation application filed by the assessee in the present appeal, we condone the delay for which sufficient cause is shown, and admit the appeal for adjudication.
The brief facts of the case are that the assessee, an individual, had filed his return of income on 15.03.2018 declaring an income of Rs.2,88,760/-.
2 Based on information regarding cash deposits of Rs.10,77,850/- during the demonetisation period in Punjab National Bank, the case was reopened u/s 147. The assessee did not comply with notices u/s 148 and 142(1). Consequently, the Assessing Officer completed assessment u/s 147 r.w.s. 144 making addition of the entire cash deposits u/s 69A.
Against the order of the AO the assessee went in appeal before the Ld. CIT(A), who had confirmed the action of the Assessing Officer by holding that the assessee had not cooperated during assessment as well as appellate proceedings, despite repeated opportunities. The grounds regarding reopening, approval, and service of notice were dismissed, and the addition was sustained for want of evidence.
Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.
Before us, the Ld. AR submitted that due to inadvertent reasons and wrong communication of email addresses, the assessee could not effectively present his case either before the Assessing Officer or before the CIT(A). It was submitted that the assessee had sufficient bank withdrawals and genuine business transactions to explain the deposits, and prayed that one more opportunity be granted in the interest of justice.
The Ld. DR, on the other hand, relied on the orders of the lower authorities and contended that adequate opportunities were provided which the assessee failed to avail.
We have considered the rival submissions and perused the record. It is evident that the addition has been made without any explanation from the assessee owing to his non-compliance. However, the grounds raised before the CIT(A) indicate that the assessee seeks to explain the deposits with reference to cash withdrawals and business transactions. In the interest of 3 substantial justice, we are of the view that the assessee deserves one final opportunity to substantiate his case.
10.1 Accordingly, we set aside the impugned order of the CIT(A) and restore the matter to the file of the Assessing Officer. The assessee is directed to furnish certified copies of his bank statements and necessary evidence to demonstrate the source of cash deposits. The Assessing Officer shall consider the same and pass a fresh order in accordance with law after affording due opportunity of hearing. The assessee is also directed to extend full cooperation and not to seek unwarranted adjournments.
In the result, the appeal is allowed for statistical purposes.