ANIL KUMAR 244 DEHAR NARAINGARH AMBALA,AMBALA vs. THE INCOME TAX OFFICER WARD-1 AMBALA, AMBALA

The brief facts of the case are that the assessee had filed his return of income declaring income of Rs.2,52,110/-. The case was selected for limited scrutiny for verification of cash deposits during the demonetization period. Statutory notices under sections 143(2) and 142(1) were issued; however, no effective compliance was made by the assessee. Consequently, the Ld. AO proceeded to make an addition of Rs.12,51,300/- under section 69A of the Act, treating the cash deposits in the bank account as unexplained.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). However, despite grant of multiple opportunities, neither the assessee nor any authorized representative appeared before the Ld. CIT(A), and no submissions or documents were filed. Consequently, the Ld. CIT(A) upheld the additions made by the AO and dismissed the appeal.

Before us, the Ld. AR submitted that the assessee was prevented by sufficient cause from complying with the notices issued during assessment and appellate proceedings, as he resides in a remote rural area with poor connectivity. It was 2 further contended that the deposits were made in the ordinary course of business as a branch representative of the Central Bank of India and were duly authorized. However, due to non-representation and lack of documentary evidence on record, the authorities below failed to examine the genuineness of the explanation.

Per contra, the Ld. Sr. DR relied on the order of the lower authorities.

We have heard the rival contention and perused the material available on the record. We find merit in the plea of the assessee that the matter requires proper factual verification regarding the source and nature of the cash deposits. In the interest of justice and to afford fair opportunity to the assessee, we are inclined to set aside the impugned order and restore the matter to the file of the Assessing Officer. 6.1. Accordingly, the matter is remanded back to the file of AO for denovo adjudication. The AO shall afford reasonable opportunity to the assessee to furnish relevant documents and explanations and shall pass a speaking order in accordance with law.