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Facts
The AO made an addition of Rs. 23,41,000/- under Section 69A for an unexplained cash deposit, which was confirmed by the CIT(A). The assessee contended that the deposit originated from the sale of agricultural land, which does not qualify as a capital asset, and alleged that the orders were passed ex-parte due to non-receipt of notices.
Held
The Tribunal found that the assessee had reasonable cause for non-compliance due to non-receipt of notices and admitted the additional evidence regarding the sale of agricultural land. Consequently, the matter was remitted to the Assessing Officer for a fresh examination, providing the assessee a reasonable opportunity to be heard.
Key Issues
The key issues were the validity of the addition for unexplained cash deposit from agricultural land sale and the propriety of ex-parte orders passed without proper notice or opportunity to the assessee.
Sections Cited
2(14), 69A, 144, 147, 148, 250
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Income Tax Appellate Tribunal, CHANDIGARH BENCHES, “SMC”
Before: SHRI. VIKRAM SINGH YADAV, AM
Order
PER VIKRAM SINGH YADAV, AM:
This is an appeal filed by the assessee against the order of the Ld. CIT(A)/ NFAC, Delhi dt. 17/11/2023 pertaining to Assessment Year 2012-13 wherein the assessee has taken the following grounds of appeal: 1. “That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. CIT (A), Ludhiana 3/0403/2019-20 has erred in passing order dtd. 17/11/2023 in contravention of provisions of S. 250 of the Income Tax Act, 1961 (hereinafter referred to as "Act").
2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO in initiating, continuing and concluding the impugned re-assessment u/s 147 r.w.s. 148 of the Act.
3. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the addition made by the Ld. AO of Rs. 23,41,000/- by erroneously holding cash deposit in bank during the relevant period as unexplained, even when the same was deposited out of the sale proceeds of the Agriculture Land (which has a distance of more than eight kilometres, from the local limits of municipality or cantonment board) of the appellant.
4. That on facts, circumstances and legal position of the case, the order passed by Ld. AO u/s 147 and then by Worthy CIT(A) u/s 250 deserves to be quashed since the same has been passed without affording reasonable opportunity of being heard to the appellant.
5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.”
2. Briefly the facts of the case are that the assessment in this case was completed under section 144 r.w.s 147 of the Act vide order dt. 25/11/2019 wherein the AO has brought to tax a sum of Rs. 23,41,000/- under section 69A of the Act in absence of any explanation submitted by the assessee to explain source of the said deposit in his bank account, which on appeal, has been sustained by the Ld. CIT(A) and against the said findings, the assessee is in appeal before us.
During the course of hearing, the Ld. AR submitted that both the assessment order as well as the order passed by the Ld. CIT(A) have been passed ex-parte qua the assessee. It was submitted that assessee did not receive any notice either from the AO or from the office of the Ld. CIT(A) and the notices have only been sent on the IT Portal and which could not be assessed by the assessee due to lack of technical knowledge. It was further submitted that the source of the cash deposit is out of the sale of the agriculture land jointly owned by the assessee alongwith his mother and in this regard, the assessee wishes to place on record copy of the sale deed executed on 02/06/2011 for Rs. 36,00,000/- as well as certificate from the Revenue authority certifying the land sold does not satisfy the criteria to be classified as a capital asset under section 2(14) of the Act. It was submitted that given the fact that the assessee was prevented from sufficient cause from making necessary compliance before the AO as well as the Ld. CIT(A), the assessee wishes to place on record the copy of the sale deed, the certificate and the bank statement by way of additional evidence and the same may be admitted and matter may be remitted to the file of the AO for necessary verification.
The Ld. DR is heard who has relied on the order of the lower authorities. At the same time, it was submitted that where the Bench so decide, the additional evidences need to be verified and the matter may be remitted to the AO.
After hearing both the parties and considering the material available on the record, I find that where the proceedings have been completed u/s 144 and the assessee has explained the reasonable cause for non-compliance due to non-receipt of notices, the aforesaid additional evidences which the assessee seeks to submit deserve to be admitted as the same goes to the root of the matter and the same are hereby admitted and the matter is remitted to the file of the AO to examine the same and taking into consideration the explanation which the assessee seek to furnish, decide the matter afresh as per law after providing reasonable opportunity to the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes.
(Order pronounced in the open Court on 20/01/2025 )