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Facts
The assessee failed to file the return of income. The AO, upon receiving information about substantial cash deposits during demonetization, issued notices, to which there was no response. The AO treated cash deposits as unexplained income and estimated business income, completing the assessment ex-parte.
Held
The Tribunal, noting the assessee's failure to appear and the need for substantial justice, restored the appeal to the Assessing Officer for one last opportunity to present the case and evidence. The assessee was cautioned to comply with future directions.
Key Issues
Whether the ex-parte assessment order, based on unexplained cash deposits and estimated business income, is sustainable when the assessee claims the bank account was not theirs and seeks an opportunity to present evidence.
Sections Cited
133(6), 69A, 44AD, 144, 115BBE, 271AAC, 272A(1)(d), 271F
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Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Ashok Kumar Misra v. Income Tax Officer House No.84/120, Karwal Kanpur HO Nagar, Kanpur TAN/PAN:ADGPM7112G (Appellant) (Respondent) Appellant by: None Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 21 01 2025 Date of pronouncement: 23 01 2025 O R D E R
This appeal has been preferred by the assessee against the order dated 28.06.2024, passed by the Ld. Addl/JCIT(A)-2, Ahmedabad for Assessment Year 2014-15.
2. The brief facts of the case are that the assessee did not file the return of income for the year under consideration. Since the Income Tax Department was in possession of information that the assessee had deposited substantial cash in his bank accounts during the demonetization period, the Assessing Officer (AO) issued statutory notices to the assessee calling for explanation of the deposits. However, there was no response from the side of the assessee. He, therefore, issued notice under section 133(6) of the Income Tax Act, 1961 (hereinafter called “the Act’) to the Branch Manager, Bank of Baroda, Birhana Road, Kanpur calling for bank account statement of the assessee for the period 01.04.2015 to 31.30.2017. A perusal of the bank statement of Account No.00610200000200 maintained with Bank of Baroda, Birhana Road, Kanpur revealed that the assessee had made cash deposits of Rs.12,49,000/- during the demonetization period (09.11.2016 to 30.12.2026) and of Rs.52,75,855/- during the period other than demonetization period in the year under consideration. Since there was no compliance from the side of the assessee to the statutory notices issued by the AO, the AO treated the amount of Rs.12,49,000/- deposited by the assessee during the demonetization period in his bank account, as unexplained money and added the same to the income of the assessee under section 69A of the Act. The other amount of Rs.52,75,855/- deposited by the assessee during the period other than demonetization period in the year under consideration, was treated as business receipts of the assessee and the AO further estimated the income @ 8% on such receipts, under section 44AD of the Act, which came to Rs.4,22,068/-. The AO, accordingly, completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.16,71,068/-.
2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271AAC, 272A(1)(d) and 271F of the Act, separately.
3. Aggrieved, the Assessee preferred an appeal before the ld. First Appellate Authority. However, the appeal before the Ld. Addl.JCIT(A)-2, Ahmedabad came to be dismissed for the reason of non-compliance by the Assessee.
Now, the assessee has approached this Tribunal challenging the action of the Ld. Addl.JCIT(A)-2, Ahmedabad by raising the following grounds of appeal:
1. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals), erred in confirming the addition U/s 69A of the Act amounting to 12,49,000.00 and 4,22,068.00 U/s 44AD of the Act, against facts and law.
The Learned Commissioner of Income Tax Appeals (CIT-A) has without going into the facts and not relying on the facts of the case has not observed that the bank account was not that of the appellant in which credits are appearing so as to tax deposits during demonetization U/s 69A amounting to 12,49,000.00 and presumptive income U/s 44AD of the Act amounting to 4,22,068.00.
That the order is bad in law, not in agreement with facts and is against the principles of natural justice.
4. The Appellant craves to leave to add, alter, amend, and/or to modify any Grounds of Appeal
, if necessary
5. None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment application received in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.
The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer.
I have heard the Ld. Senior Departmental Representative and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the Assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the Assessee to present his case and produce the necessary evidences in support of the transactions entered into by the Assessee. I also caution the Assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer shall be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 23/01/2025.