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Facts
The assessee filed an appeal against an ex-parte order passed by the CIT(A) confirming an addition of Rs. 79,56,600/- on account of unexplained cash deposits. The assessee failed to appear before the AO and CIT(A) and provide explanations.
Held
The Tribunal held that while the assessee was negligent, the principles of natural justice require an opportunity of being heard. Therefore, the matter is restored to the AO for fresh adjudication.
Key Issues
Whether the appellate proceedings and assessment order passed ex-parte without providing a reasonable opportunity to the assessee are valid? Whether the addition made on account of unexplained cash deposits is justified?
Sections Cited
144, 69A, 234A, 234B, 142(1), 115BBE
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 34/JP/2024
ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 13-12-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC)/CIT(A) ] for the assessment year 2017-18 raising therein following grounds of appeal. ‘’1.The ld. CIT (Appeals), NFAC, Delhi has grossly erred in facts and in law in completing the appellate proceedings ex parte by confirming the ex parte assessment proceedings u/s 144 of the IT Act, 1961, whereas while completing the assessment, the AO has not provided the reasonable opportunity of being heard to the assessee to explain his case. therefore the action of the Ld. CIT (Appeals), NFAC, HIRA VS ITO, WARD -DAUSA Delhi is unwarranted, against the principles of natural justice, unjustified & bad in law as per the provisions of act and the order so passed is bad in law is liable to be quashed.
1. 2. That the Ld. CIT (Appeals), NFAC, Delhi has grossly erred in law as well as on fact of the case in confirming the addition made by the AO amounting to Rs. 79,56,600/- on account of alleged unaccounted & unexplained cash deposited in OHDN into the bank account during demonetization period and treated the same as unexplained investment Uis 69A of the IT Act, 1961. Therefore, the action of the Ld. CIT (Appeals), NFAC, Delhi is erroneous and bad in law as per the provisions of act and is liable to be deleted.
2.1 During the course of hearing, none appeared on behalf of the assessee to contest the case before ITAT in spite of sending notices to the known address of the assessee. Hence, the Bench decided to dispose of the appeal ex-parte based on the materials available on record. 3.1 Apropos to the grounds of appeal of the assessee, it is noticed that the ld. CIT(A) passed an ex-parte order as the assessee had failed to comply with various the notices sent to the assessee and thus the ld.CIT(A) dismissed the appeal of the assessee by observing at para 11 to 13 of his order as under:- ‘’11……..In view of the fact that the appellant failed to comply with the various notices issued by the AO and also applying the ratio laid down by the Hon'ble Kerala High Court in the case of Thyagarajan Parameswaran Vs ITO (Supra), the claim of the appellant that the AO passed the assessment order without providing reasonable opportunity to assessee to explain its case is rejected. Accordingly, ground No.1 is dismissed.
HIRA VS ITO, WARD -DAUSA 12 Ground no.2 is against the addition of Rs.79,56,600/- on account of unaccounted and unexplained cash deposited in the bank account u/s 69A of the Act. The appellant failed to provide any material contrary to the findings of the AO and hence, the AO's action cannot be faulted with and hence upheld. Accordingly, ground No.2 is dismissed.
Ground no. 3 is against charging of interest u/s 2344/234B of the Act. Since. charging of such interest being consequential in nature, the same requires no separate adjudication. Accordingly, ground No. 3 is dismissed.’’ 3.2 During the course of hearing, the ld. DR supported the order of the ld.CIT (A). 3.3 The Bench heard the ld. DR and perused the materials available on record. In this case, it is noted that the AO vide assessment order dated 30-10-2019 made the addition of Rs.79,56,600/- in the hands of the assessee as the assessee failed to give any explanation about the nature and source of cash deposits and thus the AO made the addition by observing at para 16 of his order:- ‘’16. The assessee has made cash deposits amounting to Rs. 79,56,500 (Table 4) appearing in the Bank Account of the assessee in the FY 2016-17 relevant to AY 2017-18 remained unexplained. The assessee has not filed ITR, not declared its true income and has not paid taxes due thereon. The assessee has not responded to notices u/s 142(1) issued during E- assessment proceedings (Table 2). The assessee failed to give any explanation about the nature and source of cash deposits, hence the value of Credit entries, including Cash deposits, appearing in the Bank Account as tabulated in the body of the Order (Table 4) is deemed as unexplained money u/s 69A of the Income Tax Act, 1961 and added to the Total Income of the In first appeal, the ld. CIT(A) has passed an ex-parte order as assessee failed to provide any material contrary to the findings of the AO and he confirmed the addition of Rs.79,56,600/- u/s 69A of the Act made by the AO. From the records, it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 3.4 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or HIRA VS ITO, WARD -DAUSA expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 4.0 In the result, the appeal of the assesee is allowed for statistical purposes Order pronounced in the open court on 30 /09/2025. Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 30 /09/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Hira, Dausa 1. 2. izR;FkhZ@ The Respondent- The ITO, Ward - Dausa 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No. 34/JP/2024) vkns'kkuqlkj@ By order,
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