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Facts
The assessee had made cash deposits of Rs. 34,76,511/- in a bank account during FY 2012-13 but did not file a return of income for AY 2013-14. Despite multiple notices, the assessee failed to provide explanations or evidence for these deposits. Consequently, the AO made an addition of Rs. 34,76,511/- as unexplained money.
Held
The Tribunal held that while the assessee was lethargic and failed to cooperate with the authorities, the matter should be decided on merits to provide an opportunity of being heard. Therefore, the case was restored to the AO for fresh adjudication.
Key Issues
Whether the reassessment proceedings initiated and the subsequent ex-parte assessment order were justified, especially considering the assessee's non-compliance and claims of illiteracy?
Sections Cited
147, 144, 132(1), 69A, 115BBE, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 895/JP/2025
ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 07-04-2025, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC)/CIT(A) ] for the assessment year 2013-14 raising therein following grounds of appeal. ‘’1. The ld AO erred in law as well as on the facts of the present case in initiating reassessment proceedings u/s 147 of the Income Tax Act, 1961 and ld. CIT(A) erred in sustaining the same and hence the consequent assessment may please be quashed
2. The order passed u/s 144 r/w 147 of the Act is bad in 0 law as well as on the facts of the present case being without jurisdiction and for several other reasons and hence the same is prayed to be quashed SHRI RAMDEV CHOUDHRY VS ITO, WARD 2(2), AJMER 3. Rs.3476511- The ld. AO erred in law as well as on the facts of the present case in making addition of Rs.3476511/- on account of alleged unexplained cash deposited in the bank account and the ld. CIT(A) erred in confirming the same and hence the addition so made is prayed to be deleted 4. Without prejudice to above, the assessee could not attend the proceedings for genuine and bonafide circumstances and therefore, ld. AO and ld. CIT(A) erred in law as well as on the facts of the present case in passing ex parte orders and hence the matter be sent back to the Id. AO for fresh adjudication.’’ 2.1 Brief facts of the case as per information received by the Department are that the assessee had made cash deposits of Rs.34,76,511/- in Bank of Baroda account during F.Y. 2012-13. Further, on verification by the Department, it was noticed that the assessee Shri Ramdev Choudhary (PAN: ADMPC 5414F) had not filed return of income for A.Y. 2013-14 thereby not declaring any income for relevant period. Hence, the sources of the cash deposits of Rs.34,76,511/- remained unexplained by the assessee as per the provisions of the Act. Several notices u/s 132(1) as mentioned by the AO in the assessment order were sent to the assessee but the assessee did not respond to the notices. The case was referred to verification unit on 5-08-2021 and the Verification Unit served the notice to the assessee on 14-08-2021 via speed post which was not complied with by the AO. Finally a show cause notice u/s 144 of the Act was issued to the assesseeon 27-08- 2017 to comply by 13-09-2021 but the assessee failed to submit any response against the show cause notice. Hence, the AO had no option but to pass the SHRI RAMDEV CHOUDHRY VS ITO, WARD 2(2), AJMER assessment order ex-parte u/s 144 of the Act and thus he made addition of Rs.. 34,76,511/- in the hands of the assessee by observing as under:- ‘’3. During the course of assessment proceedings, on the basis of details available with the Department, the assessee has made cash deposits of Rs. 34,76,511/- in Bank of Baroda Account during F.Y. 2012-13. The assessee was granted adequate and sufficient opportunities as discussed above to submit the source of this cash deposit made in his bank account during F.Y. 2012- 13. However, the assessee has failed to submit any reply/documentary evidences in support of the cash deposits made in his account during FY 2012-13 after granting sufficient and reasonable opportunities.
4. In view of the above facts of the case and absence of any compliance made by the assessee, the cash deposits in his bank account remain unexplained. Accordingly, an amount of Rs. 34,76,511/- is treated as unexplained money and brought to tax u/s 69A r.w.s. 115BBE of the Income-tax Act, 1961. The income was detected as a result of re-opening of assessment. Hence, it is clear that the assessee has concealed his income by not voluntarily filing return of income for A.Y 2013-14. Therefore, penalty u/s. 271(1)(c) is initiated for concealment of income.’’ 2.2 In first appeal, the ld. CIT(A) has also passed an ex-parte order as the assessee did not submit any documentary evidence /information to prove his side in spite of providing adequate opportunities of hearing to the asssessee and thus he dismissed the appeal of the assessee by observing as under:- 6.8….. It can be safely presumed that the appellant is not interested in pursuing his appeal. Tehrefore, the undersigned sees no reason to interfere with the orders of the Assessing Officer. Thus, the appeal raised by the Department is dismissed.
SHRI RAMDEV CHOUDHRY VS ITO, WARD 2(2), AJMER 7. Rest all the grounds of appeal are general in nature, therefore, no need to give any specific comments.
8. In result, appeal is dismissed. 2.3 During the course of hearing, the ld. AR prayed that the appeal of the assessee may kindly be restored to the file of the AO for afresh adjudication so that the assessee could advance all the documents before the AO as to the addition made by him. The ld AR also filed an affidavit of the assessee Shri Ramdev Choudhary wherein he deposed that he is an illiterate person and could not understand the notice issued by the Department for the assessment year 2013-14 and also deposed that he did not file the return of income for the assessment year 2013-14 being not assessable. Conclusively, the ld. AR of the assessee prayed that the appeal of the assessee be restored to the file of the AO for afresh adjudication in the interest of equity and justice. To support of his submissions, the ld. AR of the assessee has filed the following documents/ paper book. S.N. Particulars Pages 1. Copy of affidavit in support of appeal 1-2 2. Copies of response screenshot dt. 09-05-2022 and request for 3-4 adjournment 3. Copies of response screenshot dt. 02-04-2025 and request for 5-6 adjournment 4. Copy of Form 26AS for the A Y 2013-14 7-8 5. Copy of Bank statement for the period from01-04-2012 to 31-03- 9-16 2013 6. Copy of Yad dasti Patra (agreement) dt19-04-2012 17
7. Copy of sauda nirast patra (agreement) dt. 20-04-2012 18 2.4 On the other hand, the ld. DR supported the orders of the lower authorities. 2.5 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the AO vide assessment order dated 20-09- 2021 u/s 147 r.w.s. 144 of the Act made addition amounting to Rs.34,76,511/- as unexplained money u/s 69A r.w.s. 115BBE of the Act. In first appeal, the ld CIT(A) has confirmed the action of the AO as the assessee neither pursued the appeal before him nor adduced any documents to counter the addition made by the AO in the assessment order. 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.
SHRI RAMDEV CHOUDHRY VS ITO, WARD 2(2), AJMER 2.6 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 expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 3.0 In the result, the appeal of the assesee is allowed for statistical purposes Order pronounced in the open court on 08/09/2025.
Sd/- Sd/- ¼ xxu Xkks;y ½ ¼MkWa-,l-lhrky{eh½ (GAGAN GOYAL) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08 /09/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Shri Ramdev Choudhary, Ajmer 1. 2. izR;FkhZ@ The Respondent- The ITO, Ward 2(2), Ajmer 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No. 895/JP/2025) vkns'kkuqlkj@ By order,
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