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Facts
The assessee filed an appeal against the CIT(A)'s order confirming an addition of Rs. 13,57,550/- made by the AO on account of unexplained cash deposit. The assessee claimed to be a small scrap trader but failed to provide evidence.
Held
The Tribunal noted that the assessee remained ex-parte before the lower authorities and did not provide necessary evidence. However, to decide the matter on merits, the appeal was allowed and the case was restored to the AO for fresh adjudication.
Key Issues
Whether the addition made on account of unexplained cash deposit is justified, and whether the assessee should be granted another opportunity to present evidence.
Sections Cited
147, 144, 69A, 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC’’ JAIPUR
fu/kZkj.ko"kZ@AssessmentYears : 2011-12 Shri Fayyaz Ahmad cuke The ITO, 22, Niazampur, Tauru, Gurgaon Vs. Ward-Bhiwadi Haryana - 122105 Alwar LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AIOPA 8272 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Priyam Agarwal, Advocate Shri Shubhendra Singh Deep, Advocate jktLo dh vksjls@Revenue by : Shri Gautam Singh Choudhary, JCIT -DR a lquokbZ dh rkjh[k@Date of Hearing : 25/06/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 30/06 /2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The assessee has filed an appeal against the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi dated 16-03-2025 [hereinafter referred as “(CIT(A)/NFAC” ] for the assessment years 2011-12in the matter of Section 147 r.w.s. 144 of the Income Tax Act, 1961 and thus raising therein following ground of appeal:-
FAYYAZ AHMAD VSVS ITO, WARD -BHIWADI ‘’1. Under the facts and circumstances of the case and in law, the order passed by Ld. AO is vaid ab initio as the same has been passed without quoting DIN and PAN on the assessment order 2 Under the facts and circumstances of the case and in law, the Learned CIT(A) has erred in passing the ex-parte order as no notice has been received by the assessee for hearing 3. Under the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming the addition of Rs. 13,57,550/-on account of cash deposited by assessee without considering the submission of the assessere attached at the time of filing of appeal.
Under the facts and circumstances of the case and in law, the Learned CITIA) ha refuted the contention that the assessee is not a small scrap trader, which is erroneous 2.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has given multiple notices to the assessee as mentioned at para 5.0 of his order but the assessee had not responded to the notices and thus he disposed off the appeal on the basis of the material available on record. The crux of the issue in this appeal is that the ld. CIT(A) has confirmed the addition of Rs.13,57,550/- u/s 69A by observing as under:- ‘’6.5. Ground no. 4 relates to the addition of Rs. 13,57,550/- u/s 69A. The appellant has not disputed that the bank account in question belonged to him. Nor has he disputed that there was cash deposit of Rs. 13,57,550/- in this bank account. In the statement of facts, the appellant has stated that he was a small scrap trader. However no evidence of this has been filed, either before the AO or during the present appeal proceedings. Hence the cash deposited in the bank account represents unexplained money and the same is taxable u/s 69A. The addition of Rs. 13,57,550/- u/s 69A is hereby confirmed and ground no. 4 is dismissed.
FAYYAZ AHMAD VSVS ITO, WARD -BHIWADI 2.2 During the course of hearing, the ld. AR of the assessee prayed the assessee may be provided one more opportunity to adduce the details / documents as to the addition made by the AO amounting to Rs.13,57,550/- as the assessee had not received any communication from the Department to furnish the evidence / submission before the AO. 2.3 On the other hand, the ld. DR supported the orders of the lower authorities. 2.4 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the AO made an addition of Rs.13,5750/- by observing as under:- ‘’1…..Further a notice u/s 142(1) dated 14-09-2018 was issued to the assessee on the address available for furnishing requisite details/ information wherein hearing was fixed on 26-09-2018 but again no compliance was made by the assessee.
Since no compliance was made by the assessee, a final show cause notice u/s 144 of the Act dated 30.10.2018, fixing the date of hearing on 16.11.2018 alongwith notice u/s 142(1) of Act was issued to the assessee to furnish the reasons, why the cash deposit in the saving bank account amounting to Rs.13,57,550/- should not treated as unexplained cash deposit in bank u/s 69A of the I.T. Act, 1961 but the same was returned back undelivered by postal authority. Therefore, the same was served by affixture on the address available of assessee.
Since, no communication of show cause notice has been received till date which only substantiate that the assessee has nothing to say in this regard. The assessment is time barring and sufficient opportunities have been provided. Hence, there is no option but to complete the assessment ex-parte u/s 144 of the FAYYAZ AHMAD VSVS ITO, WARD -BHIWADI IT Act on the basis of material/information available on record. Therefore, in the absence of any explanation /evidences filed by assessee, the source of cash deposited in the saving bank amounting to Rs. 13,57,550/- remain unexplained and the same is hereby added to the total Income of the assessee as unexplained cash deposit u/s 69A of the I.T. Act, 1961.
It is also pertinent to note that the assessee has refuted the ground no. 4 wherein it is mentioned that the assessee is not a small scrap trader which is erroneous.On this point, the Bench noted that the assesee himself has mentioned the fact at Form No. 35 in para 11 which is reproduced as under:- ‘’Assessee is a small scrap trader. The Learned AO added whole the turnover deposited in bank without considering the withdrawal from Bank. Neither any notice nor any information received till26-03-2019 to the assessee. AO passes an order u/s 144 and create heavy demand. Hence, this appeal.’’ This contention raised by the assessee in the ground of appeal
No.
4. (supra) is not justified. The Bench further noticed that in first appeal the ld. CIT(A) has confirmed the action of the AO as the assessee had not filed any contrary documents against the order of the AO in spite of multiple opportunities to adduce the details of the case. Thus he observed that the assessee has neither filed any documents before the AO nor before him and he treated the cash deposited amounting to Rs.13,57,550/- in the bank FAYYAZ AHMAD VSVS ITO, WARD -BHIWADI account as unexplained money u/s 69A of the Act. From the available records, it is noticed 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, we are 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. 2.5 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.
FAYYAZ AHMAD VSVS ITO, WARD -BHIWADI 3.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 30/06/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 30 /06 /2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Fayyaz Ahmad, Gurgaon 2. izR;FkhZ@The Respondent- ITO, Ward- Bhiwadi. 3. vk;djvk;qDr@CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZQkbZy@Guard File { } vkns'kkuqlkj@By order
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