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Facts
The assessee, an agriculturist, was found to have deposited Rs. 13,29,000/- in cash in Oriental Bank of Commerce. The assessee did not file a return of income, and subsequent notices were returned unserved. The Assessing Officer treated the deposit as unexplained income under Section 69A of the Income Tax Act, 1961.
Held
The Tribunal noted that the assessee was ex-parte before the lower authorities. To ensure a decision on merits, the matter was restored to the file of the Assessing Officer to provide one more opportunity of hearing to the assessee.
Key Issues
Whether the addition of Rs. 13,29,000/- as unexplained cash deposit is justified without giving the assessee an opportunity to explain, and if the assessment proceedings were valid given the ex-parte nature.
Sections Cited
69A, 147, 148, 142(1), 144, 133(6), 271(1)(c), 143(2)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.1416/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2011-12 Shri Madan Singh cuke Income Tax Officer, S-11, Bidawat Marg Vs. Ward -4(4), Jaipur Ambabari, Jaipur -302 012 LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AOSPS 7765 Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Neeraj Rathore, C.A. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 02/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 22/04/2025 vkns'k@ ORDER
PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of the ld. CIT(A) dated 01-10-2024, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2011-12 raising therein following grounds of appeal. ‘1. That the ld. CIT(A) has erred in making addition to income on account of unexplained money u/s 69A amounting to Rs.13,29,000/-.
2. That the order passed by the AO is bad in law as well as on facts.’’
2.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT, NFAC, Delhi has partly allowed the appeal of the assessee by giving following observations. 6.1.2. Facts of the Case from the Assessment Order As per ITS information generated from system it was noticed that the appellant had deposited in cash in Oriental Bank of Commerce of Rs. 13,29,000/- during the year under consideration. As per AST system no return of income had been filed by the appellant for the year under consideration The information was pushed on under NMS (Non-Filer Monitoring System) that the appellant had deposit in cash in Oriental Bank of Commerce of Rs. 13,29,000/-during the year under consideration. Further to verify the issue, after getting necessary approval from the worthy Pr. CIT- II, Jaipur, notice u/s 133(6) was issued to the appellant to furnish the necessary details/ information mentioned therein. However, no compliance had been made by the appellant. Such information was not verifiable as the appellant had not filed reply of NMS letter as well as information called for u/s 13365) of IT Act, 1961 Therefore, believing that income to the tune of Rs. 13,29,000/- had escaped assessment and accordingly, the case was reopened by invoking the provisions of Section 147 of the 1.T. Act, 1961 after recording the reasons for doing so. Notice u/s 148 of the IT Act was issued to the appellant on 29/03/2018 and sent through registered post on 29.03.2018. The said notice was returned back in the office with the postal remarks "No such person on address" was placed on record. Thereafter, notice u/s 142(1) of the IT. Act had been issued to the appellant on 25/07/2018/for filing of return against u/s 147 before 01/08/2018. The said notice was returned back to this office with the postal remarks "No such person on address" which was placed on record In this regard, a show cause notice u/s 144 along with notice u/s 142(1) of the IT Act, 1961 No. 1856 Dated 16/10/2018 addressed to the appellant had been issued for filing of return of income before 22/10/2018, in response to this notice neither appellant attended the office nor filed written submission Therefore, the undisclosed cash deposits of Rs. 13,29,000/- was not allowed to the appellant and to add the above in the return of income to the assessee for the AY 2011-12. Thus, the Ld. AO was left with no other alternative but to treat as cash deposited by the appellant as unexplained money u/s 60A of the IT Act, 1901 and be added to the total income of the appellant 6.1.3. The Submission of the appellant, Assessment Order, Facts of the Case and law in this regard is considered. As per the submission, the appellant had submitted that he is an agriculturist and has no other income other than agriculture. During the year, return was filed showing total income at Rs. 54 and agriculture income at Rs. 4,00,000/- The appellant has pleaded that he has raised objections with regard to the issue of notice u/s 148. He also submitted that the objections were not disposed off and hence, the assessment was illegal and bad in law. He placed on two decisions GKN Driveshafts India Ltd. Vs. ITO (2003) 259 ITR
19. (SC) and M/s K.C. Mercantile Ltd. Vs. DCIT DBIT Appeal No. 292/2016 (Raj) (HC). As per information received from ITO, Ward 4(4), Jaipur the objections raised by the appellant were disposed off vide letter dated 16.10.2018 vide F. No. ITO/WVd-4(4)/JPR/2018-19/1856. Hence, the plea of the appellant that the objections have not been disposed off and therefore the assessment framed is illegal is not acceptable
6.1.4. The appellant has pleaded that he had filed return in response to 148 notice which was received by CPC, Bengaluru on 03.10.2018. The Ld. AO vide his letter disposing off the objections raised u/s 148 has clearly noted that as per the AST System as on 16.10.2018 no return of income was filed by the appellant. The Ld. AO issued notice u/s 148 on 29.03.2018. And this notice returned back to the office with the remarks "no such person on address. The appellant filed the return of income on 03.10.2018 which is much later than the notice issued u/s 148, hence the return filed by the appellant was invalid. Thus, the plea of the appellant that 143(2) notice was to be issued by the Ld. AO in the prescribed time limit is not acceptable. As the facts of the case are completely different from those from the cases quoted by the appellant hence, they are held to be not applicable in appellant's case. 6.1.5. The next plea of the appellant is that entries Rs. 4,14,000/- on 04.08.2010 and Rs. 2,50,500/- on 14.10.2010 have been repeated. The same information was uploaded by Shri Vinod Kumar, on 10.01.2012 and also by Shri Nimat Ullah on 12.06.2012. The appellant is of the view is that the information can be verified from the ITS report. The submission of the appellant is considered and it is seen that only one set of transactions that is Rs. 4,14,000/- on 05.08.2010 and Rs. 2,50,500/- on 15.12.2010. From the AIS Report, it is clear that the transactions are on different dates i.e. Rs.
4,14,000/- on 04.08.2010, Rs. 2,50,500/- on 14.12.2010, Rs. 4,14,000/- on 08.02.2011 and Rs. 2,50,500/- on 04.10.2011. Since it is not clear whether the credit has been made in some other bank, hence the Ld. AO is directed to verify whether the same entry has been repeated twice, and in case the Ld. AO finds so then the necessary relief should be given to the appellant. But as the above income should have been offered in the return of income which the appellant has failed to declare in his return of income. 6.1.6. The appellant has pleaded that the appellant is an agriculturist and, in this regard, he has submitted the Jamabandi, in which it is seen that he is labelled as the farmer for various Khasara numbers. The appellant has pleaded that he had deposited an amount of Rs. 6,64,500/- out of the current year's agriculture income. In this regard, the appellant has also submitted rough cashbook. The submission of the appellant is considered and it is seen that though the appellant has made certain cashbook but since it is not corroborated with further supporting evidence such as bills and vouchers etc. hence, the plea of the appellant that Rs. 6,64,500/- deposited in the Bank Account is out of the current year's income is not acceptable. 6.1.7. In view of the detailed discussion of facts and circumstances, the order passed by the Ld. AO is confirmed, subject to the verification that there is no duplicate entry in the ITS details/ AIS Report, which is to be verified by the Ld. AO. In case the Ld. AO comes to the conclusion that it is duplicate entry then necessary relief of deleting the duplicate entry may be given to the appellant. Thus this ground is partly allowed.’’
2.2 During the course of hearing, the ld. AR of the assessee submitted that the lower authorities are not justified in confirming the addition to the tune of Rs.13.29,000/- for which the ld. AR of the assessee has filed the detailed written submission praying therein that the assessee had deposited only Rs.6,64,500/- in the bank account out of the current years agriculture income of Rs.4,00,000/- not disputed by the AO and out of available cash in hand and earlier years income as per the cash flow statement and as such the addition so made by the AO needs to be deleted. The submissions as advanced by the ld. AR of the assessee is reproduced as under:- ‘’SUBMISSION
That the appeal is filed before your honour and the only ground of appeal is asunder:
Theld.AOerredintreatingthecashdepositedinbankaccountasunexplainedandadded 13,29,000.00 u/s 69A, of Income tax act 1961. Facts That the facts of the case are asunder:
1. 1. That the petitioner is assessed to income tax with ITO Ward 4(4) Jaipur. The assesse is an agriculturist having no other income other than Agriculture income as such no ITR was filed as the assesse was not having any Taxable Income.
2. That the assesse is owning 6.1990 Hector Agriculture Land in Ganganagar Dist. Rajasthan, which is a fertile canal irrigated area.
3. Noticeu/s148oftheI.T.Actwasissuedon25.07.2018.
4. Assesseefiledreturninresponsetonoticeu/s148on27.09.2018.ItwasreceivedatCPC Bangaloreon3.10.2018.
5. The return was filed showing Total income Rs. 54 only (being interest on saving bank) and Agriculture Income amounting to Rs. 4,00,000.00.
6. The AO completed the assessment u/s 147/148/144 of I.T. Act 1961, and added a sum of Rs. 13,29,000/- u/s 69Aof Income Tax Act 1961 and computed the income as under: Particulars AmountRs. Totalincomedeclaredbyassesse NIL Add:Additionmadeona/cofUnexplainedmoneyu/s69A 13,29,000.00 TotalIncome 13,29,000.00 7. Aggrieved against the order passed by the AO assesse filed appeal before the CIT Appeals NFAC .
8. CIT (A) NFAC passed the order and observed as under: 6.1.6. The appellant has pleaded that the appellant is an agriculturist and, in this regard, he has submitted the Jamabandi, in which it is seen that he is labelled as the farmer for various Khasara numbers. The appellant has pleaded that he had deposited an amount of Rs. 6,64,500/- out of the current year’s agriculture income. In this regard, the appellant has also submitted rough cashbook. The submission of the appellant is considered and it is seen that though the appellant has made certain cashbook but since it is not corroborated with further supporting evidence such as bills and vouchers etc. hence, the plea of the appellant that Rs. 6,64,500/- deposited in the Bank Account is out of the current year’s income is not acceptable. 6.1.7. In view of the detailed discussion of facts and circumstances, the order passed by the Ld. AO is confirmed ,subject to the verification that there is no duplicate entry in the ITS details/ AIS Report, which is to be verified by the Ld. AO. In case the Ld. AO comes to the conclusion that it is duplicate entry then necessary relief of deleting the duplicate entry may be given to the appellant. Thus, this ground is partly allowed.
Aggrieved against the order of CIT (A) NFAC the assesse is in Appeal before your goodself. ThatwehavetosubmitasunderbeforeyourHonours’ 1. That the petitioner is assessed to income tax with ITO Ward 4(4) Jaipur. The assesse is an agriculturist having no other income other than Agriculture income as such no ITR was filed as the assesse was not having any Taxable Income.
Notice u/s 148 of the I.T. Act was issued on 25.07.2018. Assessee filed return in response to notice u/s 148 on 27.09.2018. Which was received at CPC Banglore on 3.10.2018.
The return was filed showing Total income Rs. 54 only (being interest on saving bank) and Agriculture Income amounting to Rs. 4,00,000.00.
ThatReasonsforreopeningarereproducedasunder: “As per AST System (AIR Report), it has been found that the above mentioned person did not file return of income for A.Y. 2011-12. Later on, it was noticed that the assessee has deposited cash in Oriental Bank of Commerce of Rs. 13,29,000/-. In absence of the return of income, it is noticed that the cash deposited in Oriental Bank of Commerce could not be verified. Looking to the facts mentioned above, I have reasons to believe that the income to the extent of Rs. 13,29,000/- has escaped assessment within the meaning of section 147oftheIT Act,1961.Therefore,itis afitcaseto issuenoticeu/s148 oftheITAct,1961.”
The deposit was made in KCC A/c (Kisan Credit Card)Scheme A/c as the assesse is an agriculturist and the main income of the assesse is agriculture only.
That the assesse is owning 6.1990 Hector Agriculture Land in Ganganagar Dist. Rajasthan, which is a fertile canal irrigated area.
7. Copy of bank accountand copy of jamabandi is also enclosed
ORIENTAL BANK OF COMMERCE B/O SRIVIJAINAGAR, SRIGANGANAGAR 38,DHANMANDI,DHANMANDIROAD,VIJAINAGAR P.O.SRIVIJAIN AGAR-335704 RAJASTHAN PHONE BORROWER'SNAMEADDR MADAN SINGH S/O RAGHUNATH NO. ; 01498-230411 ESS SINGH1MLD SBNRSRIVIJAINAGA RRAJASTHAN- 335704 ACCOUNTNO. PRESENTSANCTIONLIMIT RS.14,60,000.00 DRAWINGPOWER RS.0.00 7.00%p.a. PRESENT RATE OF INTT. BAL. AS ON 30.05.17 RS.0.00 STATEMENTOFACCOUNTFROM 01.04.2008TO30.05.2017 Trans.Date chequeno. particulars debit credit outstanding 40000 10.04.2008 223030 CashWithdrawal 390167 02.05.2008 Tr. 390000 167 2301 07.05.2008 NAIS 2468 140000 13.06.2008 SBA/c 142468 7683 30.06.2008 Intt.W.e.f.14.01.08-30.06.08 150151 15.07.2008 NAIS 2301 147850 50000 24.07.2008 223032 CashWithdrawal 197850 112.36 26.07.2008 PassBookCharges 198962.36 50000 22.08.2008 223033 CashWithdrawal 247962.36 25000 23.09.2008 223034 CashWithdrawal 272962.36 20000 26.10.2008 223035 CashWithdrawal 292962.36 80000 07.11.2008 223036 CashWithdrawal 372962.36 80 07.11.2008 TaxonINR80000on07.01.08 373042.36 15.11.2008 cashdeposit 100000 273042.36 16437 31.12.2008 intt.Wef01.07.08-30.06.09 289479.36 05.01.2009 subv 3588 285891.36 2533 31.01.2009 AICI 288424.36 31.01.2009 cashdeposit 290000 1575.64 2901 31.01.2009 Intt.Wef01.01.09-31.01.09 1325.36 300000 02.02.2009 223037 CashWithdrawal 301375.36
14419 29.06.2009 intt.Wef01.02.09-31.12.09 3016544.36 03.07.2009 SUBMarch 6327 310217.36 30.07.2009 cashdeposit 310000 217.36 47 30.07.2009 cashhandlingcharges 264.36 300000 01.08.2009 223038 CashWithdrawal 300264.36 21.08.2009 subjune 3328 296936.36 100000 01.10.2009 223039 CashWithdrawal 396936.36 26.12.2009 cashdeposit 396000 936.36 19324 31.12.2009 intt.Wef01.07.09-31.12.09 20260.36 01.01.2010 subv09 2197 18063.36 794 08.01.2010 IC 18857.36 380000 20.01.2010 223040 CashWithdrawal 398857.36 1411 29.01.2010 AICI 400268.36 20539 28.06.2010 intt.Wef01.01.10-30.06.10 420807.36 29.06.2010 SUBVmarch10 5810 414997.36 414000 04.08.2010 cashdeposit 997.36 27 05.08.2010 cashhandlingcharges 1024.36 398000 06.08.2010 223041 CashWithdrawal 399024.36 20.08.2010 cashdeposit 175000 224024.36 20 20.08.2010 cashhandlingcharges 224044.36 23.09.2010 SUBPQ 1496 222548.36 23.09.2010 SUBPSA 1870 220678.36 23.09.2010 SUBADD 1208 219470.36 180000 18.10.2010 223043 CashWithdrawal 399470.36 397 19.10.2010 IChalfyear 399867.36 26.10.2010 cashdeposit 180000 219867.36 9 27.10.2010 cashhandlingcharges 219876.36 15000 27.10.2010 223044 CashWithdrawal 234876.36 15449 14.12.2010 intt.Wef01.07.10-14.12.10 250325.36 250500 14.12.2010 cashdeposit 174.64 27 15.12.2010 cashhandlingcharges 147.64 100000 10.01.2011 223045 CashWithdrawal 99852.36 13.01.2011 SUBVENTIONSEP 390 99462.36 SECREFICESEP 910 98552.36 581 97971.36
ThattheAISreportoftheassesseissubmittedasunder:
INCOME TAX DEPARTMENTINDIVIDUALTRANSACTIONSTAT EMENT FINANCIALYEAR2010-11 PAN:AOOSPS7765Q NAMEASPERAIS:MADANSINGH COUNT AMOUNT SUMMARY AIR 0 0 CIB 4 1329000 26AS 0 0 OLTAS 0 0 NOTE:ForPennystocktradedataonly25transactionsarebeingdisplayedinPDFreport.Toviewallthetransactionsgenerateexcelreport.CIB compulsory code transactions Transaction code : 410 DepositincashaggregatingRs.2,00,000ormorewithabankingcompanyduringanyondayTAN of Filer: DELO00080D FilerName:DPKAKKAR
S.N.Name&Add. Trans.Amt.Trans,Dt.Jt.TxnPartyDepo.A/cNo.Trans.RemarksUploadDetails 1 Madan Singh 414000 04.08.10 1 6.6511E+12 Uploaded byVinod kr. On S/o Raghunath 10 Jan 12 New Delhi 1BLD@@@@@ 335704 Madan Singh 250500 14.12.10 1 6.6511E+12 Uploaded byVinod kr. On 2 S/o Raghunath 10 Jan 12New Delhi 1BLD@@@@@ 335704 Transaction code : 410 Deposit in cash aggregating Rs. 2,00,000 or more with a banking company during any on day TANofFiler:JDHO00867GFilerName:ORIENTALBANKOFCOMMERCE S.N.Name&Add. Trans.Amt.Trans,Dt.Jt.TxnPartyDepo.A/cNo.Trans.Remarks UploadDetails 1 Madan Singh 414000 08.02.11 1 6.6511E+12Old dhanmandi Uploaded byNimatUllah S/o Raghunath Sriganganagar quareshee on 12 May,12 1BLD@@@@@ ITO CIB Jodhpur , 335704 DIT(I&C)Jaipur 2 Madan Singh 250500 04.10.11 1 6.6511E+12Old dhanmandi Uploaded byNimatUllah S/o Raghunath Sriganganagar quareshee on12 May,12, 1BLD@@@@@ ITO CIB Jodhpur 335704 DIT(I&C)Jaipur
The explanation of the entries is asunder:
S. Date Amount Sources No 1 04.08.2010 4,14,000/- Depositedoutofearliercashwithdrawals/agricultureIncome 2 14.12.2010 2,50,500/- Depositedoutofearliercashwithdrawals/agricultureIncome 3 08.02.2011 4,14,000/- In the AST system (ITS Report) the date is wrongly mentioned. No such transaction.(DUPLICATE ENTRY) 4 04.10.2010 2,50,500/- IntheASTsystem(ITSReport)thedateiswronglymentioned. Nosuchtransaction.(DUPLICATEENTRY)
The basis of addition by the AO was ITS Report. The assesse confirms the cash deposit of Rs. 4,14,000/- on 04.08.2010 and 2,50,000/- on 14.12.2010. The entries on 08.02.2011 amounting to Rs. 4,14,000/- and on 04.10.2011 amounting to Rs. 2,50,000/- is wrongly mentioned. There is no such transaction. The same fact can also be verified from the bank account of the assesse where only two entries dated 4.8.10 and 14.12.10 are available in bank account. As such only cash amounting the Rs, 6,64,500/- (4,14,000+2,50,500)was deposited in bank on the mentioned dates. Assessee is an Agriculturist andthe above account is the only main bank account.
Thesourcesofthecashdepositisoutoftheavailablecashbalancewiththeassesse.Thecashflow statement is produced as under MadanSingh CashBook AY2009-2010 Dr. Cr. Date Particulars Amount Date Particulars Amount 01/04/2008 ToOpeningBalance 0 30/04/2008 ByDrawing 10000 10/04/2008 To Bank 40000 30/05/2008 ByDrawing 10000 30/05/2008 ToAgricultureIncome 100000 30/06/2008 ByDrawing 10000 24/07/2008 ToBank 50000 30/07/2008 ByDrawing 10000 22/08/2008 ToBank 50000 30/08/2008 ByDrawing 10000 23/09/2008 ToBank 25000 30/09/2008 ByDrawing 10000 26/10/2008 ToBank 20000 30/10/2008 ByDrawing 10000 07/11/2008 ToBank 80000 15/11/2008 ByBank 100000 30/11/2008 ToAgricultureIncome 100000 30/11/2008 ByDrawing 10000 02/02/2009 To Bank 300000 30/12/2008 ByDrawing 10000 31/01/2009 ByBank 290000 31/01/2009 ByDrawing 10000
28/02/2009 ByDrawing 10000 31/03/2009 ByDrawing 10000 31/03/2009 ByDrawing 176000 31/03/2009 ByClosingBalance 79000
765000 765000
MadanSingh CashBook AY2010-2011 Dr. Cr. Date Particulars Amount Date Particulars Amount 01/04/2009 ToOpeningBalance 79000 30/04/2009 ByDrawing 12000 30/05/2009 ToAgricultureIncome 150000 30/05/2009 ByDrawing 12000 01/08/2009 ToBank 300000 30/06/2009 ByDrawing 12000 01/10/2009 ToBank 100000 30/07/2009 ByDrawing 12000 30/11/2009 ToAgricultureIncome 125000 30/07/2009 ByBank 310000 20/01/2010 ToBank 380000 30/08/2009 ByDrawing 12000 30/09/2009 ByDrawing 12000 30/10/2009 ByDrawing 12000 30/11/2009 ByDrawing 12000 26/12/2009 ByBank 396000 30/12/2009 ByDrawing 12000 30/01/2010 ByDrawing 12000 28/02/2010 ByDrawing 12000 31/03/2010 ByDrawing 12000 31/03/2010 ByClosingBalance 332000
1134000 1134000 MadanSingh CashBook AY2011-2012 Dr. Cr. Date Particulars Amount Date Particulars Amount 01/04/2010 ToOpeningBalance 332000 30/04/2010 ByDrawing 12000 30/05/2010 ToAgricultureIncome 250000 30/05/2010 ByDrawing 10000 04/08/2010 ToBank 398000 30/06/2010 ByDrawing 10000 20/08/2010 ToBank 180000 30/07/2010 ByDrawing 10000 06/08/2010 ByBank 414000 26/10/2010 ToBank 15000 30/11/2010 ToAgricultureIncome 150000 30/08/2010 ByDrawing 10000 14/12/2010 ToBank 100000 30/09/2010 ByDrawing 10000 18/10/2010 ByBank 175000 27/10/2010 ByBank 180000
30/10/2010 ByDrawing 10000 30/11/2010 ByDrawing 10000 30/12/2010 ByDrawing 10000 10/01/2011 ByBank 250500 31/01/2011 ByDrawing 10000 28/02/2011 ByDrawing 10000 31/03/2011 ByDrawing 10000 31/03/2011 BYClosingBalance 283500 Total 1425000 Total 1425000
The AO while passing the order has not disputed the agriculture income amounting to Rs. 4,00,000/- While calculating the tax he has done as under:
GrossTotalIncome 13,29,054/- AssessedIncome 13,29,050/- AgricultureIncome 4,00,000/- AggregateIncome 17,29,050/- Finally it is submitted that the assesse has deposited only 664500 in the bank account out of the current years agriculture income of Rs. 4,00,000/- not disputed by the AO and out of available cash in hand and earlieryears incomeasper the cash flow statement, assuch the additionsso made by theld. A.O.needs to be deleted and oblige.’’ To support his arguments, the ld. AR of the assessee has filed following documents.
S.N. Particulars Page No. 1. Written submissions 1-7 2. CIT (A), NFAC Order 8-13 3. Order of ITO Ward 4(4), Jaipur 14-18 4. Submission before CIT(A), NFAC 19-28 5. Copy of Jamabandi 29 6. Copy of Bank account 30
Copy of AIS report 31 8. Copy of Computation of Income 32 9. Copy of ITR AY 2011-12 33 2.3 On the other hand, the ld. DR supported the order of the ld. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the as per ITS information generated from system, it was noticed by the Department that the assessee had deposited cash in Oriental Bank of Commerce of Rs.13,29,000/- during the year under consideration. As per AST system , no return of income had been filed by the assessee for the year under consideration. The notice u/s 133(6) of the Act was issued to the assessee to furnish necessary details / information mentioned therein but no compliance was made by the assessee and thus such information was not verifiable being not filed the reply by the assessee of NMS letter as well as information called for u/s 133(6) of the Act. The notice was sent to the assessee through Regd. Post on 29-03-2018 but it was returned back in the office of the Department by the postal authority with postal remarks ‘’No such person on address.’’. Conclusively, the notices sent by the Department returned unserved from the available on record of address of the assessee with the remarks by the postal authority that ‘’No such person address’’. The show cause notice u/s 144 of the Act was issued to assessee.
However, neither asssessee attended the office of the Department nor filed written submission. In such a situation, the AO made an addition of Rs.13,29,000/- in the hands of the assessee by observing as under:- ‘’Therefore the undisclosed cash deposits of Rs. 13,29,000/- is not allowed to the assessee and to add the above in the return of income to the assessee for the AY. 2011-12. Thus, I had left with no other alternative but to complete the case on a total Bank cash deposit made by the assessee Income of Rs. 13,29,000/- treated as unexplained cash deposited and in bank in the hands of the assessee. As the assessee had cash deposited amounting to Rs 13,29,000/-and in absence of the explanation of the assessee, it is not in explainable nature, thus, the cash so deposited by the assessee is treated as unexplained money u/s 69A of the IT Act, 1961 and be added to the total income of the assessee. For this act, penalty proceedings u/s 271(1)(c) of the IT Act, 1961 is initiated. Penalty notice u/s 271(1)(c) of the IT Act, 1961 for this purpose is issued separately. Hence I treat this amount of Rs. 13,29,000/- as unexplained cash u/s 69A of the IT Act, 1961 and an added to the total income tax Act, 1961. Penalty proceeding u/s 271(1)(c) of the LT Act, 1961 for concealing the particulars of income and for furnishing Inaccurate particulars of income are hereby initiated separately.
In first appeal before ld. CIT(A), NFAC, it was noticed that the order of the ld.CIT(A) was ex-parte but based on the documents made available by the assessee before the ld.CIT(A), he partly allowed the appeal of the assessee with following direction to the AO.
‘’6.1.7. In view of the detailed discussion of facts and circumstances, the order passed by the Ld. AO is confirmed, subject to the verification that there is no duplicate entry in the ITS details/ AIS Report, which is to be verified by the Ld. AO. In case the Ld. AO comes to the conclusion that it is duplicate entry then necessary relief of deleting the duplicate entry may be given to the appellant. Thus this ground is partly allowed.’’ From the entire conspectus of the case, it is noticed that the assessee was ex-parte before the lower authorities. 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. 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. 3.0 In the result, the appeal of the assesee is allowed for statistical purposes