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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE
This appeal is filed by the Assessee against the order dated 30.05.2019 passed by the CIT(A)-3, Ahmedabad for the Assessment Year 2016-17.
The assessee has raised the following grounds of appeal :-
“I. Inadequate opportunity of hearing given by Ld. CIT(A) and passing of ex-parte appellate order in a hasty/hurried manner
The Ld. CTT(A) has grievously failed to properly appreciate and consider the fact that the appellant had responded to the first notice of hearing dated 19/02/2019 seeking adjournment and thereafter in response to the last notice issued by him dated 13/05/2019 was received only 2 days prior to the date of hearing and that also being a weekend and hence the A.R. had personally attended before the Id. C1T(A) on Monday 27/05/2019 and requested him to grant another opportunity since the appellant was out of station. The Id. CFT(A) nevertheless without considering the said request proceeded to pass an ex-parte order dismissing the appeal. The CTT(A)'s order thus requires to be set-aside for decision afresh.
Page 2 of 4 II. Addition on account of unexplained credit/deposit in Bank Account Rs.31,00,716 [Tax effect Rs.14,34,423/-]
1. The Ld. CIT(A) has erred in law and on facts in confirming the addition of Rs.31,00,716/- without proper consideration and appreciation of the facts of the case and more particularly the fact that the AO was not justified in mechanically making the addition of the entire deposits [comprising of cheque, cash and even bank interest] without verification of the source and particulars thereof from the bank, which could have been easily available. That since the entire deposits in the bank account being business receipts, the AO was not justified in treating the same as unexplained credit/deposit. The appellate order thus requires to be set- aside for either to the file of the AO for verification or to the file of the Id. CIT(A) for decision afresh on verification of the details which will be furnished before him.
2. The Ld. CIT(A) has failed to appreciate the fact that the amounts deposited in the bank account including cash and cheque pertains to business receipts and was verifiable from the bank itself without prejudice to the fact that the appellant could not furnish the details due to unavoidable circumstances at his end. The appellant also contends that the said receipts deposited in the bank account having already been considered for arriving at the income shown in the return of income, the question of treating the entire deposits in the bank account as unexplained in a mechanical manner is wholly unjustified and bad in law.
In view of the above, the addition of Rs.31,00,716/- on account of unexplained credits in bank account requires to be deleted.”
Return of income was filed on 06.01.2018 showing total income of Rs.2,94,450/-. The return was duly processed under section 143(1) of the Income Tax Act, 1961 and the case was selected for limited scrutiny under CASS with reason, cash deposit during the demonetisation period was not explained. Accordingly, notice under Section 143(2) of the Act was issued on 21.09.2018 and thereafter notice under Section 142(1) read with Section 129 of the Act was issued along with questionnaire. In response to the said notices, the assessee could not file any reply/submissions. The Assessing Officer vide order dated 04.12.2018 passed under Section 143(3) made addition of Rs.31,00,716/- related to unexplained credit/deposit in bank account and treated the same as total income.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
Page 3 of 4 5. During the hearing none appeared on behalf of the assessee. Several notices were issued to the assessee wherein the acknowledgement card has been received by the Registry but none appeared before the Tribunal till date. There is a delay of 764 days in filing the appeal before the Tribunal. The assessee filed affidavit stating that the assessee was in custody for around 15 months and was released on bail vide order dated 23.04.2021 by the Hon’ble Gujarat High Court (Special Criminal Application No.156 of 2021). Therefore, there was a genuine reason for delay in filing appeal before the Tribunal as in between the details of filing in a subsequent forum was not possible on the part of the assessee. Therefore, the delay in filing the present appeal is condoned, but we are proceeding on merits of the case as the assessee despite giving notices has not appeared before either of the Authorities i.e. Assessing Officer or the CIT(A) due to the genuine reasons. It will be appropriate to remand back the issues contested before the CIT(A) to be adjudicated properly after giving hearing to the assessee as the CIT(A) has passed ex-parte order. Needless to say the assessee be given opportunity of hearing by following the principles of natural justice. Appeal of the assessee is partly allowed for statistical purpose.
In the result, appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open Court on this 30th day of November, 2022.