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Facts
The assessee, an LLP, deposited Rs. 5.78 crore cash in its bank account. The AO reopened the assessment under Section 147 as no return of income was filed and no response was given to Section 148 notices, treating the cash deposits as unexplained income. The CIT(A) dismissed the assessee's appeal ex parte and upheld the AO's order due to the assessee's non-compliance.
Held
The Tribunal acknowledged the AO's valid jurisdiction given no return of income was filed. However, considering the additional evidence submitted by the assessee under Rule 29, the Tribunal decided that the merits of the case required fresh consideration. The matter was restored to the file of the AO for re-examination, with a direction to afford the assessee a meaningful opportunity of being heard.
Key Issues
Whether the AO had valid jurisdiction to reopen assessment under Section 147/148 in the absence of a return of income; proper treatment of unexplained cash deposits; validity of ex-parte dismissal by CIT(A); and the admissibility of additional evidence at the Tribunal stage.
Sections Cited
147, 139(1), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
O R D E R
Per Prakash Chand Yadav, JM :
The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 05.11.2024, having DIN & Order No.ITBA/NFAC/S/250/2024- 25/1070108855(1) and relates to the assessment year 2018- 2019.
The brief facts of the case as coming out from the orders of the authorities below are that the assessee is a limited liability partnership firm and has deposited an amount of . JHL Trading Limited Liability Partnership. Rs.5,78,00,745 in its bank account via cash. On the basis for this information, the case of the assessee was reopened u/s.147 of the Act, and thereafter, several notices were issued to the assessee, as evident from page 2 of the assessment order. However, no-one appeared from the side of the assessee and because of this non-compliance, the AO has added the entire cash deposits as unexplained money to the income of the assessee. It is pertinent to note here that the assessee has neither filed the return of income u/s.139(1) of the Act or in respect of the notices issued u/s.148.
Aggrieved with the order of the AO, the assessee preferred an appeal before the CIT(A). Office of the CIT(A) issued three notices to the assessee via ITBA Portal at the registered email id of the assessee-firm. These notices remained un-complied with and hence the CIT(A) dismissed the appeal of the assessee ex parte and affirmed the order of the AO. The CIT(A) also affirmed the jurisdiction of the AO u/s.147 r.w.s. 148 of the Act.
Aggrieved with the order of the CIT(A), the assessee has come up in appeal before us. At the outset, the learned Counsel for the assessee argued that the assessee has not received any notice of hearing from the office of the CIT(A), otherwise the assessee would be persuaded the matter diligently before the CIT(A).
The learned CIT-DR relied upon the orders of the authorities below.
. JHL Trading Limited Liability Partnership.
After considering the rival submissions, it is observed that it is a case where no return of income has been filed by the assessee but assessee has deposited cash of Rs.5,78,00,745. Before us, the assessee has filed additional evidence explaining the source of cash with an application under Rule 29 praying for admission of additional evidence. Besides this, the assessee has also raised additional grounds challenging the jurisdiction of the AO u/s.147 r.w.s. 148 of the Act. So far as the challenge to the jurisdiction of the AO by way of additional is concerned, we are of the view that since there was no return of income filed by the assessee, the AO was correct in assuming the jurisdiction over the case of the assessee. So far as the merits of the case are concerned, we are of the view that the matter requires fresh consideration at the end of the AO in the light of the voluminous evidences filed by the assessee before us. Therefore, in the interest of justice, we restore this matter to the file of the AO for examining afresh. Needless to say, the AO shall afford meaningful opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 26th day of May, 2025.