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Facts
The assessee, an individual, failed to file an income tax return for AY 2018-19. Reassessment proceedings were initiated based on information regarding substantial cash deposits and withdrawals from the assessee's bank accounts, which the assessee attributed to lottery ticket sales but failed to substantiate with documentary evidence. Consequently, the Assessing Officer made additions under Section 69A and Section 69C of the Income Tax Act for unexplained money and expenditure.
Held
The CIT(A) dismissed the assessee's appeal due to non-compliance with notices and failure to provide any written submissions or evidence. The Income Tax Appellate Tribunal upheld the CIT(A)'s order, noting the assessee's continued non-appearance and absence of contradictory material, thereby confirming the additions made by the Assessing Officer.
Key Issues
The primary issues concerned the validity of additions made under Sections 69A and 69C for unexplained cash deposits and withdrawals, and whether the appellate authorities were correct in dismissing the appeal due to the assessee's repeated failure to appear or furnish evidence.
Sections Cited
250, 148A, 148, 148A(d), 147, 144B, 69C, 69A
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail
:Asst.Year 2018-2019 Kovvammal Rajesh The Income Tax Officer K.V.House, Puthiyangadi v. Ward - 3 Madayi, Kannur – 670 304. Kannur. PAN :BCGPR1078A. (Appellant) (Respondent) Appellant by : --- None --- Respondent by :Smt.Leena Lal, Sr.AR Date of Date of Hearing :27.03.2025 Pronouncement : 28.03.2025 O R D E R
Per Sandeep Singh Karhail, JM :
The assessee has filed the present appeal against the impugned order dated 03/05/2024, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi, [“learned CIT(A)”], for the assessment year 2018-19.
When this appeal was called for hearing, neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. Upon perusal of the record, we noticed that this appeal was listed for hearing on previous occasions, and no one has appeared on behalf of the assessee. Therefore, we proceed to dispose . Kovvammal Rajesh. offthis appeal ex–parte qua the assessee, after hearing the learned Departmental Representative (“learned DR”) and on the basis of material available on record.
The brief facts of the case are that the assessee is an individual, and for the year under consideration did not file his return of income. On the basis of the information that during the year under consideration, the assessee deposited cash of iron and 78,28,050 and withdrew cash of iron and 91,09,000 from his Federal Bank account and deposited cash of 29,20,670 in and withdrew cash of INR 29,42,000 from his South Indian Bank account, notice under section 148A of the Act was issued to the assessee asking him to show cause why the proceedings should not be initiated by issuing notice under section 148 of the Act. However, the assessee did not comply to the said show cause notice. Accordingly, the order under section 148A(d) of the Act was passed on 30/03/2022 and notice under section 148 of the Act was issued. During the assessment proceedings, after multiple opportunities, the assessee submitted that he is a small dealer in lottery tickets of the Government of Kerala and is getting a small margin/commission on the tickets sold by him during the year, and the source of cash deposited is from the sale of lottery tickets. Since the explanation of the assessee was found unsatisfactory, again the show cause notice was issued to the assessee to furnish the documentary evidence to establish that the assessee has received such a huge amount of cash. The Assessing Officer (“AO”) vide order dated . Kovvammal Rajesh. 13/03/2023 passed under section 147 read with section 144B of the Act disagreed with the submissions of the assessee and held that the assessee has not provided even one name of the wholesale distributor from whom the lottery tickets were purchased by him. Further no PAN of such wholesale distributor is provided by the assessee. Further, the ledger account and invoices of purchase made, along with their PAN and address, have also not been furnished by the assessee. Thus, since the assessee has not been able to explain the expenditure with satisfactory evidence and explanations, the amount of cash withdrawal of iron and 91,69,000 from Federal Bank and INR 29,42,000 from South Indian Bank was treated as unexplained expenditure under section 69C of the Act and added to the total income of the assessee. Further, the AO noted that the assessee claims to be a member of Lottery Agents Kshemanidhi (Welfare Fund) Scheme of Government of Kerala and produced a certificate dated 20/01/2023. However, the year under consideration is the assessment year 2018 and 19, and therefore, the above certificate does not help the assessee’s case. Therefore, the AO held that the assessee has failed to establish the genuineness of cash deposited and withdrawn and accordingly added the total cash deposited amounting to INR 1,07,40,722 total income of the assessee under section 69A of the Act as unexplained money.
The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee in the absence of any written submission and evidence being produced by the assessee against the additions made . Kovvammal Rajesh. by the AO. The learned CIT(A) noted that during the appellate proceedings, four notices were issued to the assessee, however, the assessee did not respond to any of these notices. Accordingly, the learned CIT(A) upheld the addition made by the AO under section 69A and section 69C of the Act. Being aggrieved, the assessee is in appeal before us.
During the course of hearing, the learned DR explained the facts of the case and vehemently relied upon the order passed by the lower authorities.
We have heard the learned DR and perused the material available on record. We find that in the impugned order, the learned CIT(A), after considering the findings of the AO, has dismissed the appeal filed by the assessee in the absence of any written submission and evidence filed by the assessee in response to various notices issued during the appellate proceedings. In the appeal before us also, no one appeared for or on behalf of the assessee despite the fact that this appeal has been listed for hearing before the Tribunal on three occasions. Thus, in the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the learned CIT(A) requires no interference and, therefore, is upheld. Accordingly, the grounds raised by the assessee in its appeal are dismissed.
Order pronounced on this 28th day of March, 2025.