Loading judgment…
Facts
The assessee, a partner in M/s. Shas Distributors, filed a return for AY 2017-18. The AO completed assessment under Section 143(3), making an addition of Rs. 14,71,510 for cash deposits, which the assessee claimed were from the partnership firm's business receipts. The CIT(A) dismissed the assessee's appeal without a speaking and reasoned order.
Held
The ITAT found that the CIT(A)'s order was violative of natural justice for dismissing the appeal without adverting to the facts and grounds. Therefore, the ITAT set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for fresh disposal in accordance with law, ensuring the assessee a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without passing a speaking and reasoned order, thereby violating principles of natural justice, and whether the addition for cash deposits was correct.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2017-2018 Sri.Mohammed K Sakeeb The Income Tax Officer Mihraj House, v. Ward 1(2) Near Odumbra Bridge Calicut. Valiyedathparamba PO Thiruvanoor Nada Calicut – 673 029. PAN : AILPM1621M. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 10.02.2025 Pronouncement :14.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 12.11.2024 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1070295120(1) for the assessment year 2017-2018.
Briefly, the facts of the case are that the assessee is an individual deriving income from share income of the partnership firm, of which the assessee is a partner. The return of income for the assessment year 2017-2018 was filed on 15.11.2017 declaring total income of Rs.2,75,490. Against the said return of income, the assessment was completed by the Assessing Officer (“the AO" hereinafter) vide order . Sri.Mohammed K Sakeeb. dated 29th October, 2019 passed u/s.143(3) of the Income-tax Act, 1961 (“the Act” hereinafter) at a total income of Rs.17,47,000. While doing so, the AO made an addition of Rs.14,71,510 being cash deposits made in the bank accounts. rejecting the explanations of the assessee that the said cash deposits were made out of business receipts of the partnership firm, viz., M/s. Shas Distributors, of which the assessee is a partner.
Being aggrieved by the above assessment order, an appeal was filed before the CIT(A), contending that the cash deposits were made out of sale proceeds of partnership firm M/s.Shas Distributors. However, the CIT(A) without adverting to the statements of facts and grounds of appeal filed before him, merely dismissed the appeal.
Being aggrieved, the assessee is in appeal before me in the present appeal. When the case was called upon, none appeared on behalf of the assessee. Therefore, I proceed to dispose of the appeal on merits after hearing the learned Senior DR.
I heard the Senior DR and perused the material available on record. The issue in the present appeal is whether the AO is justified in making addition in respect of cash deposits made in the savings bank account maintained by the assessee as unexplained money of the assessee. It is the contention of the appellant that the deposits in the savings bank account were made out of the business receipts of the partnership firm, viz., M/s.Shas Distributors, of which the assessee is a partner. The AO had merely rejected the said explanation by holding that the assessee had failed to substantiate the same with reference to the books of account of the said firm. Even on appeal before the . Sri.Mohammed K Sakeeb. CIT(A), the assessee maintained the same stand. The CIT(A) without adverting to the statement of facts and grounds of appeal filed by the assessee, merely dismissed the appeal without passing a speaking and reasoned order. Thus, the order of the CIT(A) is violative of principles of natural justice. Therefore, I set aside the order of the CIT(A) and remand the matter back to the file of CIT(A) with direction to dispose of the same in accordance with law. Needless to say, the CIT(A) shall afford a reasonable 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 14th day of February, 2025.