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Facts
The assessee did not file an ITR for AY 2010-11. Based on information of cash transactions worth Rs. 13,50,000/-, the AO initiated reassessment proceedings under Section 148, adding the amount as unexplained cash deposits. The assessment was completed under Section 147 read with Section 143(3), and the CIT(A) confirmed the addition without considering the assessee's explanation that these deposits were from earlier cash withdrawals.
Held
The Tribunal observed that the CIT(A) failed to consider the assessee's specific plea that the cash deposits were sourced from earlier cash withdrawals. Consequently, the matter was restored to the file of the CIT(A) for fresh adjudication (de novo) after granting the appellant a reasonable opportunity to be heard.
Key Issues
Whether the CIT(A) erred in confirming the addition of unexplained cash deposits without adjudicating the assessee's plea that the deposits were from prior cash withdrawals.
Sections Cited
139(1), 148, 147, 143(3)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 23.04.2024 for Assessment Year (AY) 2010-11.
Brief facts of the case are that the appellant is an individual deriving income from small real estate transactions. The regular return of income for AY 2010-11 was not filed by the appellant u/s. 139(1) of the Act. However, based on the information that the appellant made large cash transactions to the tune of Rs. 13,50,000/-, AO formed an opinion that income escaped assessment to tax. Accordingly, a notice u/s. 148 of Mammi Chakkuttiparambil the Income Tax Act, 1961 (the Act) was issued on 31.03.2017. In response to the said notice appellant filed return of income on 27.04.2017 declaring income of Rs. 2,00,000/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1, Tirur (hereinafter called "the AO")vide order dated 22.10.2018 passed u/s. 147 r.w.s. 143(3) of the Act at a total income of Rs. 15,67,670/-. While doing so, the AO made addition of Rs. 13,50,000/- being cash deposits made on various dates in Tirur Urban Co-operative Bank Ltd. Tirur.
Being aggrieved, an appeal was filed before the CIT(A) contending that the said cash deposits were made out of earlier cash withdrawals of Rs. 4,00,000/- on 15.04.2009 and Rs. 3,00,000/- on 20.11.2009. The CIT(A), without considering the explanation, merely confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before us in the present appeal.
When the appeal was called nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR.
The issue in the present appeal relates to the addition of unexplained cash deposit made in the bank account. No doubt, during the course of assessment proceedings the appellant had not offered any explanation regarding the source of cash deposit. However, during the course proceedings before the CIT(A), the appellant took a specific plea that the cash deposits were made out of the earlier withdrawals of money Mammi Chakkuttiparambil on 15.04.2009 of Rs. 4,00,000/- and on 20.11.2009 or Rs. 3,00,000/-. The CIT(A) neither adverted to this ground of appeal nor discussed it in the order passed by him. Therefore, in the circumstances, the matter is restored to the file of the CIT(A) for de novo adjudication in accordance with law after affording reasonable opportunity of hearing to the appellant.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on 10th February, 2025. 8.