M/S. RAHMATH TRADERS,MALAPPURAM vs. ITO, WARD-3, TIRUR

Brief facts of the case are that the appellant is a partnership firm engaged in the business of wholesale dealer of rice and other provisions. The return of income for AY 2017-18 was filed on 30.03.2018 declaring total income of Rs.5,66,390/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-3, Tirur vide order dated 24.12.2019 passed u/s. 143(3) of the Income Tax Act, Rahmath Traders 1961 (the Act) at total income of Rs. 46,60,890/-. While doing so, the AO made addition of Rs. 40,92,000/- being the cash deposited in the bank during demonetisation period.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. However, during the proceedings before the CIT(A), the appellant had not filed explanation except asserting that the cash was deposited out of the sale proceeds of rice and collection from customers. In the circumstances the CIT(A) has confirmed the action of the AO.

I carefully perused the order passed by the CIT(A) and find that it is not evident whether the appellant was given sufficient and reasonable opportunity to represent the matter before the CIT(A). The order of the CIT(A) is silent as to the number of opportunities granted and when the hearing notices were issued. In the circumstances, I am of the considered opinion that in order to meet the ends of justices the matter is required to be remanded to the AO for de novo adjudication in accordance with law after affording reasonable opportunity of hearing to the assessee.