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Facts
The assessee, an individual in the fish consignment business, did not file an original return for AY 2018-19. The AO, noticing high-value transactions including cash deposits of Rs. 90.50 lakhs, initiated reassessment proceedings under Section 148. Despite filing a belated return, the assessee failed to provide supporting documents, leading the AO to assess an income of Rs. 92,89,680, treating Rs. 90.50 lakhs as unexplained money under Section 69A.
Held
The Ld. CIT(A) had dismissed the assessee's appeal for non-prosecution due to the assessee's repeated failure to appear or provide documents. The Tribunal, acknowledging the assessee's lapses but considering the substantial addition and principles of natural justice, remitted the matter back to the Ld. CIT(A) for fresh consideration on merits, granting the assessee one more opportunity, conditional on their cooperation.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte for non-prosecution and whether the addition of cash deposits as unexplained money under Section 69A was sustainable without providing adequate opportunity to the assessee.
Sections Cited
147, 144, 148, 143(2), 142(1), 144B, 69A
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI LALIET KUMAR, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short
I.T.A.No.442/VIZ/2024 Kanadharaju Naga Venkata Ramakrishnam Raju “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1068177201(1) dated 30.08.2024 for the A.Y.2018-19 arising out of order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (in short ‘Act’) dated 20.12.2018.
Brief facts of the case are that, assessee is an individual running the business of sale of fish on consignment basis. For the A.Y. 2018-19, assessee did not file original return of income. Ld. Assessing Officer [hereinafter in short “Ld. AO"] on going through available records noticed that assessee had entered into the following transactions: -
Type of Transaction Amount Cash-deposits with Bank of India Rs.90,50,000/- Cash Withdrawals from Bank of India Rs.3,31,66,000/- Interest Receipts Rs.25,859/- Total Rs.4,22,41,859/-
Ld. AO has reason to believe that income has escaped assessment and issued notice under section 148 of the Act on 06.04.2022. In response assessee filed return of income on 23.09.2023 declaring total income of Rs. 2,39,680/-. Subsequently, statutory notices under section 143(2) and 142(1) of the Act were issued and served on the assessee. In response assessee has furnished part reply on 06.10.2023 without any supporting documentary evidences. Thereafter, Ld. AO issued notice on 03.11.2023 requesting to furnish the complete details. In response, assessee failed to submit the details as called for. Therefore, Ld. AO proceeded to complete the Page. No 2
I.T.A.No.442/VIZ/2024 Kanadharaju Naga Venkata Ramakrishnam Raju assessment under section 147 r.w.s. 144B of the Act and determined the income of the assessee at Rs. 92,89,680/- by making cash deposits of Rs.90,50,00/- as unexplained money under section 69A of the Act.
4. On being aggrieved, assessee preferred an appeal before Ld. CIT(A) but the assessee even after receipt of the hearing notices on various dates did not file any supporting documents on his contentions as per the grounds of appeal raised by him. The Ld.CIT(A) thus, dismissed the appeal of the assessee for non-prosecution.
On being aggrieved, assessee preferred an appeal before us by raising the following grounds of appeal: -
1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal ex-parte.
3. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.90,50,000 made by the assessing officer u/s 69A of the Act by treating the cash deposits in the bank account of appellant as unexplained money.
Any other ground that may be urged at the time of appeal hearing.”
At the time of hearing, Ld. AR submitted that Ld.CIT(A) passed exparte order without providing adequate opportunity of being heard to the assessee, therefore, considering additions/disallowance made by the Assessing Officer, Ld.AR pleaded
Page. No 3
I.T.A.No.442/VIZ/2024 Kanadharaju Naga Venkata Ramakrishnam Raju that the matter may be remitted back to the file of the Ld. CIT(A) in the interest of natural justice.
On the other hand, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the order of the Ld.CIT(A) and submitted that assessee has not utilized the opportunity provided by Ld.CIT(A). The Ld.CIT(A) thus, dismissed the appeal of the assessee for non-prosecution. Therefore, the order passed by Ld.CIT(A) is exparte order and pleaded to confirm the orders passed by the Revenue Authorities.
We have heard both the side and perused the material available on record. On a perusal of the Ld.CIT(A) order, it is observed that even though the Ld.CIT(A) provided opportunity on several occasions, assessee could not appear nor complied to the notices issued. Considering the prayer of the Ld.AR and totality of facts and keeping in view the additions / disallowance made by the Assessing Officer, following the principles of natural justice we are of the opinion that assessee shall be given one more opportunity to submit evidences substantiating his claim. Therefore, considering the facts and circumstances of the case and in order to meet the principles of natural justice, we are of the view that it is a fit case to remit the matter back to the file of the Ld. CIT(A) for fresh consideration by providing one more opportunity to the assessee and at the same breath we direct the assessee to cooperate with the proceedings before the Ld. CIT(A) without seeking unnecessary Page. No 4
I.T.A.No.442/VIZ/2024 Kanadharaju Naga Venkata Ramakrishnam Raju adjournments. Ld. CIT(A) is directed to decide the case on merits in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Pronounced in the open Court on 22nd January, 2025
Sd/- Sd/- (लललत कुमार) (एस बालाकृष्णन) (LALIET KUMAR) (S. BALAKRISHNAN) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated: 22.01.2025 Giridhar, Sr.PS आदेश की प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Kanadharaju Naga Venkata Ramakrishnam Raju D.No. 3-96, Jallikakinada Ganapavaram Mandal West Godavari District – 534186 Andhra Pradesh 2. रधजस्व/ The Revenue : Income Tax Officer – Ward-1 Income Tax office, Sajjapuram Tanuku – 534211 Andhra Pradesh 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गधर्ाफ़धईल / Guard file //True Copy// आदेशधिुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam Page. No 5