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Facts
The assessee filed a return of income, but the Assessing Officer (AO) discovered undisclosed cash deposits of Rs. 1,49,18,734/- in a bank account. Believing income had escaped assessment, the AO issued a notice under Section 148. Due to the assessee's non-compliance, the AO estimated net profit at 8% of the credits and completed the assessment under Section 147 read with Section 144. The CIT(A) upheld the AO's order, also due to the assessee's non-compliance.
Held
The Tribunal acknowledged the assessee's non-compliance before the CIT(A) but recognized that there could be valid reasons for it. To ensure justice, the Tribunal set aside the CIT(A)'s order and restored the issues to the CIT(A) for fresh adjudication on merits, with directions to provide the assessee an adequate opportunity of hearing and for the assessee to cooperate.
Key Issues
Whether the CIT(A) was justified in confirming the assessment ex-parte due to the assessee's non-compliance, or if the case warrants a fresh adjudication on merits with proper opportunity for the assessee to present their case regarding the cash deposits.
Sections Cited
147, 144, 250, 148, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, NAGPUR
Before: SHRI PAVAN KUMAR GADALE
These two appeals were filed by the assesse against separate orders of even date 09/06/2025 passed by the CIT(A)/NFAC, Delhi, u/sec147 r.w.s 144 and u/sec250 of the Income Tax Act, 1961 (for short "the Act"). Since the issues in these two appeals are common and identical, hence they are clubbed, heard and a consolidated order is passed. For the sake of convenience the appeal in for the assessment year 2016–17 is taken as lead case and facts
2 Ashok Pinjumal Sachdev ITA no.415–416/NAG./2025 narrated. The fallowing grounds of appeal are raised by the assessee as under:– “1] Learned A.O. erred in adding amounting to Rs. 11,93,498/- and same is confirmed by CIT(A). 2] Learned A.O. & CIT(A) has not properly apply his mind and passed the Order. 3] Learned CIT(A) erred in not giving proper/effective hearing to Appellant. The CIT(A) has not given sufficient time for compliance. 4] Learned A.O. erred in adding total credit in the books of Renuka Mata Multistate Urban Coop, Credit Society Ltd. and same is confirmed by CIT(A). 5] Learned A.O. erred in estimating the profit @8% of total turnover without any basis and same is confirmed by CIT(A). 6] Appellant crave to urge additional grounds at the time of hearing or modified the grounds of appeal, if necessary.”
2. The Brief facts of the case are that, the assessee is engaged in the business and has filed the return of income for the assessment year 2016–17 on 08/08/2016 disclosing a total income of Rs.2,68,900/-. The Assessing Officer (A.O) as per the information available with the income tax department found that the assesse has made cash deposits in the F.Y. 2015-16 aggregating to Rs.1,49,18,734/- in his bank account maintained with M/s. Renuka Mata Multi State Urban Co–operative Credit Society Ltd. The Assessing Officer has observed that these facts are not disclosed or referred in the return of income filed. Hence the Assessing Officer has reason to believe that income has escaped assessment and issued notice u/sec148 of the Act. In compliance, the assessee has filed the submissions on various dates and also filed objections on the reasons for 3 Ashok Pinjumal Sachdev ITA no.415–416/NAG./2025 reopening of the assessment and were disposed off by the Assessing Officer vide letter dated 17/03/2022. Further the A.O has issued show cause notice considering the financial statements, which includes Trading Account, Balance Sheet and Bank Statements to explain the sources of cash deposits in the M/s. Renuka Mata Multi State Urban Co–operative Credit Society Ltd. Since there was no compliance, the Assessing Officer considering the business of the assessee has treated the total credits as turnover of the assesseE and estimated the net profit @ 8% which works out to Rs.11,93,498/- and assessed the total income of Rs.14,52,398/- and passed the order u/sec147r.w.s144r.w.s144B of the Act dated 30/03/2022. Aggrieved by the order, the assessee has filed appeal before the CIT(A).
In appellate proceedings, the CIT(A) has considered the grounds of appeal, statement of facts, findings of the Assessing Officer and issued notices of hearing on various dates. Since there was no compliance to the notices by the assessee, the CIT(A) considering the information on record has confirmed the action of the Assessing Officer and dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Hon’ble Tribunal.
4. At the time of hearing, none appeared on behalf of the assessee. The learned Departmental Representative supported the order of the CIT(A).
4 Ashok Pinjumal Sachdev ITA no.415–416/NAG./2025
Heard the submissions of the Ld.D.R. and perused the material available on record. The CIT(A) has dismissed the assessee’s appeal, as there was no compliance to the notices issued on various dates referred at Page 6 Para 4 of the order in the appellate proceedings. Further the CIT(A) is of the opinion that the assessee is not interested in prosecuting its appeal and has confirmed the action of the Assessing Officer. Whereas, the assessee has raised grounds of appeal challenging the action of the assessing officer. There could be various reasons for non–compliance by the assessee which cannot be ruled out. Hence, considering the facts, circumstances, and to meet the ends of justice, the assessee should be provided with one more opportunity for hearing. Accordingly, the order of the CIT(A) is set aside and restore the disputed issues to the file of the CIT(A) to adjudicate issue afresh on merits and the assessee should be provided adequate opportunity of hearing and the assessee should also co–operate in submitting the information for early disposal of appeal. And the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
./2025 Assessment year 2017–18. 7. As the facts and circumstances in this appeal is identical to ITA.No.415/NAG/ 2025 for the A.Y.2016-17 (except variances in figures) and the decision rendered in above paragraph 5 & 6 would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal filed by the assessee are allowed for statistical purposes.
5 Ashok Pinjumal Sachdev ITA no.415–416/NAG./2025
In the result, the two appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 09/10/2025