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Facts
The assessee filed a return for AY 2022-23 declaring Rs. 2,50,000. During scrutiny, substantial cash deposits of Rs. 9,27,88,340 were found in the assessee's current account, disproportionate to the declared income. The AO estimated business income at 5% of these deposits, adding Rs. 46,39,417.
Held
The CIT(A) passed an ex parte order upholding the AO's addition because the assessee failed to comply with notices. The assessee's representative submitted that they could not appear due to difficulties and requested another opportunity to present their case.
Key Issues
Whether the CIT(A) order passed ex parte is sustainable, and whether the assessee should be granted another opportunity to present its case and substantiate its claims.
Sections Cited
250, 143(1), 143(2), 142(1), 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2022-23 Sanjeev Kr. Azad.………………….....…..…………………....Appellant Flat No.302, Radhe-Krishna Apartment, Goal Road, Danapur, Bihar-801503 [PAN: AICPA9561G] vs. Assessment Unit, NFAC, Delhi……….…............................…..…..... Respondent Appearances by: Shri Ravi Shankar, appeared on behalf of the appellant. Shri Ashwani Kumar, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 17, 2025 Date of pronouncing the order : July 18, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 27.03.2025 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
Brief Facts of the case are that the assessee filed its return of income for A.Y. 2022-23 declaring a total income of Rs.2,50,000. The return was processed under section 143(1) of the Income-tax Act, 1961. The case was subsequently selected for scrutiny under CASS based on the reason that substantial cash deposits had been made in the assessee's current account, disproportionate to the returned income. Notices under sections 143(2) and 142(1) were issued. During the assessment proceedings, the Assessing Officer (AO) noted that the assessee had made cash deposits of Rs.9,27,88,340/- in a current account maintained with State Bank of India (SBI). The AO also verified Form 61A uploaded by SBI, confirming such deposits. The assessee, however, had declared only Rs.4,50,000/- as gross salary income in the return. The AO formed the view that the assessee was engaged in undisclosed business activity and had not declared any income there from. A notice under section 133(6) was issued to SBI, but no response was received. Based on the available material, and considering the bank's uploaded Form 61A verified by the principal officer, the AO proceeded to estimate the business income by applying a profit rate of 5% on total deposits of Rs.9,27,88,340/-, thereby adding Rs.46,39,417/- as business income under presumptive basis.
Against the order of AO the assessee preferred an appeal before the CIT(A), but did not comply with notices issued during the appellate proceedings. As a result, the CIT(A) passed an ex parte order upholding the addition made by the AO.
Dissatisfied with the above order assessee is in appeal before this tribunal at the time of hearing before us, the learned AR for the assessee submitted that the assessee was unable to appear before the authorities below due to non-receipt or other difficulties and could not present relevant documentary evidence to substantiate the nature of cash deposits. It was prayed that in the interest of justice, another opportunity may be granted to represent the case properly before the CIT(A).
On the other hand, the learned DR supported the orders of the lower authorities but did not object to the matter being remanded back for fresh adjudication.
We, after hearing both parties and perusing the materials available on record, observe that the CIT(A) passed the order ex parte, without the benefit of detailed representation from the assessee. Even before the AO, the assessee's submissions were insufficient to explain the huge cash deposits. In the interest of justice and fair play, we are of the view that one more opportunity should be granted to the assessee to substantiate its claim before the CIT(A). Accordingly, we deem it appropriate to restore the matter back to the file of the CIT(A) with a direction to re-adjudicate the issues after affording reasonable opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 18th July, 2025.