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Facts
The Assessing Officer (AO) passed an ex-parte order under Section 144 of the Income Tax Act, adding ₹ 39,65,160/- on account of alleged unaccounted money. The assessee failed to respond to notices from the AO and the CIT(A). The assessee claimed that certain amounts withdrawn for house construction were re-deposited, but this was a bald statement without supporting documents.
Held
The Tribunal observed that the assessee's claim regarding withdrawn and re-deposited amounts was unsubstantiated. However, considering the possibility of ignorance of law and to serve the ends of justice, the Tribunal decided to give the assessee another opportunity to prove their case.
Key Issues
Whether the amounts deposited in the bank account are to be treated as unexplained money, and if the assessee should be given an opportunity for fresh assessment despite prior non-compliance.
Sections Cited
250, 144, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, PATNA
Assessment Year: 2017-18 Dhrub Narayan Pandey, At Tiwari Tola, Ward No. 33, Saharsa, Bihar - 852201 [PAN: ANCPP8696A] .....................…...…………….... Appellant vs. ITO, Ward 3(5), Saharsa ..........…..….......................... Respondent Appearances by: Assessee represented by : None Department represented by : Shri Ashwani Kr. Singal, JCIT Date of concluding the hearing : 16.01.2025 Date of pronouncing the order : 04.02.2025
ORDER PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The present appeal arises from order under Section 250 of the Income Tax Act, 1961 (hereafter “the Act”), dated 03.05.2024. In this case, vide order dated 20.11.2019 the Ld. AO passed an ex-parte order under Section 144 of the Act and added ₹ 39,65,160/- on account of alleged unaccounted money deposited during demonetization period. Before the Ld. CIT(A) also, the assessee could not succeed as the notices issued for fixing the case for hearing were not responded to by the assessee.
“1. For that the grounds of appeal hereto are without prejudice to each other.
2. For that the order of the learned assessing officer and also the learned Commissioner of Income Tax (Appeal) is bad both in law and on facts.
3. For that the order of the learned assessing officer has erred in subjecting the whole of the deposits in the bank account to tax as unexplained money under Section 69 A read with Section 115 BBE of the Act on the solitary ground of non- compliance to the notices notwithstanding the fact that the deposits in the bank account represented income from salary and also retirement benefits out of which a sum of 9 lakh and 7,50 lacs was withdrawn on 27.06.2016 and 09.10.2016 for construction of a residential house and the same on account of non-user were re- deposited on 13.11.2016 only out of the opening cash balance on the day after demonetization and that the same being derived from explained sources of income provisions of Section 69A of the Act is not applicable.
4. For that the learned Commissioner of Income Tax (Appeal) has erred in dismissing the appeal in liminie on the solitary ground that the notices were not complied with notwithstanding the fact that the appellant is hardly conversant with the faceless assessment and of appeal and for the purpose was solely dependent on his counsel who unfortunately, did not neither attend himself nor intimated him of the receipt of such notices on the web portal.
5. For that in any view of the matter the appellant was prevented by sufficient cause in not making compliance to the notices issued by the learned assessing officer in course of assessment proceedings and also the learned Commissioner of Income Tax (Appeal) in a faceless appeal and therefore, merit to be set aside for hearing de novo.
6. For that other various grounds which may be urged at the time of hearing.”
On the last date of hearing, none appeared on behalf of the assessee but it was decided to proceed with the hearing, with the help of Ld. DR. 2.1 It was brought to our notice by the Ld. Departmental Representative that there was an absolute failure on the part of the assessee to pursue his case before the lower authorities and in the absence of any cogent reason regarding the impugned cash deposits, there was no option but to add the said deposits in the hands of the assessee.
We have perused the orders of authorities below and gone through the statement of facts filed in the form of appeal before the ITAT. It is seen Dhrub Narayan Pandey that there is a claim that amounts of Rs. 9 Lacs and Rs. 7.50 Lacs were withdrawn on 27.06.2016 and 09.10.2016 respectively. These very same amounts were re-deposited in the bank account. However, this is a bald statement, without any supporting document. It is, therefore, felt that the assessee deserves a chance to prove his case before the Ld. AO again. We are also persuaded to give another chance to the assessee because of the fact that there is a case attempted to be made of ignorance of law. In any case, it would serve the ends of justice if this matter was to go back to the file of Ld. AO for fresh assessment. We accordingly remand this matter back to the file of Ld. AO. The assessee would do well to present the facts before him.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the court on 04.02.2025