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Facts
The assessee, a private limited company, filed its income tax return, which was selected for scrutiny. Despite notices, the assessee failed to comply or provide explanations for significant cash deposits made during demonetization. The Assessing Officer treated these deposits as unexplained income under Section 69A and added them to the total income.
Held
The Tribunal noted that the assessee had multiple opportunities before the CIT(Appeals) to present their case but failed to do so. However, to meet the principles of natural justice, the Tribunal decided to set aside the CIT(Appeals) order.
Key Issues
Whether the CIT(Appeals) order, passed ex-parte due to non-compliance by the assessee, should be upheld, or if a further opportunity should be granted to the assessee.
Sections Cited
143(2), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rajesh Kumar
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 21st September, 2023 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Unik Surgical Pvt. Limited 2. Brief facts of the case are that the assessee is a Private Limited Company, which filed its return of income electronically declaring total income at Rs.23,60,940/-. The return was selected for complete scrutiny under CASS and notice under section 143(2) was issued and served on the assessee. Inspite of service of notice, no compliance was made from the side of assessee. Thereafter a show-cause notice was issued to the assessee stating that if the assessee fails to make compliance of the notice, it will be presumed that the assessee has nothing to say in this regard and ex-parte order will be passed on the basis of material available on record. The assessee failed to give any explanation about the nature and source of cash deposits to the tune of Rs.78,50,000/- during the time of demonetization period maintained with Corporation Bank and deposit to the tune of Rs.28,22,000/- maintained with United Bank of India. Therefore, the ld. Assessing Office treated the aggregated amount of Rs.1,06,72,000/- as unexplained money under section 69A and added the same to the total income of the assessee. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate his claim, but the appellant did not file the written submissions and did not represent the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal on 21st September, 2023.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) passed an ex-parte order by upholding the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.1,06,72,000/-. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
We have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall (A.Y. 2017-2018) Unik Surgical Pvt. Limited be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 31/01/2025.