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Facts
The assessee, a proprietorship firm dealing in MS, HSD & Lubricants, declared a total income of Rs. 6,80,240/- for AY 2017-18. The case was reopened under section 147 due to information about substantial cash deposits of Rs. 1,13,67,230/- during the demonetization period. The Assessing Officer made an addition of this amount as unexplained cash credit.
Held
The Tribunal found that the Assessing Officer made the addition based on a failure to submit satisfactory explanations, passing a best judgment assessment order under section 144B without providing a proper opportunity to the assessee. The assessee's inability to participate effectively was due to the demise of their authorized representative and incorrect notice delivery.
Key Issues
Whether the assessee was given a proper opportunity to present their case before the Assessing Officer, especially considering the circumstances of the authorized representative's demise.
Sections Cited
147, 144B, 68, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “CUTTACK BENCH, CUTTACK
Before: Shri Duvvuru RL Reddy, Vice- & Shri Rajesh Kumar
Assessment Year: 2017-18 Mr. Manoj Kr. Pradhan………………………………................……….……Appellant Qr. No.AM/06, Basanti Colony, Udit Nagar, Rourkela, Dist. Sundargarh, Odissa - 769012.. [PAN: AMBPP3396B] vs. ITO, Ward-3, Rourkela ....………..…………………………...……...…..…..Respondent Appearances by: Shri B. R. Panda, Advocate, appeared on behalf of the appellant. Shri Vijay Singh, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : September 03, 2025 Date of pronouncing the order : November 21, 2025 ORDER
Per Rajesh Kumar, Accountant Member:
This appeal filed by the assessee is directed against the order dated 02.05.2025 of the National Faceless Appeal Centre [‘CIT(A)’] passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2017–18.
Brief facts of the case are that the assessee is a proprietorship firm and carrying on business of trading in MS, HSD & Lubricants and filed return of income for the A. Y 2017-2018 declaring total income of Rs.6,80,240/-. The case was reopened u/s 147 on receipt of information that the assessee made substantial cash deposits of Rs.1,13,67,230/- in bank accounts of the assessee during demonetization period. The Assessing Officer completed the Mr. Manoj Kr. Pradhan assessment u/s 147 r.w.s. 144B by making addition of Rs.1,13,67,230/- as unexplained cash credit u/s 68 of the Act.
Aggrieved by the said order, the assessee filed an appeal before the CIT(A) wherein the ld. CIT(A) dismissed the appeal of the assessee by confirming the order of the Assessing Officer.
Being dissatisfied, the assessee filed the present appeal before us. At the time of hearing, the ld. AR submitted that the Assessing Officer passed a best judgment assessment u/s 144B without giving proper opportunity to submit documents or explanations. The ld. AR further submitted that the assessee did not effectively substantiate his case before the Assessing Officer due to demise of the then authorised representative and also sending of notices in wrong email address of the demised authorised representative. The ld. AR only prayed for one more opportunity by remitting back the matter to the file of one of the lower authorities for fresh verification.
On the other hand, the ld. DR did not object to the above prayer of the ld. AR.
We have heard the rival submissions and perused the records. We find that the Assessing Officer has made the addition only on the ground of failure to submit satisfactory reply or explanations from the assessee and the Assessing Officer passed best judgment assessment order u/s 144B of the Act wherein the assessee did not get proper opportunity to prove his case. We further find that the assessee did not participate properly before the Assessing Officer due to demise of the concerned authorised representative and wrong sending of notices which were beyond the control of the assessee. Similarly the counsel of the assessee did not furnish all the details before ld. CIT(A). Under 2 Mr. Manoj Kr. Pradhan the circumstances and on the request of the ld. AR of the assessee, in the interest of natural justice, we deem it proper to remand the matter back to the file of Assessing Officer with a direction to adjudicate the matter afresh after affording sufficient opportunity to the assessee of being heard and also considering all the materials/documents submitted by the assessee. The assessee is directed to fully cooperate in the remand proceedings by submitting all evidences/documents to substantiate his case.
In the result, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 21st November, 2025.