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Facts
The assessee filed a return of income for AY 2017-18 disclosing Rs.3,40,210/-, but the AO completed assessment at Rs.14,40,210/-, adding Rs.11 lakhs for cash deposits in specified bank notes during demonetization. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal found that the CIT(A) did not provide sufficient opportunity to the assessee to explain the source of cash deposits. The Tribunal also noted that the rejection of the opening cash balance explanation by the NFAC was based on bald observations and lack of evidence.
Key Issues
Whether the CIT(A) was justified in confirming the addition of Rs.11 lakhs made by the AO on account of cash deposits in specified bank notes during the demonetization period, and whether the assessee was given adequate opportunity to explain the source of deposits.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: HON’BLE SHRI INTURI RAMA RAO & SHRI SS VISWANETHRA RAVI
Assessment Years: 2017-18 Aditya Vikram Podder Swetha Poddar, Income Tax Officer, No.37, VVC Layout MTP Road, Ward-3(1), Coimbatore, Coimbatore. Tamil Nadu-641 002. [PAN: AAQPA5491H] Appellant Respondent Assessee by : Mr.Amit Rai, CA(Virtuallly) Revenue by : Ms.R.Anitha, Addl.CIT Date of Hearing : 05.01.2026 Date of Pronouncement : 05.01.2026 O R D E R PER INTURI RAMA RAO, A.M :
This appeal filed by the assessee against the order of the Addl/JCIT (herein after called CIT(A)’ in short], Chandigarh, dated 24.09.2025 for AY- 2017-18.
2.0 Briefly the facts of the case are, the appellant an individual. The return of income for the Assessment Year-2017-18 was filed by the appellant disclosing the income of Rs.3,40,210/. Against the said return of income, the assessment was completed by the AO vide order dated 14.11.2019 passed u/s. 143(3) at a total income of Rs.14,40,210/-. While doing so, the AO made addition of cash deposits in specified bank notes in the bank account during the demonetization period of Rs.11 lakhs for alleged failure of the appellant to explain the source of the said deposits.
3.0 Being aggrieved by the above assessment order, an appeal was preferred before the CIT(A), who vide impugned order dismissed the appeal. Being aggrieved, the appellant is in appeal before us.
4.0 We heard the rival submissions and perused the material available on records. The issue that arises for our consideration is whether the CIT(A) was justified in confirming the addition of Rs.11 lakhs made by the AO on account of cash deposits in specified bank notes during the demonetization period. On mere perusal of para 6 of the impugned order, it would be clear that the NFAC rejected the explanation of the appellant that the cash deposits were made out of opening cash balance of Rs.9,80,993/- by holding that the appellant has failed to show the availability of cash balance by adducing necessary evidence. The NFAC also made certain unwarranted bald observations. The CIT(A) had not given sufficient and reasonable opportunity to explain the source of the cash deposits. In the circumstances, we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with a direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee. Accordingly, the appeal of the appellant stands partly allowed for statistical purposes.
Page - 2 - of 3 5.0 In the result, the appeal of the assessee partly allowed for statistical purposes. Order pronounced on 5th , January-2026 at Chennai.