SHRI KAUSHAL NITINBHAI BHADESIYA,RAJKOT vs. THE INCOME TAX OFFICER, WARD-3 (1) (3), RAJKOT

Brief facts qua the issue are that assessee filed his return of income for the year under consideration. As per the information from the ITS during financial year 2010-11 the assessee has made cash deposit of Rs.14,74,100/- in the saving bank account maintained with the Citizen Co-Op. Bank Ltd. It was noticed by the AO that the appellant had made deposit remained unexplained and case was reopened u/s 144 of the Act after recording the reasons and obtaining necessary approval from higher authority on 23.03.2017. Accordingly, notice u/s 148 of the Act was issued on 26.03.2017. Subsequently, notice u/s 142(1) was issued from (AY-11-12) Kaushal N Bhadeshiya 3 time to time but assessee has not bothered to furnish any details explanation in this regard. Accordingly, final show cause notice was issued and date of hearing fixed on 27.11.2017. The assessee failed to comply such show cause notice. In absence of any satisfactory explanation total cash deposits amounting to Rs.16,32,413/- made in saving bank account was treated as unexplained money u/s 69A of the Act and added to his total income.

Aggrieved by the order of Assessing Officer the assessee carried the matter in appeal before the Ld.CIT(A). The Ld. CIT(A) issues notice u/s 250 of the Act four times on the assessee. Out of which assessee responded by filing letter dated 20.02.2023 and 05.05.2023 requesting for adjournment. During the appellate proceedings, appellant had not filed any submissions in response to any notice issued. Therefore, Ld. CIT(A) confirmed the addition made by Assessing Officer and dismissed the appeal of assessee.

Aggrieved by the order of Ld.CIT(A) assessee is in further appeal before us.

The Ld. Counsel for the assessee argued that assessee wants to file additional evidences and also submitted that assessee was unable to submit before the lower authorities due to unavoidable circumstances. The Ld. Counsel submitted that this clearly substantiates the nature and source of cash deposit as well as assessee’s claim made u/s 69A of the Act. The Ld. Counsel of the assessee submits that the Ld. CIT(A) passed (AY-11-12) Kaushal N Bhadeshiya 4 the order u/s 250 of the Act on 11.11.2024 without hearing the assessee which is in violation of the principles of natural justice. The assessee could not represent his case before Ld. CIT(A) and the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the Ld. CIT(A) due to circumstances beyond his control. Adequate opportunity of hearing was not given to the assessee; therefore, Ld. Counsel contended that one more opportunity should be given to the assessee to plead his case before the AO. He undertakes to be vigilant and furnish explanation and details expeditiously.

On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue supported the order of lower authorities. He stated that assessee has been negligent in pursuing the appeal before CIT(A).

We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. We find that both lower authorities have passed ex parte orders. Evidently, the assessee did not comply with the notices issued by AO and Ld. CIT(A). Hence, addition of cash deposit of Rs.16,32,413/- u/s 69A of the Act have been made by AO, which was confirmed by CIT(A). The Ld. Counsel of assessee submitted that non-compliance by assessee was not deliberate but due to unavoidable circumstances. He has submitted various details which were not submitted before AO or Ld.CIT(A). Rule-29 permits ITAT to admit (AY-11-12) Kaushal N Bhadeshiya 5 additional evidence for any substantial cause. The Ld. Counsel for the assessee submitted that non-compliance was due to unavoidable circumstances. Hence, the additional evidences are admitted. After considering the contentions of both parties, we find that the Ld. CIT(A) has not passed an order as per the mandate of section 250(6) of the Act and dismissed the appeal of assessee only on the ground of non- compliance. The order passed by the Ld.CIT(A) is clearly violative of the express provisions of section 250(6) of the Act, which provides that the appellate orders of the Ld.CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the Appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the fact that the assessment order was confirmed by Ld. CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. In the interest of justice, we set aside the order of Ld.CIT(A) and remit the matter back to the file of AO with a direction to pass fresh order in accordance with law after granting adequate opportunity of hearing to assessee. However, on account of non-compliance attitude of the assessee, a cost of Rs.2,000/- (Rupees two thousand only) is imposed on the assessee, which shall be deposited with the Prime Minister Relief Fund, within 15 days from the date of receipt of this order. The assessee is directed to be vigilant and to furnish (AY-11-12) Kaushal N Bhadeshiya 6 all details and explanation as needed by AO and not seeking adjournment without valid reason. With this direction, the grounds of appeal