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Facts
The assessee's appeal was initially dismissed ex-parte. Subsequently, a miscellaneous application led to the recall of the ex-parte order. The assessee's grounds for appeal relate to an addition of Rs. 10,15,000 made by the Assessing Officer on account of unexplained cash deposits, which the assessee claims were savings accumulated for purchasing a house.
Held
The Tribunal noted that the original assessment and the CIT(A) order were passed ex-parte due to the assessee's non-appearance, attributed to lapses by their tax consultant. Given the circumstances and to ensure justice, the Tribunal decided to recall the ex-parte order and remand the matter to the CIT(A) for a fresh decision on merits.
Key Issues
Whether the addition of Rs. 10,15,000 on account of unexplained cash deposits is justified, and whether the assessee should be given a further opportunity to present their case and evidence.
Sections Cited
144, 69A, 250(1), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SMC-B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the Order dated 30.11.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2017-2018.
2 ITA.No.72/Hyd./2025 2. The Assessee has raised the following grounds in the instant appeal:
“The Order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 30-11-2024 is erroneous, contrary to law and facts of the case. 2. a) Commissioner of Income Tax (Appeals) is not justified in upholding the addition of Rs.10,15,000/-made by the Assessing Officer on account of cash deposits. b) Commissioner of Income Tax (Appeals) ought to have seen that Appellant belong to a small middle class family and does not have any email id of her own and could not file her written submissions as the notices issued by CIT(A) were not received by Appellant, since email id furnished by the Appellant belongs to her relative who did not inform the Appellant about the said notices.
c) Commissioner of Income Tax (Appeals) ought to have seen that the Appellant has been accumulating her savings in cash to purchase a house property and since demonetization, scheme was announced by the Government of India, she deposited the cash available with her into her Savings Bank Account. Commissioner of Income Tax (Appeals) also ought to have seen that Appellant purchased a house for Rs.18,62,000/- on 05-03-2018 by raising housing loan of Rs.9,25,000/- from State Bank of India along with cash available in her account with bank.
For all of the above and such other grounds as may be urged at the time of hearing it is prayed that the appeal be allowed and suitable directions be issued to the Assessing Officer to delete addition of Rs.10,15,000/- made in the Asst. Order in the Interest of justice.”
3 ITA.No.72/Hyd./2025 3. Earlier this appeal of the assessee was dismissed by the Tribunal vide Order dated 12.03.2025. Thereafter, the assessee filed M.A.No.74/Hyd./2025 for recalling of the earlier Order passed by the Tribunal ex-parte. The Tribunal vide Order dated 07.11.2025 in M.A.No.74/Hyd./2025 has recalled the earlier Order and restored the appeal of the assessee in Para no.4 of the Order as under:
“4. We have heard both the parties and considered the relevant contents of Miscellaneous Application filed by the assessee. We find that, the order of the Tribunal dated 12.03.2025 was passed ex-parte in the absence of the assessee. Considering the reasons explained by the assessee for non-appearance and also keeping in view the liberty granted by the Hon'ble High Court of Telangana, we are of the considered view that, there exists sufficient cause for non-appearance when the appeal was called for hearing. In view of the above, and in the interest of justice, we recall the ex-parte order of the Tribunal dated 12.03.2025 passed in Registry to post the appeal for hearing in due course by issuing necessary notice to the parties. Accordingly, the M.A. of the assessee is allowed.”
4 ITA.No.72/Hyd./2025 4. Thus, the appeal of the assessee is now listed for fresh hearing and adjudication.
The learned Authorised Representative of the Assessee has submitted that the assessment order was passed ex-parte u/sec.144 due to lapse and negligence on the part of the Tax Consultant of the assessee and the assessee was depending upon the Tax Consultant for the tax matters. He has further submitted that the impugned order of the learned CIT(A) was also passed ex-parte when there was no representation on behalf of the assessee and that is also due to the lapse on the part of the Tax Consultant. He has thus submitted that now the assessee has produced the supporting additional evidences before the Tribunal and filed an application under Rule 29 of ITAT Rules, 1963 which may be admitted for adjudication of the appeal on merits. He has submitted that the Assessing Officer has made the addition of Rs.10,15,000/- on account of unexplained cash deposits in the bank account of the assessee. The source of the said deposit is the loan taken by the assessee for purchase of house property. In respect of the said transaction of loan, the 5 ITA.No.72/Hyd./2025 assessee has now filed the copies of the promissory note dated 05.11.2016. Thus, the learned Authorised Representative of the Assessee has submitted that the addition made by the Assessing Officer and confirmed by the learned CIT(A) is highly arbitrary and unjustified and the same may be deleted.
On the other hand, the learned DR has submitted that this additional evidence filed by the assessee is an afterthought and it is not in support of the source of the deposit of cash in the bank account as explained before the learned CIT(A). The learned DR has referred to para-3of the impugned order of the learned CIT(A) and submitted that the learned CIT(A) has reproduced the statement of fact as per Form-35 filed by the assessee wherein the assessee has claimed that the assessee has earned the income from tuitions and the deposit of Rs.10 lakhs is made in her bank account out of savings from such income from earlier years. The assessee has also reiterated the same claim in the grounds of appeal
in ground no.2(c) of the Form-36 filed by the assessee. Thus, the learned DR has submitted that the 6. ITA.No.72/Hyd./2025 additional evidence filed by the assessee is nothing, but an afterthought as manufacture documents in shape of promissory notes. She has relied upon the Orders of the authorities below.
7. Having considered the rival submissions and careful perusal of the relevant record it is noticed that the Assessing Officer has passed an ex-parte Order u/sec.144 of the of the Income Tax Act [in short "the Act"], 1961 dated 07.12.2019 whereby an addition of Rs.10,15,000/- was made as unexplained money u/sec.69A of the Act on account of cash deposit in the bank account of the assessee. The Assessing Officer has stated in the Order that there was no supporting evidence to substantiate the claim of the assessee as source of the income being tuition fee in para-5 of the assessment order as under:
“5. Though the assessee has admitted an income of Rs.3,15,000/- in the return of income filed for the A.Y.2017-18, she could not substantiate the claimed source of income i.e., Tuitions with proper evidence and hence the same is not accepted. In the absence of proper explanation received from the assessee, the cash deposits appearing in her bank account remain unexplained. Accordingly, entire amount of Rs.10,15,000/- representing 7 ITA.No.72/Hyd./2025 the cash deposits during the F.Y.2016-17 appearing in the bank account of assessee is treated as unexplained money u/s 69A of the Income Tax Act, 1961 R.W.S. 115BBE of the Income Tax Act, 1961.”
Thus, the Assessing Officer has rejected the claim of the assessee and made the addition of Rs.10,15,000/- u/sec.69A of the Act. On appeal, the learned CIT(A) has issued notices u/sec.250(1) of the Act on 24.12.2020, 25.09.2023 and 19.11.2024. However, there were no response on behalf of the assessee to these notices and consequently, the learned CIT(A) has dismissed the appeal of the assessee due to the reason that the assessee has not produced any supporting evidence despite sufficient opportunities. Thus, it is a case of non-representation on behalf of the assessee before the Assessing Officer as well as the learned CIT(A). Since the learned CIT(A) has not decided the appeal of the assessee on merits and dismissed the same for non-prosecution and non-appearance on behalf of the assessee, therefore, in the facts and circumstances of the case and in the interest of justice, 8 ITA.No.72/Hyd./2025 the impugned order of the learned CIT(A) is set aside and the matter is remanded to the record of the learned CIT(A) for deciding the same on merits, after giving one more opportunity of hearing to the assessee. The additional evidence filed by the assessee may also be taken into consideration by the learned CIT(A) before passing the fresh order.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 21.01.2026.