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Facts
The assessee did not file her Income Tax Return for AY 2018-19. The CBDT flagged cash deposits of Rs.2,91,03,000/- and TDS on interest income of Rs.15,240/-. The AO made additions of Rs.2,99,99,003/- as unexplained cash/money under section 69A and Rs.15,240/- as interest income. The CIT(A)/NFAC dismissed the assessee's appeal for non-compliance without addressing the merits of the case.
Held
The Tribunal found that the CIT(A)'s dismissal of the appeal for non-compliance, without addressing the merits or providing reasons, violated the legislative mandate of Section 250(6) of the Act. It set aside the CIT(A)'s order and remanded the matter for fresh adjudication on merits, subject to the assessee furnishing all requisite documents without seeking adjournments.
Key Issues
The key issues included the validity of notices issued under sections 148/148A, the justification for additions of unexplained cash deposits and cash in hand under section 69A, the addition of interest income, and the procedural propriety of the CIT(A)'s dismissal of the appeal for non-compliance without addressing the merits.
Sections Cited
194A, 148, 142(1), 69A, 147, 144, 144B, 148A(d), 148A(b), 250(6)
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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2018-19 Sapana Dharmendra Shah, The Income Tax Officer, Khodiyar Bhavan, Ramsetu, Ward – 1, Malegaon Opp. Gayatri Mangal Karyala, Vs. Malegaon, Nashik-423203 PAN : BELPS3009B अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Sanjeev Mutha (Virtual) Department by : Shri Manish Mehta Date of hearing : 20-01-2026 Date of 27-01-2026 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 22.08.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2018-19.
Briefly stated the facts are that the assessee is an individual and did not file his return of income for AY 2018-19. Based on the information flagged by the CBDT through Insight Portal under the head “NMS Category”, it was found that during the relevant AY 2018-19, the assessee had deposited cash of Rs.2,91,03,000/- in her bank account maintained with The Malegaon Merchant‟s Co-op Bank Ltd. in the name of M/s Shree Kakaji Masale and Foods. Further, there is also TDS made to the tune of Rs.1,524/- u/s 194A of the Income Tax Act, 1961 (the “Act”) on „interest other than „Interest on securities‟ against a total credit of Rs.15,240/- by The Malegaon Merchant‟s Co-op Bank Ltd., which has not been disclosed to the Department. Since, the assessee had not filed her return of income, notice u/s 148 of the Act was issued on 05.04.2022 which was duly served upon the assessee. In response thereto, the assessee did not file her return of income. Thereafter, notice u/s 142(1) of the Act as well as show cause notice were issued, in response to which the assessee filed certain documents/details. On examining the case records and submissions of the assessee, the Ld. Assessing Officer (“AO”) observed that the assessee has not offered any acceptable and cogent explanation regarding the source of cash deposit and also not provided any documentary evidence in support of source of money. Further, due to lack of any clarification or documentary evidence in support of the issue of launching cash in hand suddenly in the FY 2017-18 to the tune of Rs.8,96,003/- (as reflected in balance sheet for the year ended on 31.03.2018), the Ld. AO added the total amount of Rs.2,99,99,003/- (Rs.2,91,03,000/- + Rs.8,96,003/-) to the income of the assessee as unexplained cash/money u/s 69A of the Act and Rs.15,240/- towards interest income and completed the assessment on total income of Rs.3,00,14,243/- vide his order dated 28.02.2024 u/s 147 r.w.s. 144 .r.w.s. 144B of the Act.
Before the Ld. CIT(A)/NFAC there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee and endorsed the findings of the Ld. AO in view of the fact that no written submissions/information/documents were filed by the assessee.
Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
1. The order passed u/s. 148A(d) as well as notice issued u/s 148 without taking the approval of appropriate Specified Authority as well as the assessment order pursuant to same may please be cancelled.
2. The notice issued u/s. 148 in the instant case may please be cancelled being bad in law as the same is not issued through automated allocation, in accordance with risk management strategy formulated by the Board as well as Notification No. 18/2022/F No. 370142/16/2022 – TPL (Part-1) dated 29/03/2022 and therefore, the order passed u/s. 147 r.w.s. 144B pursuant to said notice may please be cancelled.
3. The notice issued u/s. 148A(b) as well as order passed u/s. 148A(d) without conducting requisite enquiries as mandated by the Law may please be quashed.
4. On the Basis of facts and in the circumstances of the case and as per law, the assessing officer is not justified in making an addition of Rs. 2,99,99,003/- account of unexplained money by invoking section 69A when the provisions of section 69A are not applicable in the present case.
5. On the basis of facts and in the circumstances of the case the notice issued u/s. 148 may please be quashed as the same is issued without appraising the appellant for exact reason i.e. without striking off the irrelevant portion in the said notice.
6. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 2,91,03,000/- on account of unexplained cash deposits by invoking section 69A of the Act, ignoring the fact that the said bank account was operated by and accounted by the husband of Appellant and more particularly when the said bank account was duly recorded in the books of account of the husband of the appellant.
7. On the basis of the facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 8,96,003/- on account of “cash in hand” without appreciating that the same was duly reflected in the books of account of the appellant.
8. On the basis of the facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 15,240/- on account of interest income.
The appellant craves for the addition to, deletion, alteration, modification of the above grounds of appeal.”
We have heard the Ld. Representatives of the parties and perused the material available on record. We find that due to lack of furnishing of any written submissions/documents/information by the assessee, the Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsed the findings of the Ld. AO. It is an admitted fact that the assessee failed to comply with the various notice(s) of hearing issued by the Ld. CIT(A)/NFAC. The Ld. AR has, however, contended before us that the non-compliance before the Ld. CIT(A)/NFAC was not intentional but it resulted due to certain unavoidable circumstances beyond the control of the assessee. The Ld. AR submitted that the assessee has a strong case on merits and given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details/information/documents in support thereof. He therefore urged that the matter may be sent back to the file of the Ld. CIT(A)/NFAC for adjudication afresh on merits. The Ld. DR had no objection to the above request of the Ld. AR. We observe that the Ld. CIT(A)/NFAC passed the impugned order for the reason that there was no material on record to warrant interference in the order of the Ld. AO without himself going into the merits of the case. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. Thus, in our view, his order is in violation of the provisions of section 250(6) of AY 2018-19 the Act. Considering the totality of the facts of the case and in the interest of justice, we deem it fit, to set aside the order of the Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh and to pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A) NFAC shall be at liberty to pass appropriate order as per law. We direct and order accordingly. The grounds raised by the assessee are therefore allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.