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Facts
The Assessing Officer (AO) passed an assessment order for AY 2015-16, making an addition of Rs. 1,15,45,669/- under Section 68 for cash deposited in the bank account, resulting in a total assessed income of Rs.1,17,66,859/- against a returned income of Rs.2,21,190/-. The Ld. CIT(A) dismissed the assessee's appeal ex-parte due to non-representation, leading the assessee to file an appeal before the Income Tax Appellate Tribunal (ITAT).
Held
The ITAT noted that the assessee's appeal was dismissed ex-parte by the CIT(A). To ensure the principles of natural justice, the tribunal set aside the impugned order and restored the assessment to the file of the Assessing Officer for a fresh assessment. The assessee is to be given an adequate opportunity to present their case and is directed to cooperate with the AO by furnishing all requisite information and evidence.
Key Issues
1. Legal validity of the reopening of assessment under sections 147, 148, 148A, 151 and the assessment order, including limitation. 2. Justification of the addition made under section 68 for cash deposits in the bank account. 3. Whether the ex-parte dismissal of the appeal by the CIT(A) violated principles of natural justice.
Sections Cited
Section 147, Section 148, Section 144B, Section 148A, Section 151, Section 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH “DB”, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
This appeal has been filed by the assessee against the order of the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 25.02.2025 for the assessment year 2015-16. The grounds of appeal of the assessee are as under: -
1. That the Ld. CIT(A) has erred in law and on facts in passing the appellate order upholding the assessment order dated 22.03.2023 which is unsustainable in law as the same was not made in accordance with the provisions of Section 148 of the Act and also, the reopening of assessment was not in accordance with law.
2. That the Ld. CIT(A) has erred in law and on facts in passing the appellate order upholding the assessment order which is liable to be set aside and quashed as the assessment order is barred by limitation, including the notice u/s 148 of the Act.
3. That the Ld. CIT(A) has erred in law and on facts in passing the appellate order upholding the assessment order is unsustainable in law as the provisions of Section 148A of the Act were not complied with, in true letter and spirit, accordingly, the proceedings are bad in law and thus liable to be set aside.
Page 2 of 5 4. That the Ld. CIT(A) has erred in law and on facts in passing the appellate order upholding the assessment order is unsustainable in law as the sanction accorded in the appellant case is bad in law as the same is not in accordance with the provisions of section 151 of the Act, as the same was issued without any application of mind.
5. That the Ld. CIT(A) has erred in law and on facts in passing the appellate order in sustaining the impugned additions made by the Ld. AO of Rs. 1,15,45,669 is bad in law, without assigning any reasons and without taking proper cognizance of the facts and circumstances of the case and the material/ evidence submitted by the appellant with the Ld. AO.
6. That the Ld. CIT(A) has erred in law and on facts to uphold the order of the Ld. AO without considering the nature of activity carried out from past several years.
That the Ld. CIT(A) has erred in law and on facts to make the impugned addition u/s 68 without rejecting the audited books of accounts.
That the Ld. CIT(A) has erred in law and on facts in making impugned addition u/s 68 of the Act, however the same was duly accounted in and due tax already paid on the same, thus, leading to dual taxation.
That the Ld. CIT(A) has erred in law and on facts in making impugned addition u/s 68 of the Act, without recording the opinion why the explanation as offered by the appellant was unsatisfactory.
That the Ld. CIT(A) has erred in law and on facts in making impugned addition u/s 68 of the Act neither drawing any adverse inference in the tangible evidence/ submissions as submitted nor getting any tangible/ authentic evidence recorded to make the impugned addition.
That the Ld. CIT(A) has erred in law and on facts in making impugned addition merely based on no receipt of confirmation from the respected parties, however the Ld. AO duly acknowledged the activity carried out by the appellant and no adverse inference was raised therein. 12.That the Ld. CIT(A) has erred in law and on facts in making addition on entire deposit of Rs. 1,15,45,669 in arbitrary manner, however the profit on the same was already offered to tax. 13.That the Ld. CIT(A) has erred in law and on facts in making the impugned addition however the trading result of the same was duly admitted and proceeds have already been part of the turnover, thus leading to high pitched assessment and dual taxation. 14.That the Ld. CIT(A) has erred in law and on facts in making addition of the entire credit into the bank account without extracting real or actual income which was duly depicted in the audited profit and loss account and due tax has already been paid. 15.That the order is bad in law and against the facts of the case.
Page 3 of 5 16.That any other relief or reliefs deemed fit in the facts and circumstances of the case may be granted. 17.The appellant craves leave to add, alter or vary the grounds of appeal before or at the time of hearing.”
2. In this case, assessment order dated 22.03.2023 was passed by the Assessing Officer under section 147 read with section 144B of the Income Tax Act, 1961 (“Act”, for short) whereby the assessee’s total income was assessed at Rs.1,17,66,859/- as against the returned income of Rs.2,21,190/-. In the aforesaid assessment order, the Assessing Officer made an addition of Rs.1,15,45,669/- u/s 68 of the Act on account of cash deposited in bank account. The assessee’s appeal against the aforesaid assessment order was dismissed by the Ld. CIT(A) vide impugned appellate order dated 25.02.2025 of the Ld. CIT(A). The present appeal has been filed by the assessee in Income Tax Appellate Tribunal (ITAT) against the aforesaid impugned appellate order dated 25.02.2025 of the Ld. CIT(A).
At the time of hearing, no one attended the proceedings on behalf of the assessee. Therefore, the appeal was taken up for hearing in the absence of the assessee and is being disposed off on the basis of the material available on record.
The Ld. Departmental Representative (DR) opposed the grounds of appeal and supported the orders of the lower authorities. He contended that the assessee has been thoroughly negligent and did not supply requisite information to the Assessing Officer. Hence, the order passed by the authorities below are justified.
Heard, the Ld. Departmental Representative and perused the material available on record. The Assessing Officer has stated Page 4 of 5 in the assessment order that the assessee had filed certain response to the queries regarding the payments. However, before the Ld. CIT(A) there was no representation on behalf of the assessee and the Ld. CIT(A) without adverting to the grounds of appeal dismissed the appeal of the assessee ex-parte to the assessee. Therefore, looking to the totality of the facts and the material placed before us, we are of the considered view that to sub-serve the principles of natural justice, assessee should be given one more opportunity to represent his case effectively. We, therefore, hereby set aside the impugned order and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving adequate opportunity to the assessee. The assessee would not seek any adjournment without any compelling exigency. The assessee would also co-operate in the assessment proceedings by furnishing requisite information and evidences as and when called for by the AO. Grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order was pronounced in open court on 30/09/2025