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Facts
The assessee, a jeweler, declared Rs. 4,35,910 income for AY 2017-18. After scrutiny, the AO assessed total income at Rs. 69,71,091, making additions for Rs. 44.50 lakhs cash deposits during demonetization and Rs. 20.85 lakhs for sundry creditors/advances. The CIT(A) dismissed the assessee's appeal due to non-appearance, without addressing the merits.
Held
The Tribunal found that the CIT(A) dismissed the appeal solely on technical grounds of non-appearance. Considering the significant additions, the Tribunal held that the assessee deserved an opportunity to present its case on merits. It remitted the matter back to the CIT(A) for a fresh decision after providing the assessee with an opportunity of being heard.
Key Issues
Whether the additions under Section 68 for cash deposits during demonetization and for outstanding sundry creditors/advances are sustainable, and if the CIT(A) was justified in dismissing the appeal without considering its merits due to non-appearance.
Sections Cited
143(3), 143(2), 142(1), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI
Before: SHRI S.RIFAUR RAHMAN & SHRI SUDHIR KUMAR
(Assessment Year : 2017-18) Paras Jain HUF, vs. ITO, Ward 43 (1), 158, Sandesh Vihar, Pitampura, New Delhi. New Delhi – 110 034. (PAN : AANHP8779E) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Saurav Rohatgi, CA Shri Rajat Mittal, CA REVENUE BY : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing : 19.11.2024 Date of Order : 27.11.2024 O R D E R
PER S.RIFAUR RAHMAN,AM:
This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax Appeals/National Faceless Appeal Centre (NFAC) (hereinafter referred to 'Ld. CIT (A)' dated 25.03.2024 for AY 2017-18.
Brief facts of the case are, Paras Jain (HUF), the assessee has filed its return of income for the year under consideration declaring income of Rs.4,35,910. The assessee was the proprietor of M/s. Aaradhya Jewellers and deals in the trading of Gold and Diamond jewellery. The return of income was processed u/s 143(3) of the Income-tax Act, 1961 (for short ‘the Act’) and thereafter, the case CASS. The assessee has deposited cash of Rs.44,50,000/- in his bank account during the demonetization period. The Assessing Officer issued and served the notices u/s 143(2) and 142 (1) of the Act on the assessee. The Assessing Officer, after perusing the submissions of the assessee, completed the assessment u/s 143(3) of the Act by assessing the total income at Rs.69,71,091/- thereby raising the tax demand of Rs.53,47,888/- Aggrieved, assessee preferred an appeal before the ld. CIT (A) who vide his 3. impugned order dated 25.03.2024 dismissed the appeal of the assessee due to non-appearance during the appellate proceedings even though several opportunities were granted.
Aggrieved assessee is in appeal before us on the issues of sustenance of addition of Rs.44,50,000/- u/s 68 for cash deposits during demonetization period and Rs.20,85,181/- for outstanding sundry creditors and advance from customers by the ld. CIT (A).
At the time of hearing, ld. AR for the assessee brought to our notice that the ld. CIT (A) decided the issue against the assessee by observing that assessee has not pursued the appeal despite being granted several opportunities and the details are given in the first appellate order and by relying on several decisions, he dismissed the appeal in limine. He submitted that ld. CIT (A) has not decided the issue on merit and prayed that this issue may be remitted back to the ld. CIT(A) with the prayer to give an opportunity of being heard to the assessee. He submitted that there are reasons for assessee for not appearing before the first appellate authority.
On the other hand, ld. DR for the Revenue objected to the submissions of the ld. counsel for the assessee and submitted that assessee has not utilised several opportunities granted by ld. CIT (A).
Considered the rival submissions and material placed on record. We observed that the additions were sustained by the ld. CIT (A) relating to cash deposits during demonetization period and for outstanding sundry creditors and advance from customers, and considering the additions sustained by the ld. CIT (A), in our considered view, assessee should be given one more opportunity of being heard on merit. Therefore, we direct ld. CIT (A) to give an opportunity of being heard to the assessee and decide the issue on merit as per law. We also direct assessee to make proper submissions and appear before the ld.CIT (A) on the date of hearing and cooperate with the tax authorities. Accordingly, the appeal filed by the assessee is allowed for statistical purposes.