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Facts
The assessee appealed against the CIT(A)'s order confirming an addition of Rs. 1,45,03,160/- made by the AO under section 144 and section 69A for cash deposits in an Axis Bank account of a firm named Royal Impex. The assessee contended that the bank account and deposits did not belong to him, he was a victim of fraud, and he did not receive assessment notices, leading to an ex-parte assessment.
Held
The Tribunal remitted the matter back to the file of the Assessing Officer to decide the issues afresh, directing the AO to provide adequate opportunity of being heard to the assessee. The tribunal noted that the Ld. DR did not object to the proposition of providing the assessee with an opportunity.
Key Issues
Whether the addition of unexplained cash deposits under section 69A was justified when the assessment was ex-parte under section 144, and the assessee claimed fraud and non-receipt of notices, denying ownership of the bank account and transactions.
Sections Cited
144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI YOGESH KUMAR US
ORDER
PER SHAMIM YAHYA, AM :
The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 27.05.2024, relating to assessment year 2017-18 on the following grounds:-
1. That the order passed by the Ld. CIT(A) dated 27.5.2024, dismissing the appeal of the assessee exparte and thereby upholding the assessment order passed under section 144 of the Act is erroneous, bad in law and on facts, and contrary to the principle of natural justice.
2. That the Ld. CIT(A) has erred in law and on facts by confirming the addition made in the impugned assessment order of Rs. 1,45,03,160/- being cash deposited in the Axis Bank account of a firm named royal Impex, treating it as unexplained money of the appellant under section 69A of the Act. 2.1 That the AO and the CIT(A) failed to appreciate that the alleged cash deposit of Rs. 1,45,03,160/- in the Axis Bank account of Royal Impex did not belong to the appellant as the said account was never operated by the appellant, nor the impugned transactions were carried out by him. 2.2 That the AO as well as the CIT(A) also failed to appreciate that the appellant was a victim of fraud committed by two individuals namely, Shri Mayank Jain and Shri Varun Anand, who misused the bank account of appellant and dispute is pending in cirminatl investigation.
2. In this case, AO passed an exparte order u/s. 144 of the Act. AO made addition on account cash deposited appearing in bank account amounting to Rs. 1,45,03,160/-. AO noted that several notices were sent to the assessee, but assesse did not respond.
3. Upon assessee’s appeal, Ld. CIT(A) sustained the addition. He also noted that there was no response from the assessee.
Against this order, assessee is in appeal before us.
We have heard both the parties and perused the records. Ld. Counsel for the assessee pleaded that the notices did not reach to the assessee, hence, assessee could not respond to the notices. Hence, she prayed that assessee may be given an opportunity before the AO to properly canvass his case. Ld. DR did not object the aforesaid proposition. 2 | P a g e 5.1 After considering the aforesaid factual matrix, we are of the considered view, that interest of justice will be served, if the issues in dispute are remitted back to the file of the AO with the directions to decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly.