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Facts
The assessee challenged the CIT(A)'s order confirming additions made by the AO regarding unexplained cash deposits of Rs. 35 lakhs under Section 69A r.w.s 115BBE, an addition of 2% of turnover (Rs. 33.41 lakhs), and disallowance of Rs. 60,790/- under Chapter VI. The assessee primarily argued that the orders were passed ex-parte and without affording a proper opportunity of being heard.
Held
The Tribunal found that both the AO and CIT(A) had proceeded ex-parte and denied the assessee adequate opportunity to present its case. Upholding the principles of natural justice, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for fresh adjudication, allowing the assessee to explain the source of the deposits.
Key Issues
Denial of proper opportunity of being heard and passing of ex-parte orders by lower authorities; Confirmation of additions for unexplained cash deposits, turnover, and disallowance of Chapter VI deduction without merit.
Sections Cited
69A, 115BBE, Chapter VI
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & SHRI AVDHESH KUMAR MISHRA
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 25.01.2024 for the assessment year 2017-18.
The assessee has raised following grounds of appeal:-
1. “On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is bad-in-law, and without jurisdiction and Id. CIT (A) erred in not holding so.
2. On the facts and circumstances of the case and in law, the CIT (A) erred in not adjudicating the grounds of appeal
on merit.
3. On the facts and circumstances of the case and in law, the CIT (A) erred in passing ex- parte order.
4. On the facts and circumstances of the case and in law, the CIT (A) erred in passing order without providing proper opportunity of being heard.
5. On the facts and circumstances of the case and in law, the order passed by CIT (A) is against the principles of natural justice.
6. On the facts and circumstances of the case and in law, the Id. CIT (A) erred in confirming the addition of Rs. 35,00,000/- made by the assessing officer on the account of alleged unexplained cash deposits u/s 69A r.w.s 115BBE of the Act.
On the facts and circumstances of the case the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 33,41,234/- (being 2% of turnover). 8. On the facts and circumstances of the case, the CIT(A) erred in confirming the addition made by the assessing officer of Rs. 60,790/- on account of disallowance of deduction claimed under chapter VI. The aforesaid grounds of appeal
are without prejudice to each other.”
3. At the outset, apropos to the grounds of appeal, Ld. Counsel for the assessee contended that the impugned order was passed ex-parte to the assessee. The assessee was not given sufficient opportunity by Ld.CIT(A) to represent his case. He submitted that in the interest of natural justice, the matter be remanded back to the file of Assessing Officer (“AO”). He contended that the assessee has a very good case on the merit. He further submitted that deposits are made out of explained source which can be verified by AO.
On the other hand, Ld. Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below.
We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The AO made addition on the basis of cash deposited in the bank account and proceeded to make addition ex-parte to the assessee. Before Ld.CIT(A) also, there was no effective representation on behalf of the assessee. It is stated that sufficient opportunity was not granted to the assessee. The assessee would furnish source of cash deposited in his bank account and same can be verified by AO. Looking to the totality of the facts, we deem it proper to set aside the impugned order and restore the assessment to the file of Assessing Authority to make assessment afresh and afford reasonable opportunity of being heard in the interest of principle of natural justice. Grounds raised by the assessee are accordingly, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.