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Facts
The Assessing Officer (AO) made an addition of Rs. 2,77,50,000/- under Section 68 read with Section 115BBE of the Act, related to cash deposits made by the assessee during the demonetization period, which was upheld by the CIT(A). The assessee contended that the CIT(A) passed an ex-parte order without considering the written submissions filed on 23.01.2024, despite an acknowledgment of receipt by the department.
Held
The Tribunal determined that the CIT(A) erred by passing an ex-parte order without taking into account the assessee's submissions, thereby violating the principles of natural justice. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter for fresh adjudication, directing the CIT(A) to provide the assessee with a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in passing an ex-parte order without considering the assessee's filed submissions, leading to the upholding of an addition under Section 68 concerning cash deposits during the demonetization period.
Sections Cited
Section 68, Section 115BBE, Section 139A, Rule 114B, Section 145(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘B’: NEW DELHI
Before: SHRI KUL BHARAT & SHRI BRAJESH KUMAR SINGH
Date of Hearing 08.07.2024 Date of Pronouncement 08.07.2024 ORDER PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi dated 15.02.2024 pertaining to Assessment Year 2017-18.
The assessee has raised following grounds of appeal:-
“1. That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in passing the order without considering the written submissions filed by the appellant on 23.01.2024.
2. That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in passing an ex-parte order, thus violating the core principles of natural justice.
That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in upholding the order of the Assessing Officer whereby an addition to the tune of Rs.2,77,50,000/- u/s 68 was made.
That in view of the facts and circumstances of the case and in law, the Id. CIT(NFAC) failed to appreciate the fact that the deposits in the bank account were out of cash sales and balance in hand during the relevant period.
5. That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in upholding the order of the Assessing Officer without appreciating the evidence submitted regarding variation in cash sales. 6. That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in upholding the order of the Assessing Officer without appreciating that the appellant, under Section 139A of the Act read with Rule 114B, is not bound to maintain the PAN and address of purchasers when the monetary limit of the transaction is less than Rs.2,00,000/- . 7. That in view of the facts and circumstances of the case and in law, the Ld. CIT(NFAC) erred in hypothetically “rejecting” the appellant’s cash book without invoking Section 145(3) of the Act, and then making an addition under section 68 of the Act.” 3. In this case, an amount of Rs.2,77,50,000/- being cash deposited during the demonetization period was added by the AO u/s 68 r.w.s.
115BBE of the Act, which was confirmed by the ld. CIT(A).
3.1. At the time of hearing, the ld. AR submitted before us that the impugned order passed by the Ld. CIT(A) is admittedly as ex-parte one.
The ld. AR filed a copy of notice dated 16.01.2024 of hearing by the Ld. CIT(A) providing final opportunity to the assessee to submit/upload its submission in light of the previous notice/requisition dated 09.01.2024 within seven days of the receipt of the notice for the disposal of the present appeal. It is submitted that the Ld. CIT(A) in para-4 has stated that despite providing multiple notice/letter including dated 09.01.2024, 16.01.2024, 30.01.2024 and 06.02.2024, there has been no compliance on the part of the assessee. In this regard, the ld. AR filed a copy of acknowledgment dated 23.01.2024 of the Department, wherein, it is stated that the response to the notice issued on 16.01.2024 is being submitted as an attachment. The copy of the said acknowledgment is reproduced as under:-
3.2. The ld. AR submitted that this submission was not considered by the Ld. CIT(A) while deciding the appeal and therefore requested that the matter may be set-aside to the file of the Ld. CIT(A) for fresh adjudication for considering the submission filed by the assessee.
4. The ld. DR did not have any objection to the plea of the ld. AR for remitting the matter to the file of the ld. CIT(A) for fresh adjudication.
Having heard both the parties and having regard to the facts and the circumstances of the case, we find that the ld. CIT(A) did not consider the submission of the assessee filed on 23.01.2024 as stated above by the ld. Counsel for the assessee and was, therefore, not correct in holding that there was no compliance by the assessee and thus erred in passing an ex- parte order. Therefore, in order to subserve the interest of justice and to provide an opportunity to the assessee to effectively represent its case, the order of learned CIT(A) is set aside and the matter is restored back to the file of the ld. CIT(A) for adjudication of the same afresh. The Ld. CIT(A) will also grant a reasonable opportunity of being heard before deciding the appeal of the assessee. The grounds of appeal are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.