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Facts
The assessee, who did not file an ITR for AY 2013-14, faced reassessment based on significant cash deposits in HDFC and Axis Bank accounts totaling Rs. 3,14,50,000/- identified through AIR and CIB information. The Assessing Officer made various additions, including unexplained deposits, cash gifts, agricultural income treated as 'Income from Other Sources', and unexplained expenditure. The CIT(A) dismissed the assessee's appeal ex-parte due to repeated non-compliance with hearing notices.
Held
The ITAT set aside the CIT(A)'s ex-parte order, noting that a critical ground regarding limitation was not adjudicated by the CIT(A). The case was remanded back to the CIT(A) for fresh adjudication, with directions to provide the assessee an adequate opportunity of hearing and allow them to furnish all documents/evidences. A token cost of Rs. 5,000/- was imposed on the assessee for their latches in appearing before the CIT(A).
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without addressing all grounds, particularly the ground of limitation. Whether the various additions made by the AO for cash deposits, cash gifts, agricultural income, and unexplained expenditure were justified.
Sections Cited
147, 144, 133(6), 142(1), 69A
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Income Tax Appellate Tribunal, AMRITSAR BENCH, ‘DB’: AMRITSAR
Before: SHRI UDAYAN DAS GUPTA & SHRI BRAJESH KUMAR SINGH
ORDER PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order of National Faceless Appeal Centre (NFAC)/learned Commissioner of Income Tax (Appeals), Delhi (hereinafter referred to ‘ld. CIT(A)’) dated 16.04.2024 pertaining to Assessment Year 2013-14 arising out of assessment order dated 28.03.2022 passed u/s 147 r.w.s 144 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’).
None appeared on behalf of the assessee. However, the assessee had filed a letter dated 26.05.2025, in which it was stated that the facts may be decided on the basis of written submissions filed before the Tribunal, therefore, this appeal is being decided after hearing the ld. Sr. DR and on the basis of written submission of the assessee and on the basis of material available on record.
Brief facts of the case:- The assessment was reopened u/s 147 of the Act vide notice dated 29.03.2021. The Assessing Officer noted that the assessee is an individual and the assessee had not filed return of income for the A.Y. 2013-14. Further, as per information on AIMS module of ITBA under the head "Multiyear NMS" that the assessee had entered into significant financial transactions as mentioned below:
“1. As per AIR information assessee has made cash deposit of Rs.1,34,50,000/- in bank account with HDFC Bank 2. As per CIB information assessee has made cash deposit of Rs.1,80,00,000/- in bank account with HDFC Bank.” 3.1. The AO issued notice u/s 133(6) of the Act to the assessee for examination and verification of the transaction made by the assessee during F.Y.2012-13 relevant to A.Y. 2013-14. Further, the assessee was asked by the AO to furnish the bank account statements of the accounts held by him during F.Y. 2012-13 and to explain the source and nature of income. The AO noted that the assessee failed to file any reply in response to notice u/s 133(6) of the Act dated 20.03.2021 within the stipulated time. Further, the AO noted that from the analysis of AIR and CIB information and after independent verification of the same with records, he found that the assessee had made deposits/ other income investments amounting to as total of Rs.3,14,50,000/- during the F.Y. 2012-13 relevant to the A.Y. 2013-14. Further, the AO noted that as the assessee had not filed his return of income for the A.Y. 2013-14 and therefore Rs.3,14,50,000/- has not been offered to tax by the assessee. On the basis of above information and analysis, the Assessing Officer formed his reasons to believe and reopened the assessment.
3.2. During the assessment proceedings, the assessee filed a written submission dated 28.02.2022 along with copy of return of income, income computation and HDFC Bank account statement. As per the submission of the assessee as reproduced in page no.3 of the assessment order, it was submitted by the assessee that he had deposited of Rs.1,43,70,000/-in two bank accounts (Rs.9,20,000/-) in Axis Bank and Rs.1,34,50,000/- in HDFC bank as against the amount of cash deposit of Rs.3,14,50,000/- stated in the notice u/s 142(1) of the Act dated 07.02.2022 of the AO. It was further submitted by the assessee that the source of said cash deposit (as noted by the Assessing Officer in para no.6 & 7 of his order) was out of agricultural income amounting to Rs.40,00,201/- and withdrawal of Rs.1,21,55,000/- from two bank accounts, Rs.48,40,000/- from Axis Bank and Rs.73,15,000/- from HDFC Bank, which was redeposited in bank accounts many times. The AO noted that the assessee had deposited Rs.9,28,000/- in Axis Bank and Rs.1,34,50,000/- in bank account of HDFC Bank totalling Rs.1,44,28,000/- whereas, the assessee submitted that it had deposited a sum of Rs.1,63,70,000/- in Axis Bank and HDFC Bank. Therefore, the AO added a sum of Rs.19,42,000/- being difference of the said amounts (Rs.1,63,70,000/- - Rs.1,44,28,000/-) u/s 69A of the Act. Further, the AO added a sum of Rs.16,50,000/-, which was claimed as cash gift by the assessee from his father u/s 69A of the Act. Further, the AO did not accept the claim of the assessee of agricultural income amounting to Rs.40,00,211/- as no evidence was submitted and therefore the AO added a sum of Rs.51,99,752/- as ‘Income from Other Sources’ being the agricultural income as well as agricultural expenses claimed by the assessee The AO further added as sum of Rs.57,75,220/-, which was on account of assessee’s claim of withdrawal made to transfer the funds of Rs.43 lakhs from HDFC Bank to Axis Bank and again transfer it to his spouse name and transfer of Rs.14,75,220/- towards residential house payment as unexplained expenditure.
Aggrieved with the said order, the assessee preferred an appeal before the Ld. CIT(A) The ld. CIT(A) decided the appeal ex-parte because as per the facts stated in para-4 of the order that notices were issued to the assessee on 15.11.2022, 19.05.2023, 01.09.2023, 30.01.2024 and 01.03.2024 for hearing when either there was no response from the assessee or the assessee sought an adjournment. The Ld. CIT(A) also decided the appeal on merits by observing that the since, the assessee had chosen not to respond to the hearing notice and had not shown any seriousness, he was left with no option but to decide the appeal on the basis of material available on record. The ld. CIT(A) observed that in absence of any corroborative evidence of material or submission on record and considering the established pattern of non-compliance by the assessee, there was no reason to alter the decision of the AO. He accordingly dismissed the grounds raised by the assessee and dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us by raising the following grounds of appeal:-
i. That the worthy CIT(Appeals)/NFAC erred in law and on facts in dismissing the appeal of the assessee for non-prosecution which was bad in law as held by the Hon'ble ITAT, Pune, "b" bench, in case of shrikant gajanan vyavahare vs.ito on 14/02/2024. ii. That the notice dated 01/03/2024 was not received on the e-mail id of the present counsel and hence the same remained un- responded and on this basis, the appeal was dismissed without considering the material on record which is bad in law and the CIT(A) may kindly be directed to hear the appeal on merits by providing adequate opportunity of hearing to the appellant. iii. That the order of the worthy CIT(Appeals)/NFAC dismissing the appeal for non-prosecution may kindly be set aside with directions to hear the appeal on merits.
As stated earlier, the assessee had filed as written submission before us and the covering letter of the said is reproduced as under:-
The Ld. Sr. DR supported the orders of the authorities below.
We have heard the ld. Sr. DR and perused the material available on record. It is seen from the grounds of appeal filed before the Ld. CIT(A) in Form No.35 that the assessee has taken ground of limitation, which has not been adjudicated by the ld. CIT(A). This ground goes to the root of the matter of the appeal. Further the assessee did not appear before the ld. CIT(A) and has requested for restoring the case to the file of the ld. CIT(A) for deciding the case afresh. Therefore, in the interest of justice, we set-aside the order of the Ld. CIT(A) and we remand this case back to the file of the ld. CIT(A) to decide afresh 8.1. However, we observe that there were some latches on the part of the assessee in not appearing before the Ld. CIT(A) to the various notices issued by the ld. CIT(A) and as such, we impose a token cost of Rs.5,000/- (Rs. Five thousand) on the assessee to be deposited to the credit of the Prime Minister National Relief Fund, within 30 days, (thirty) from the receipt of this order, evidence to be produced before the jurisdictional AO.
8.2 With the above observation and in the interest of justice, we remand this case back to the file of the ld. CIT(A) to decide afresh and we also direct the assessee to appear before the Ld. CIT(A). Further, the assessee is at liberty to furnish all documents/evidences in support of his claim.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced as per Rule 34(4) of the ITAT Rules, 1963 on 25th August, 2025.