MOHD RAFI,DODA, JAMMU AND KASHMIR vs. INCOME TAX OFFICER WARD, UDHAMPUR

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ITA 561/ASR/2024Status: DisposedITAT Amritsar07 August 2025AY 2017-18Bench: SH. MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA (Judicial Member)3 pages

AI SummaryRemanded

Facts

The assessee deposited Rs. 18.27 lacs cash in bank accounts during the demonetization period but filed no return. An ex-parte assessment was completed u/s 144, treating the cash as unexplained money u/s 69A. The CIT(A) dismissed the assessee's appeal without adjudication on merits, despite the assessee furnishing documents and requesting adjournments, finding the CIT(A)'s observations contradictory.

Held

The Income Tax Appellate Tribunal (ITAT) remanded the matter back to the CIT(A) for fresh adjudication on merits, directing that a proper and reasonable opportunity of being heard be given to the assessee. The assessee was also directed to file all documentary evidences and submissions to explain the source of cash deposits and cooperate in the appellate proceedings.

Key Issues

Whether the CIT(A) erred in dismissing the appeal in limine without adjudication on merits and providing a proper opportunity of being heard; and the treatment of cash deposits during demonetization as unexplained money under Section 69A.

Sections Cited

Section 250 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961, Section 69A of the Income Tax Act, 1961, Section 142(1) of the Income Tax Act, 1961, Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA

For Appellant: Adv. :

Hearing: 16.07.2025Pronounced: 07.08.2025

This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 12.08.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the AO, Udhampur passed u/s 144 of the Act, dated 16.12.2019.

“1. The Ld. CIT (A) failed to consider the request for adjournment raised by assessee on 14-07-2024 and passed the order without giving any final opportunity of being heard.

The Ld. CIT (A) erred in treating Rs. 1827500/- as unexplained money u/s 69A as the said amount was received by the assessee on account of debtor recovery and sales in the normal course of business.”

Brief facts emerging from record are that the assessee has deposited cash in various bank accounts during the demonetization period amounting to Rs.18.27 lacs maintained with J & K Bank and no return has been filed. In absence of any return on record and in absence of any compliance to notice issued u/s 142(1) of the Act the assessment was completed ex-parte on a total income of Rs.24.82 lacs (which includes an amount of Rs.18.27 lacs as SBN deposits and amount of Rs.6.48 lacs as profits from business at percentage of the balance deposits).

In course of appellate proceedings, the appeal has been dismissed by the ld. first appellate authority without any adjudication on the grounds contained in the memorandum of appeal on merits. It is seen from the appellate order that the notices of hearing issued to the appellant on four separate dates and it is also seen that the appellant has furnished documents along with the written submissions on 09.06.2024 and 14.07.2024 (para 1.3 of the appellate order). Subsequently, it is also noted by us submissions made by the assessee by observing that the appellant did not respond both observations being contradictory.