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Facts
For AY 2017-18, the assessee made cash deposits of Rs. 18,50,000/- during the demonetization period. Despite notices issued by the AO u/s 142(1), the assessee allegedly did not respond, leading to a scrutiny assessment u/s 144 where additions were made under sections 69A and 44AD. The CIT(A) upheld these additions, prompting the assessee to appeal before the Tribunal.
Held
The Tribunal noted the assessee's claim of not receiving notices from the AO, thereby being denied an adequate opportunity of being heard. To uphold the principles of natural justice, the Tribunal set aside the orders of the lower authorities and restored the matter to the file of the AO for a *de novo* assessment, ensuring the assessee is given a proper opportunity to present its case.
Key Issues
Whether the assessee was afforded adequate opportunity of being heard during the assessment proceedings. Validity of additions made under sections 69A and 44AD, and invocation of section 115BBE, given the alleged lack of proper hearing.
Sections Cited
Section 250, Section 142(1), Section 144, Section 69A, Section 44AD, Section 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI KUL BHARAT
O R D E R PER KUL BHARAT, JM:
This appeal, preferred by the assessee, is directed against the order of the learned CIT (A), National Faceless Appeal Centre (NFAC), Delhi, dated 29.09.2023, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal:
That the order of learned Commissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case.
That the learned Commissioner of Income Tax (Appeals), has erred in stating that adequate opportunity of being heard was given to the appellant in the assessment proceedings.
3. That the learned Commissioner of Income Tax (Appeals) has erred in passing the order u/s 250 without providing any proper opportunity of being heard to the appellant. 4. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the decision of the assessing officer of estimating the net profit at the rate of 8% on cash deposits of Rs. 49,62.300/-. 5. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the addition of Rs. 18,15,000/- u/s 69A treating the same as unexplained money. 6. That the learned Commissioner of Income Tax (Appeals), has erred in confirming the decision of the Id. AO that Rs. 18.15,000/- are not sale proceeds of fertilizers. 7. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the invocation of section 115BBE of the Act on the addition of Rs. 18.15, 000/- u/s 69A. 8. The above grounds of appeal
are without prejudice to each other
9. The Appellant craves leave to add, alter, amend and/or modify the above grounds of appeal”
2. Facts, in brief, are that for A.Y. 2017-18 the AO has noticed that during demonetization period the assessee had cash deposits of Rs. 18,50,0000/-. The AO issued notice issued u/s 142(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), however, there was no response on behalf of the assessee. Therefore, the case of the assessee was selected for scrutiny assessment u/s 144 of the Act on the basis that during demonetization period the assessee had cash deposits of Rs.18,50,000/-. Vide order dated 22.11.2019 made u/s 144 of the Act, the AO
Rs. 22,11,984/- by making addition of Rs. 18,50,000/- u/s 69A and Rs. 3,96,984/- u/s 44AD of the Act. Aggrieved against it the assessee preferred appeal before the learned CIT(A) who dismissed the appeal by affirming the action of the AO. Aggrieved against this, now the assessee is in appeal before this Tribunal.
Learned counsel for the assessee at the outset submitted that no notice issued by the AO u/s 142(1) or 144 of the Act was ever received by the assessee and therefore, there was no occasion for the assessee to represent its case before the assessing authority. He submitted that in appeal the learned CIT(A) was not justified in observing that assessee was given adequate opportunity during assessment proceedings. He prayed that orders of the authorities below may be set aside and the matter may be restored to the file of AO for assessment afresh after affording reasonable opportunity to the assessee to represent its case.
Learned DR supported the orders of authorities below.
I have heard rival submissions and perused the material available on record.
The stand of the assessee is that notices issued by the AO were not received by it.
Looking to the above facts, in order to subserve the interests of natural justice and to be fair to both the parties, I am inclined to set aside the orders of authorities below and restore the matter to the file of AO for assessment de novo after affording adequate opportunity to the assessee to represent its case. Grounds are allowed for statistical purposes.
Appeal of the assessee is allowed for statistical purposes only.
Order pronounced in open court on 20th February, 2024.