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Facts
The assessee's case was selected for scrutiny due to large cash deposits during the demonetization period and an abnormal increase in sales turnover, leading to an addition by the AO under Section 143(3). The assessee failed to respond to notices issued by both the AO and the CIT(A) during the appellate proceedings, resulting in adverse orders.
Held
The Tribunal acknowledged the assessee's repeated failure to respond to notices but, for the ends of justice, granted one more opportunity of hearing before the CIT(A). This opportunity is subject to the assessee depositing Rs. 10,000/- into the Prime Minister's Relief Fund within 45 days and submitting proof thereof. The issue on merits is restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the assessee was granted a reasonable opportunity of hearing by the lower authorities, and whether the addition made based on unexplained cash deposits during demonetization should be re-examined.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES: G : DELHI
Before: DR. B.R.R. KUMAR & SHRI ANUBHAV SHARMA
BEFORE DR. B.R.R. KUMAR, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER Assessment Year: 2017-18 Shiv Kumar & Sons, HUF, Vs ACIT, 3990, 2nd Floor, Naya Bazar, Circle-46(1), New Delhi – 110 006. New Delhi. PAN: AAOHS4079R (Appellant) (Respondent) Assessee by : Shri Gurjeet Singh, CA Revenue by : Shri Javed Akhtar, CIT-DR Date of Hearing : 07.02.2024 Date of Pronouncement : 16.02.2024 ORDER PER ANUBHAV SHARMA, JM:
This appeal preferred by the assessee is against the order dated 02.08.2023 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No.CIT(A), Delhi-16/10529/2019-20 arising out of the appeal before it against the order dated 27.12.2019 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ACIT, Circle-46(1), Delhi (hereinafter referred to as the Ld. AO).
Heard and perused the record. 2.1 At the time of hearing, ld. AR has pointed out that amongst other grounds, the assessee has raised a ground that the assessee was not given a reasonable opportunity of hearing by ld. FAA. The ld. DR has, however, opposed the same and has submitted that before the ld. AO also the assessee had failed to respond by providing necessary details as sought.
On appreciation of the material before us, it comes up that the ld. AO had selected the case of the assessee for scrutiny on the basis of large cash deposits during demonetization period and abnormal increase in sales turnover ratio for which the assessee was called upon to provide necessary details of cash sales, etc. and, after examining the same, addition was made. Before the ld.CIT(A), in spite of two notices the assessee did not respond. The ld. AR has submitted that after notice dated 21.09.2022 and 04.11.2022, the CIT(A) did not wait for three months to pass the order. 3.1 We find no justification in argument raised by Ld. AR. The assessee does not dispute the fact of notices dated 21.09.2022 and 04.11.2022 being issued to the assessee, but, there was no response to the same. The ld. AO and ld.CIT(A) have both found the deposits to be not corresponding to the explanation of the cash sales. However for ends of justice one more opportunity of hearing is 2 allowed to assessee subject to the assessee depositing a cost of Rs.10,000/- with Prime Minister’s Relief Fund, in 45 days of this order and filing the evidence of deposit at the time of hearing before Ld. FAA. Issue on merits stands restored to ld.CIT(A). Appeal is allowed for statistical purposes.