SHRI AJAZ AHMAD KUCHAI,SRI NAGAR vs. INCOME TAX OFFICER WARD, UDHAMPUR
Facts
The assessee deposited cash, including Rs. 39.38 lakhs during the demonetization period, into his bank accounts. In the absence of a filed return, the Assessing Officer completed an ex-parte assessment u/s 144 of the Income Tax Act, 1961, adding the demonetized cash deposit as unexplained money u/s 69A. The CIT(A) dismissed the assessee's appeal for non-compliance, citing notices issued through the ITBA portal.
Held
The Tribunal condoned a 3-day delay in filing the appeal. It noted that the CIT(A) had not adjudicated the appeal on merits and that there was no evidence of notices being served to the assessee's email ID provided in Form No. 35, only through the ITBA portal. Consequently, the Tribunal remanded the matter back to the CIT(A) for fresh adjudication on merits, directing the assessee to file all necessary submissions and evidence, and ensuring a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without providing a proper opportunity of hearing and ensuring valid service of notices, and whether the addition of unexplained cash deposits during demonetization was correctly sustained without merits adjudication.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 144 of the Income Tax Act, 1961, Section 142(1) of the Income Tax Act, 1961, Section 144A of the Income Tax Act, 1961, Section 69A of the Income Tax Act, 1961, Section 282 of the Income Tax Act, 1961, Rule 127 of IT Rules, 1962, 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
Per Udayan Dasgupta, J.M.:
This appeal is filed by the assessee against the order of ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 04.10.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the Income Tax
Officer, Ward 1, Srinagar dated 07.12.2019 passed u/s 144 of the I.T. Act, 1961.
2 I.T.A. No. 668/Asr/2024 Assessment Year: 2017-18 Condoantion of delay: It is pointed out by the registry that this appeal is filed 2.
belatedly filed by 3 days. In course of hearing, the ld. AR of the assessee explained
the delay to have arisen because of postal delay, the appeal being filed vide registered
post from Srinagar which resulted in delay of three days.
The ld. DR has no objection. As such, considering the submissions of the
assessee’s AR we condone the delay and admit the appeal to be heard on merits.
The grounds of appeal taken by the assessee in Form No. 36 are as under:
“1. The Ld C.I.T (A) passed ex arte order without giving reasonable opportunity of being heard to the assessee.
The lid C.LT (A) erred in law as well as in facts and dismissed the appeal. The total income assessed in assessment order is Rs 3969155/- but in demand order & computation sheet Ld AO has taken Gross Income of Rs 1,58,76,620 that is almost four times of assessed income.
The appellant craves to amend alter or add any additional grounds of appeal before the same is heard and disposed off.”
Brief facts of the case are that the assessee has deposited cash in J & K Bank
A/c Nos. xxxxxx10000 and in xxxxxx00112 totaling to Rs.43,27,449/- (out of which
Rs.39.38 lacs has been deposited during the demonetization period.) In absence of
any return on record, proceedings has been initiated by issue of notice u/s 142(1) of
the Act calling for the return. Subsequently, various notices has been issued and it is
3 I.T.A. No. 668/Asr/2024 Assessment Year: 2017-18 seen from the record that the 5 (five) separate opportunities were allowed on different
dates and the final show cause notice was also issued on 18.10.2019 but
unfortunately, there has not been any representation or response from the assessee
during the entire course of assessment proceedings. Subsequently, the assessment has
been completed as per direction of the Addl. (CIT) u/s 144A of the Act by
determining the total income at Rs.39,69,155/- (including the addition of Rs.39.38
lacs u/s 69A of the Act being the unexplained deposit of SBN during demonetization
period.)
The matter was carried in appeal and the ld. CIT(A) dismissed the appeal, on
the grounds that there has not been any compliance to notices issued on 4 (four)
separate occasions, through ITBA portal.
Now, the assessee is in appeal before the Tribunal on the grounds contained in
the memorandum of appeal. The ld. AR of the assessee referring to page no. 3 of the
ld. CIT(A) order (para 4) submitted that the notices from the office of the ld. first
appellate authority has been issued in the ITBA portal and in the e-mail id provided
in the portal itself, but no notices has been issued in the e-mail id stated in Form No.
35, and there has not been any service of notice by post. He further stated that the
assessee is engaged in business and all transactions in the bank account of the
assessee are related to business transactions and the deposit of cash in the bank
4 I.T.A. No. 668/Asr/2024 Assessment Year: 2017-18 account of the assessee during the demonetization period are out of sale proceeds of
regular business transactions plus recovery from outstanding debtors. However, in
absence of any notice being issued in the e-mail id, no representation could not be
made by the assessee before the ld. first appellate authority and he prays that since
notices has not been issued as per provisions of section 282 of the Act (read with rule
127 of IT Rules, 1962), the appeal has been disposed of without any proper
opportunity of hearing to the assessee. He prays for fresh opportunity of hearing
before the ld. first appellate authority.
The ld. DR relied on the order of the ld. CIT(A) but has no objection if the
matter is remanded back to the ld. CIT(A) for fresh adjudication.
We have heard the rival submissions and considered the material on record and
we find that the ld. CIT(A) has not adjudicated on the grounds contained in Form No.
35 on merits of the case, in absence of any representation or an documentary
evidences being filed before him. It is also seen that the notices has been issued by
the ld. first appellate authority in the ITBA portal and there is no evidence of issue of
notice in the e-mail id provided in Form No. 35.
As such, considering the entire factual aspect of the matter, we remand the
matter back to the files of the ld. CIT(A) for fresh adjudication on merits of the case
on the grounds contained in Form No. 35 and we direct the assessee to file all
5 I.T.A. No. 668/Asr/2024 Assessment Year: 2017-18 necessary submissions, explanations and documentary evidences, to establish the
source of cash deposit in the bank account during the demonetization period to the
satisfaction of the ld. CIT(A). The assessee will be allowed reasonable opportunity of
being heard.
We have not expressed any opinion on merits.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate
Tribunal) Rules, 1963 as on 29.05.2025
Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order
