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Facts
The assessee's appeal concerns an addition made under section 69A of the Income Tax Act for AY 2017-18 concerning cash deposits. The AO completed the assessment by making a significant addition, and the CIT(A) provided partial relief, directing the AO to estimate the addition and treat certain deposits under section 68. The assessee claims the CIT(A)'s order was against natural justice due to insufficient time to provide details.
Held
The Tribunal noted that the assessee had not responded to notices from both the AO and the CIT(A). However, to ensure fairness and provide an opportunity to be heard on merits, the Tribunal decided to restore the issues back to the AO.
Key Issues
Whether the CIT(A)'s ex-parte order was against principles of natural justice and if an opportunity should be granted to the assessee to present their case on merits before the AO.
Sections Cited
69A, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY&
(Assessment Year: 2017-18) Mr. Mukesh Maruti Pawaskar, ITO, Ward-19(2)(3), 4/26, 1st Floor, Shivram Bane Piramal Chambers, Lower Parel, Chawl, Sane Guruji Marg, Vs. Mumbai-400013. Tardeo, Mumbai-400034. PAN : BQRPP3922L Appellant) : Respondent) : Shri Dilip Diwan, AR Appellant /Assessee by : Shri R.R. Makwana, Sr. DR Revenue / Respondent by Date of Hearing : 28.11.2024 Date of Pronouncement : 09.12.2024 O R D E R
Per Padmavathy S, AM:
This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [in short 'the CIT(A)'] dated 28.06.2024 for AY 2017-18. The grounds raised by the assessee are with respect to the addition made under section 69A of the Income Tax Act towards cash deposits made in the bank.
The assessee is an individual and filed the return of income for AY 2017-18 on 02.08.2017 declaring a total income of Rs. 2,45,240/-. The return was selected for scrutiny for verification of cash deposit during the year and the statutory notices were duly served on the assessee. The AO completed the assessment by making an addition of Rs. 2,35,23,822/- under section 69A of the Income Tax Act, 1961 (the Act). Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) passed an ex-parte order since the assessee did not file any details or respond to the notices. The CIT(A) in the appellate order has given partial relief to the assessee by directing the AO to estimate the addition to 10% of the cash deposit made during the period excluding the demonetization period and to treat the cash deposited during demonetization period as addition under section 68.
We heard the parties and perused the material on record. It is submitted that the CIT(A) did not give sufficient time to the assessee to collate the required details and therefore, the order of the CIT(A) is against the principles of natural justice. We notice that the AO has issued several notices to the assessee on his registered email Id and that the assessee has not responded. We further notice that the even before the CIT(A) the assessee did not respond to the notices and filed any further details. However the CIT(A) to meet the ends of justice gave partial relief to the assessee. Considering the facts and circumstances peculiar to the case in the interest of natural justice and fair play, we are inclined to give one more opportunity to the assessee to contend the issues on merits before the lower authorities. Accordingly, the issues are restored back to the AO for fresh consideration on merits with a direction to call for necessary details and decide in accordance with law. The assessee is directed to submit details as may be called for without seeking unwarranted adjournments and cooperate with the assessment proceedings. It is ordered accordingly.
In result, the appeal of assessee is allowed for statistical purposes.