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Facts
The assessee filed a return of income declaring Rs. 1,79,84,980. During scrutiny, the AO noticed cash deposits of Rs. 31,28,500 during the demonetization period. Out of this, Rs. 3,35,060 was treated as unexplained under section 68 of the Act.
Held
The assessee failed to make compliance with the notices issued by the CIT(A). However, the Tribunal found that there was a bona fide reason for the non-compliance due to unavoidable circumstances and the ongoing Covid pandemic.
Key Issues
Whether the CIT(A) erred in disposing of the appeal without deciding on merits, and if the matter should be restored to the CIT(A) for fresh adjudication.
Sections Cited
68, 115BBE, 143(3), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI AMARJIT SINGH & SHRI SANDEEP SINGH KARHAIL
Assessment Year: 2017-18 Anup Agarwalla ACIT Circle 3(1)(1), Mumbai 84 Maker Chamber No III Vs. Nariman Point, Mumbai- 400021. PAN: AEVPA 3175 P (Appellant) (Respondent) Present for: Assessee by : Shri Tarang Mehta Revenue by : Shri Ram Krishna Kedia, Sr. DR Date of Hearing : 17.09.2024 Date of Pronouncement : 25.10.2024 O R D E R
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
This appeal of the assessee for the assessment year 2017-18 is directed against the order dated 28.06.2024 passed by the ld. Commissioner of Income-tax (Appeal), ADDL/JCIT(A)-1, Bengaluru. The assessee has raised the following grounds of appeal:
“1 On the facts and circumstances of the case, the ld. CIT(A) erred in disposing off the appeal in limine. The CIT(A) is duty bound to dispose off the matter on the merits of the case, even in the case of non-attendance by the appellant. It is therefore prayed that the matter be restored back to the CIT(A) for hearing. 1.1 Alternatively, on the facts and circumstances of the case, therefore the ld. CIT(A) erred in confirming the action of the AO in taxing a sum of Rs. 3,35,060/- u/s 68 r.w.s. 115BBE of the Act on account of alleged unexplained cash deposited in bank (during demonization period out of opening balance) which was computed on mere estimation and ad-hoc basis.
Anup Agarwalla A.Y. 2017-18 2. The appellant craves leaves to add, to alter or amend the grounds of appeal on or before the hearing of the appeal.”
2. Fact in brief is that return of income declaring total income of Rs. 1,79,84,980/- was filed on 04.08.2017. The case was subject to scrutiny assessment u/s 143(3) of the Act. During the course of assessment, the assessing officer noticed that assessee has deposited Rs. 31,28,500/- in cash during the demonetization period on 08.11.2016 to 30.12.2016. The assessing officer was of the view that cash deposits to the extent of Rs. 3,35,060/- out of cash deposits of Rs. 31,28,500/- were not satisfactorily explained. Therefore, the AO has treated the cash deposits to the extent of Rs. 3,35,060/- as unexplained u/s 68 of the Act and added to the total income of the assessee.
The assessee filed appeal before the ld. CIT(A). During the course of appellate proceedings before the ld. CIT(A), assessee has not made any compliance to the notice of hearing issued by the ld. CIT(A), therefore, the ld. CIT(A) has sustained the impugned addition reiterating the finding of the assessing officer.
Heard both the sides and perused the material on record. During the course of appellate proceedings before us, the ld. Counsel submitted that the first notice of hearing was issued during Covid period, therefore, the assessee could not make compliance before the ld. CIT(A). However, the assessee could not make compliance to the other two notices because of some unavoidable circumstances as the assessee was travelling during that period because of some urgent commitment therefore requested that more opportunities be provided before the First Anup Agarwalla A.Y. 2017-18 Appellate Authority for deciding the issue in the appeal of the assessee on merit. We find there is bona fide reason as discussed above because of which the assessee could not make compliance before the ld. CIT(A) therefore in the interest of justice to decide the issue in appeal on merit we restore the case of the assessee to the file of the ld. CIT(A) for adjudication on merit as contemplate u/s 250(6) of the Act after providing 3 more opportunities to the assessee. The assessee is also directed to make due compliance before the First Appellate Authority without any default. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 25.10.2024.