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Facts
The assessee filed an appeal against the order of the CIT(A) who confirmed the addition made by the Assessing Officer (AO) under section 144 and 250 of the Income Tax Act. The AO had estimated the assessee's income by adding Rs. 1,58,65,599 as unexplained money under section 69A, after the assessee failed to comply with notices and provide information regarding cash deposits.
Held
The Tribunal noted that the assessee had not complied with notices for hearing at multiple stages, leading the CIT(A) to dismiss the appeal ex-parte. However, considering the principles of natural justice, the Tribunal decided to provide the assessee with one more opportunity to present their case.
Key Issues
Whether the addition made by the AO under section 69A as unexplained money was justified, and if the ex-parte dismissal by the CIT(A) without adequate opportunity to the assessee was proper.
Sections Cited
144, 250, 69A, 115BBE, 142(1), 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH
Before: SHRI PAVAN KUMAR GADALE & SHRI OMKARESHWAR CHIDARA
ORDER PER PAVAN KUMAR GADALE, JM:
The assesse has filed the appeal against order of commissioner of Income Tax Appeal NFAC Delhi/CIT(A) passed u/sec 144 and u/sec 250 of the Income Tax Act. The assessee has raised the following grounds of appeal:
(A.Y.: 2017-18) Mahadev Tukaram Kamble, Mumbai 1. The learned CIT(A) is not justified in estimating the income of Rs. 1,58,65,600 by adding Rs. 1,58,65,599 to the total income of the appellant for A.Y 2017-18 by treating the same as unexplained money U/s 69A of the Income Tax Act, 1961 and taxed u/s 115BBE of the act at the rate of 60Percentage. The assessee has sufficient evidences such as the pricelist of AMUL and Ledger account for purchase made during the year, Copy of Bank Statement for details of cash deposit made during the period for your reference. In Subhash Chand Sharma, Agra vs Ito-22, Agra on 31 May, 2019, Considering the facts as discussed above that the cash deposit and withdrawal in the bank account was made regularly by the assessee during the year, it is very reasonable to say that the same was business turnover and therefore only gross profit addition is justified in the facts of the present case. Hence, we are not inclined to agree with the finding of the Ld. CITA.
2.The brief facts of the case are that, the Assessing Officer(A.O) has received information that the assessee in the financial Year 2016-17 has made cash deposits aggregating to Rs.1,58,65,599/- which includes cash deposits of Rs. 23,75,620/- during the demonetization period in the bank account maintained with the Bank of Maharashtra Kandivali (East) branch,Mumbai. The Assessing Officer has issued notice u/sec 142(1) and there was no compliance. Further the AO has issued notice u/sec 133(6) of the Act on the bank to furnish the bank statements of the assesse and the A.O has also issued (A.Y.: 2017-18) Mahadev Tukaram Kamble, Mumbai final show cause notice dated 23-09-2019 to the assesse, to substantiate the sources of cash deposits in the bank account and the assesse has not furnished the information nor complied with the show cause notice. Since, the assesse could not file the details and information on the disputed issues in spite of providing adequate opportunity of hearing. As per information available including the bank statements received from Bank of Maharashtra, the AO has invoked the provisions of section 144 of the Act and made best judgement assessment with addition of Rs.1,58,65,599/- under section 69A of the Act and assessed the total income of Rs.1,58,65,600/- and passed the order u/sec 144 of the Act on dated 09/12/2019.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the Assessment Order and has issued notice of hearing on various dates and since there was no compliance by the assessee to notice. Therefore, the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal. At the time of hearing, none appeared on behalf of the assesse and the Ld. DR relied on the order of the CIT(A).
(A.Y.: 2017-18) Mahadev Tukaram Kamble, Mumbai 4. We heard the Ld.DR submissions and perused the material on record. Prima-facie the CIT(A) has passed order considering the facts that there is no compliance nor appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The CIT(A) has issued notice of hearing on 23.03.2021, 06.07.2023, 02.08.2023, 14.08.2023 and 22.08.2023, referred at Page 4 Para 4 of the CIT(A) order and there was no response and thus the CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assesse has raised grounds of appeal challenging the addition made by the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the facts and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information subject to payment of cost of Rs.5000/- to the Income Tax Department within one month from the date of receipt of the order and produce the proof of payment. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assesse should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of the
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27.08.2024.