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Facts
The assessee filed their return of income and the case was selected for scrutiny. The Assessing Officer added back Rs.20 lakhs as unexplained cash deposit u/s. 69 of the Act, which was confirmed by the CIT(A) in an ex-parte order. The assessee claimed that notices from the CIT(A) were not received.
Held
The Tribunal noted that the assessee made cash deposits during the demonetisation period and was unable to explain them before the AO. While the CIT(A) had passed an ex-parte order due to non-compliance, the Tribunal, considering the submissions and in the interest of justice, decided to remit the issue back to the CIT(A) for fresh consideration.
Key Issues
Whether the ex-parte order of the CIT(A) is sustainable when the assessee claims non-receipt of notices and prays for an opportunity to explain the cash deposits.
Sections Cited
69, 115BBE
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the ex parte order dated 16.02.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18.
The brief facts of the case are that the assessee filed return of income on 31.3.2018 declaring total income of Rs.6,07,290. The case was selected for scrutiny and statutory notices were issued to the assessee. The assessee filed details and submissions. The AO noted that assessee is a partner in the firm, Patel Saw Mills and main source of income is salary, interest and share of profit from the firm and there is no other income. The assessee did not furnish any documentary evidence in support of cash deposits during the demonetisation period of Rs.20 lakhs. Accordingly it was added back as unexplained cash deposit u/s. 69 of the Act and applied tax u/s. 115BBE. Aggrieved from the above order the assessee filed appeal before the CIT(Appeals).
The CIT(Appeals) issued various notices on different dates. However, the assessee did not comply any of the notices issued. Accordingly the CIT(A) decided the appeal on the basis of material before him and relying on various judgments dismissed the appeal of the assessee ex-parte. Aggrieved, the assessee filed appeal before the ITAT.
The ld. AR submitted that the notices issued by the CIT(A) were not received by the assessee and the intention of the assessee was not to disregard the notices issued. He further submitted that assessee is a partner in the partnership firm and he had sufficient source of income for proving the cash deposits during the demonetisation period and submitted that if a chance is given to the assessee, he undertook to explain the source of cash deposits and substantiate his case with necessary documents.
The ld. DR opposed to giving another chance to the assessee since the assessee did not respond to various notices issued by the CIT(Appeals). The assessee is a partner and he has no any other source of income and cash deposits were not explained and only furnished Capital Account & Balance Sheet for the year ending 31.03.2016 & 31.03.2017 which is even not signed by the assessee.
After considering the rival submissions, we note that the assessee made cash deposits during the demonetisation period and was unable to explain the same before the AO. The notices issued by the CIT(Appeals) were not represented by the assessee and it is stated that the notices were not received by the assessee. Considering the ld. AR’s submissions and in the interest of justice, we remit the issue to the file of CIT(Appeals) for fresh consideration and decision as per law. The assessee is directed to update its correct email id, telephone/mobile number and communication address in the income tax portal and also intimate the same to the revenue authorities. The assessee is also directed to produce all relevant documents in support of its case and not to seek unnecessary adjournment for early disposal of the case.
In the result, the appeal by the assessee is allowed for statistical purposes.