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Facts
The assessee filed their return of income for AY 2017-18, declaring a total income after claiming agricultural income. The case was selected for scrutiny to verify cash deposited during demonetization. The Assessing Officer (AO) made an addition of Rs. 20,21,000/- under section 69A of the Act for unexplained cash deposits.
Held
The CIT(A) decided the appeal ex-parte due to non-compliance with notices by the assessee. The assessee's representative claimed non-receipt of notices due to them going into spam folder and requested the case be remanded. The Tribunal, considering the interest of justice, decided to remit the issue back to the AO for fresh consideration.
Key Issues
Whether the addition made by the AO under section 69A for unexplained cash deposits is justified, especially when the assessee claims non-receipt of notices from CIT(A) leading to an ex-parte decision.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.392/Bang/2024 Assessment Year : 2017-18 The Income Tax Officer, Hiresave Vishakantegowda Sujatha, Vs. Ward-2, #666 Shankaramata Road, Hassan-573 201. 2nd Cross, KR Puram Hassan Block, Hassan-573201. PAN – ARSPS 6347 M APPELLANT RESPONDENT
Assessee by : Shri Sukruth N Segu, C.A Revenue by : Shri Ganesh R Gale, Standing Counsel for Department (DR)
Date of hearing : 04.04.2024 Date of Pronouncement : 15.04.2024
O R D E R Per Laxmi Prasad Sahu, Accountant Member :-
This is an appeal filed by the assessee against the order passed by the NFAC, New Delhi dated 08/01/2024 in DIN No. ITBA/NFAC/S/250/2023-24/1059476365(1) for the assessment year 2017-18.
The sole and substantive issue raised on various grounds relates to challenging the addition made u/s 69A of the Act in regard to cash
ITA No.392/Bang/2024 Page 2 of 5 deposited during demonetization period for Rs. 20,21,000/- into the bank account of the assessee.
The brief facts of the case are that the assessee is deriving income under the head ‘income from house property and agricultural income’. The assessee filed return of income for the impugned assessment. year 2017-18 on 10/12/2018 declaring a total income of Rs.2,78,314/- after claiming agricultural income of Rs.7,00,000/-. Subsequently, the case was picked up for scrutiny under CASS to verify the source of cash deposited during demonetization period. Accordingly, the statutory notices were issued to the assessee. The assessee submitted certain submissions before the AO but failed to submit certain documents regarding holding of cash deposited during demonetization period of Rs.20,25,000/- in the bank account of the assessee maintained at HDCC Bank, Hassan. During the course of assessment proceedings, it was noted that the assessee had deposited Rs.35,21,000/- SBNs during demonetization period. The AO accepted Rs.15,00,000/- as having the explainable sources of income from agricultural activity. Though the assessee had not given strong and convincing reason for keeping such a huge amount of cash in hand, still the AO partly accepted the submissions of the assessee and confirmed the addition of Rs.20,21,000/- u/s 69A of the Act and completed the assessment.
Aggrieved, the assessee filed appeal before the CIT(A).
ITA No.392/Bang/2024 Page 3 of 5 5. From the Office of the CIT(A) several notices were issued to the assessee but the assessee could not comply any of the notices. Accordingly, the CIT(A) decided the appeal ex-parte on the basis of materials available with him.
Aggrieved, the assessee filed appeal before the ITAT.
The ld.AR of the assessee submitted that assessee did not get any of the notices from the Office of the CIT(A), it might have gone to spam folder, therefore, assessee could not comply to any of the notices. The ld. AR of the assessee undertook that if a chance is given to represent the case of the assessee, he will comply the notices, therefore, the matter may be sent back to the AO to decide the case afresh.
On the other hand, the ld. DR relied on the orders of authorities below and strongly objected in sending back the appeals, since the both the authorities have given ample opportunities to the assessee to comply the notices but the assessee deliberately did not comply any of the notices issued by the CIT(A). Since both the authorities have rightly decided the case of the assessee on merits with the material available with them, it is not necessary to send the file back to the AO.
After considering the rival submissions, we note that the CIT(A) decided the case ex-parte due to non representation from the assessee side. The ld.AR of the assessee submitted that assessee did not
ITA No.392/Bang/2024 Page 4 of 5 get any of the notices from the Office of the CIT(A) and he further stated that it might have been gone to spam folder. The ld. AR of the assessee undertook that if a chance is given to represent the case of the assessee, he will comply with the notices, therefore, the matter may be sent back to the AO to decide the case afresh. Considering the request made by the ld.AR of the assessee and in the interest of justice, we are remitting the issue back to the file of the AO for fresh consideration. The AO is directed to give reasonable opportunity of being heard to the assessee and decide the issue as per law. The assessee is directed to produce the necessary documents for substantiating her case and to avoid unnecessary adjournments for early disposal of the case and update the email, mobile No. and address for communication.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in court on 15th day of April, 2024 Sd/- Sd/- (BEENA PILLAI) (LAXMI PRASAD SAHU) Judicial Member Accountant Member Bangalore, Dated, 15th April, 2024 / vms /
ITA No.392/Bang/2024 Page 5 of 5 Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order
Asst. Registrar, ITAT, Bangalore