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Facts
During the demonetization period, the assessee deposited Rs.17,36,500/- in cash into his bank account. The Assessing Officer (AO) issued a notice u/s 142(1) but the assessee failed to file a return. The AO found additional credits in bank accounts totaling Rs.1,62,12,553/-. Despite the assessee's explanation regarding stamp sales and commission, the AO was not convinced about the source of old currency deposits.
Held
The Tribunal found the assessee's explanation for non-appearance before the CIT(A) due to the demise of their tax professional to be reasonable. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for fresh adjudication after providing the assessee a reasonable opportunity of being heard.
Key Issues
Whether the assessee's explanation for non-appearance before the lower appellate authority is justifiable, and if so, whether the matter should be remanded for fresh consideration.
Sections Cited
144, 142(1), 139, 69, 115BBE
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Income Tax Appellate Tribunal, AGRA BENCH ‘DB’ AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH
Date of Hearing 03.04.2025 Date of Pronouncement 03.04.2025 ORDER PER BRAJESH KUMAR SINGH, AM,
This appeal filed by the assessee is directed against the ex-parte order dated 30.01.2024 of National Faceless Appeal Centre, Delhi, relating to Assessment Year 2017-18 arising out of order u/s 144 of the Income Tax Act, 1961 (hereinafter referred to ‘the Act’) dated 19.12.2019 by the Income Tax Officer, Ward-1(3), Gwalior.
Brief facts of the case: The Assessing Officer had information that during the demonetization period from 09.11.2016 to 31.12.2016, the assessee made cash deposit amounting to Rs.17,36,500/- in his bank account number 914020054313844 with Axis Bank. The Assessing Officer issued a notice u/s 142(1) of the Act asking the assessee to prepare a true and correct return of his income for the previous year relevant to the assessment year under consideration. The Assessing Officer noticed that the assessee failed to comply the said notice and the assessee had not filed its regular return of income as per the provisions of section 139 of the Act.
3.1. During the course of assessment proceedings, the Assessing Officer made further enquiry and found that an amount of Rs.1,62,12,553/- has been credited in two bank accounts (as detailed in para-4 of the assessment order) of the assessee. The assessee explained that the source of the above cash deposited was sale of stamp made in cash by the parties which are deposited in the government account and nominal account of commission is received by the assessee. The assessee further submitted that he sells the stamp on behalf of the Government of M.P. Registration of stamp departments and his income was only commission income and not the cash deposited in the two bank accounts. The Assessing Officer perused the reply of the assessee and observed that the assessee had deposited the amounts in old currencies and the sources of continuous deposit of such old currencies were not submitted by the assessee.
Thereafter, the Assessing Officer issued a show-cause notice u/s 10.12.2019 fixing the case for hearing on 17.12.2019 (which is reproduced in para no. 6 of the assessment order) asking the assessee as to why the addition as proposed in the show-cause notice should not be made. The AO noticed that in reply, the assessee submitted that same submission as made earlier, which did not convince the AO and the AO observed that source of cash deposits during the demonetization period was not explained. Accordingly, the AO passed the assessment order u/s 144 r.w.s 142(1) of the Act by making following additions:- a Unexplained Money under Section 69, read Rs.31,89,928/- with Section 115BBE of the Income Tax Act, 1961:- as per 7(b) b Unexplained Money under Section 69, read Rs.17,36,500/- with Section 115BBE of the Income Tax Act, 1961:- as per 7(b) c Commission income:- as para 7(a) Rs.1,65,056/- d Assessed Income Rs.50,91,484/-
Against the said order, the assessee filed an appeal before the Ld.
CIT(A). The ld. CIT(A) also dismissed the appeal of the assessee on the ground that the assessee did not appear on the dates when the case was fixed for hearing and it was for the assessee to prove his case which he failed to do so.
Against the said order, the assessee is in appeal before us.
We have heard both the parties and perused the material available on record. In ground no.2 of the appeal, the assessee has explained the reasons for non-appearance of the assessee before the Ld. CIT(A), which is reproduced as under:-
“Ground That the delay in filing the appeal is due to the unfortunate demise of the appellant's previous tax professional, who was the registered contact for income tax communications and the appellant became aware of the CIT(A) order only upon receiving a demand notice from the Income Tax Office (condonation request and affidavit attached).” 7. The above explanation of the assessee is found to be reasonable and bona fide. Therefore, in the interest of justice, one more opportunity be given to the assessee to represent his case effectively before the Ld. CIT(A).
We, therefore, set-aside the order of the ld. CIT(A) and restore the matter to his file to pass order afresh after giving a reasonable opportunity of being heard to the assessee. Further, the assessee is also directed to appear before the Ld. CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 3rd April, 2025.