What did the Tribunal hold?

The Tribunal held that since the assessee had audited books of accounts reflecting the loan, the issue should be examined afresh by the CIT(A) to ensure natural justice. The matter was remanded for a fresh adjudication.

The assessee's return was processed, and later selected for scrutiny. The Assessing Officer made additions for unexplained cash deposits and disallowances due to the assessee's non-appearance. The CIT(A) also dismissed the appeal ex parte for similar reasons.

What were the issues?

Whether the CIT(A) failed to pass a speaking order and whether the cash deposit reflected in audited books of accounts can be considered unexplained.

Nakul Chandra Manna, Purba… vs ITO | ITAT Kolkata 2017

Income Tax Appellate Tribunal, “D”, BENCH KOLKATA

Before: SHRI A.T. VARKEY, JM & DR. A.L.SAINI, AM

Hearing: 14/06/2017Pronounced: 07/07/2017

आदेश / O R D E R

Per Dr.Arjun Lal Saini, AM:

The captioned appeal filed by the Assessee, pertaining to assessment year 2011-12, is directed against the order passed by the ld. Commissioner of Income Tax(Appeals)-7, Kolkata, in Appeal No. 629/CIT(A)-7/Kol/Wd-27(4)/16-17, dated 08.11.2016, which in turn arises out of an order passed by the AO u/s 144 of the Income Tax Act 1961, (hereinafter referred to as the ‘Act’), dated 18.03.2014.

its return of income electronically on 05.03.2012 declaring total income of Rs. 10,57,620/-. The return of income of the assessee was processed u/s 143(1) of the Act. Later on, the assessee’s case was selected for scrutiny u/s 143(2) of the Act and the Assessing Officer completed the assessment by making addition on account of unexplained cash deposit in saving bank account of Rs. 11,00,000/- and the disallowance under Chapter VIA(deduction) of Rs. 77,275/-.The Assessing Officer passed the ex parte order because during the assessment proceedings none appeared on behalf of the assessee. The Assessing Officer sent several notices of hearing but neither the assessee nor his authorized representative appeared before the Ld. Assessing Officer therefore, the Assessing Officer passed the order u/s 144 of the Act as per his best judgment on the basis of the material available on record.

Aggrieved from the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeal) who has dismissed the appeal of the assessee,observing that none appeared on behalf of the assessee during the appellate proceedings. The Ld. CIT(A) issued several notices i.e. notices dated 13.10.2015, 11.05.2016, 12.09.2016, 4.10.2016 etc. But none appeared on behalf of the assessee before the Ld. CIT(A), therefore, the Ld. CIT(A) has passed ex parte order without presence of the assessee and confirmed the addition made by the Assessing Officer.

(Appeals), the assessee is in further appeal before us and has taken following grounds of appeal:

1. That Ld. CIT(A) has failed to appreciate that the cash deposit of Rs. 11,00,000/- in the account from where loan has been obtained and reflected in the Audited Books of Accounts can never be considered as unexplained.

2. That even otherwise Ld. CIT(A) has failed to pass a speaking order.

The Ld. Counsel for the assessee has stated before us that the Ld. CIT(A) has failed to pass the speaking order. The Ld. Counsel further submitted that the assessee had audited books of accounts and loan taken by him is duly getting reflected in audited books of accounts. The Ld. Counsel for the assessee therefore, requested the Bench to send the matter back to the file of the Ld. CIT(A) to adjudicate the issue afresh.

On the other hand, the Ld. DR for the Revenue defended the order passed by the Assessing Officer.

Having heard the rival submissions, perused the material available on record, we are of the view that the assessee has audited books of accountand the loan taken by him is duly getting reflected in the books of accounts. Therefore, in the interest of justice and considering the principles of natural justice we are of the view that this issue should be examined by the Ld. CIT(A) afresh after giving an adequate opportunity to the assessee. Therefore, we direct the assessee to produce the relevant books of accounts and documents/explanation to the Ld. CIT(A) and we direct the assessee to appear before the Ld. CIT(A) on 03.08.2017 and no should participate in the appellate proceedings. We also direct the Ld. CIT(A) to pass a speaking order after giving proper opportunity of being heard to the assessee. Accordingly, we allow this appeal for statistical purposes.

In the result, the appeal filed by the assessee, is allowed for statistical purposes.

Order pronounced in the open court on this 07 / 07 /2017.

NAKUL CHANDRA MANNA,PURBA MEDINIPUR vs. ITO, WD.27(4), HALDIA, HALDIA

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