BOOPATHY,SALEM vs. ITO WARD-1(1), SALEM

Facts apropos are that the assessee is an individual, has deposited a cash of Rs.37,46,100/- during demonetization period and the assessee had not filed the return of income. Assessee did not appear before the Assessing Officer hence failed to explain sources for the cash deposits. Therefore, AO passed order under section 144 of the Income Tax Act, 1961 (In short ‘Act’) dated 25.09.2019 made an addition towards on account of cash deposits during demonetization period on the basis of bank account statement for the A/c No.611905048640.

Aggrieved, the appellant filed the appeal against the order under section 144 of the Act dated 25.09.2019 before the Ld. CIT(A) wherein the assessee did not appear before the first appeal authority. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us.

At the outset, Ld. Counsel for the appellant submitted that Ld. CIT(A) had not properly followed the principles of natural justice. Ld. Counsel for the appellant further prayed that if an adequate opportunity of hearing is given to appellant, appellant would prosecute its case properly before the Ld. CIT(A).

Per contra, the Ld. Sr. Departmental Representative pleaded for dismissal of the appeal on the ground that the assessee failed to appear before the ld. first appellate authority.

We have heard the rival contention and perused the material on record. Though we appreciate the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for adjudication on merits after affording proper opportunity of hearing to the assessee subject to cost of Rs.5000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld. CIT(A). The assessee is directed to substantiate its case forthwith without any fail, failing which Ld. CIT(A) shall be at liberty to proceed with the disposal of the appeal on merits.

In the result, appeal filed by the assessee in 2017-2018 is allowed for statistical purpose.