KALIAMOORRTHY,PUDUCHERRY vs. ITO, WARD 1, PUDUCHERRY, PUDUCHERRY

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 23.11.2023 relevant to the assessment year 2017-18.

Brief facts of the case are that the assessee filed his return of income for the assessment year 2017-18 on 01.03.2018 declaring an income of ₹.54,16,240/-. The case of the assessee was selected for scrutiny under CASS to examine the cash deposit during the demonetization period. Notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was generated on 21.09.2018 and issued through ITBA. Notice under section 142(1) of the Act dated 17.07.2019 also issued to the assessee. On verification of the details collected from the Bank, the Assessing Officer has noted that the assessee had deposited a sum of ₹.62,21,500/- in Specified Bank Notes (SBN) immediately after demonetization. Against the show-cause notice, the assessee has furnished bank details with detailed explanation. After considering the submissions of the assessee, the Assessing Officer has completed the assessment by treating the sum of ₹.36,52,500/- as unexplained investment under section 69 of the Act against the deposit of ₹.58,56,500/-. On appeal, the ld. CIT(A) dismissed the appeal of the assessee for want of prosecution despite various opportunities afforded.

On being aggrieved against the exparte appellate order, the assessee is in appeal before the Tribunal. The ld. counsel for the assessee has submitted that the ld. CIT(A) has failed to consider the detailed facts filed along with grounds of appeal. It was further submission that the assessee was prevented by reasonable cause and thereby he was unable to respond to the notices issued by the ld. CIT(A) and moreover, the ld. CIT(A) has not adjudicated the issue on merits. Thus, the ld. Counsel for the assessee has prayed for affording one more opportunity of being heard to the assessee to substantiate his case before the ld. CIT(A).

On the other hand, the ld. DR supported the orders of authorities below.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The assessee was engaged in trading of IMFL in the name and style of ‘K.S. Wines and Bars’ and also engaged in tours and travels ‘Ramiyaa Travels Services’. From the details furnished by the assessee, the Assessing Officer has noted that the assessee has accepted demonetization currency after 08.11.2016. As the assessee was not authorized to accept demonetized currency against sales, the Assessing Officer treated the same as unexplained money and brought to tax. On appeal, since the assessee could not furnish any written submissions against the notices issued by the ld. CIT(A), the appeal filed by the assessee was dismissed. Before us, the ld. counsel has submitted that due to unavoidable circumstances, the assessee could not respond to the notices issued by the ld. CIT(A) and prayed for affording one more opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 22nd February, 2024 at Chennai.