REENA SRINIVAS,CHENNAI vs. INCOME TAX OFFICER,WARD-3(3), CHENNAI

This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2023- 24/1054744534(1) dated 31.07.2023. The assessment was framed by the Income Tax Officer, Non Corporate Ward 3(3), Chennai for - 2 - 2017-18 u/s.144 of the Income Tax Act, 1961 (hereinafter ‘the Act’), vide order dated 31.08.2019.

At the outset, it is noticed that the assessment framed by the AO is ex-parte u/s.144 of the Act, making addition as under:- i) Cash deposit of Rs.52,40,523/- treated as business receipt and assessed at the rate of 8% of total non-cash credit and added a sum of Rs.4,19,242/-. ii) The second addition is, addition of Rs.43,67,000/- being demonetized cash deposits i.e., SBNs and treated the same as unexplained money u/s.69A of the Act. The AO framed assessment ex-parte u/s.144A of the Act after issuing show- cause notice by post and e-mail on 13.05.2019 & 18.06.2019. The final show-cause notice was issued on 27.08.2019. As there was no reply or no response, the AO assessed the income as above. Aggrieved, assessee preferred appeal before CIT(A).

The CIT(A) dismissed the appeal ex-parte by noting that the assessee was given opportunities on 06.01.2021, 07.11.2022, 19.03.2023, 12.07.2023 & 19.07.2023. As no response received, the CIT(A) decided the appeal ex-parte by observing in para 8.1 & 8.2 as under:-

When we have gone through the assessment order and the order of CIT(A), we noted that no doubt the assessment was fixed two or three times and appeal was fixed for five times. But it seems that neither the AO nor the CIT(A) has passed the order after making detailed enquiry. The findings of CIT(A) recorded is totally non-speaking and without any basis. He simpliciter dismissed the appeal of assessee for default, which is not permissible in law. Hence, we after hearing the ld.Senior DR and going through the orders of lower authorities, set aside the orders of lower authorities that is, of AO & CIT(A) and remand the matter back to the file of the AO with a direction to re-decide these two issues i.e., assessment of business income being cash deposit of Rs.52,40,523/- and unexplained money being demonetized cash in SBNs u/s.69A of the - 4 - Act, amounting to Rs.43,67,000/-. In term of the above, we remand the matter back to the file of the AO for re-deciding denovo.

The AO is directed to ensure that the assessee has not taken credit of this appeal fee paid of Rs.10,000/- under the head ‘self- assessment tax’. In case, the assessee has taken double credit of this appeal fee, appropriate action may be initiated against the assessee as per law.

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