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Facts
The assessee, a firm dealing in groceries, made significant cash deposits during the demonetization period. The Assessing Officer added Rs. 77,43,500 as unexplained cash credits under Section 68, which the CIT(A) sustained. The assessee appealed, claiming the CIT(A) failed to consider documentary evidence and denied a virtual hearing.
Held
The Tribunal found that the CIT(A) did not properly consider the assessee's submissions and evidence, nor did it address the request for a virtual hearing. Therefore, the Tribunal restored the issue to the CIT(A) for fresh adjudication, emphasizing the need for adequate opportunity of being heard.
Key Issues
The key legal issues are the sustenance of unexplained cash credits under Section 68 and the denial of a proper opportunity of hearing, including a virtual hearing request, by the CIT(A).
Sections Cited
Section 68, Section 143(3), Section 250, Section 143(2), Section 142(1), Section 133(6)
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Income Tax Appellate Tribunal, PANAJI BENCH
ORDER
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the assesse against the order of the NFAC/CIT(A) passed u/sec 143(3) and u/sec 250 of the Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) sustaining the unexplained cash credits u/sec68 of the Act made by the Assessing Officer. The CIT(A) erred in not considering the documentary evidences filed and denied request of virtual hearing through video conferencing under the faceless appeal scheme.
Dundappa Ishwarappa Gadvi...
The brief facts of the case are that, the assesse is a firm engaged as wholesalers of groceries, provision, rice, pulses, sugar, oil cattle feed etc. The assessee has filed the return of income for A.Y.2017-18 on 30.10.2017 disclosing a total income of Rs.68,36,250/- and the case was selected for scrutiny under the CASS. . The Assessing Officer (AO) based on the CASS reasons /information found that the assesse has made cash deposits aggregating to (i) Rs.1,22,82,500/- in Canara Bank and (ii) Rs.1,76,86,000/- in HDFC Bank during the demonetization period in F.Y.2016-17 and notice was issued u/sec143(2) and u/sec142(1) of the Act to furnish the details of sources of cash deposits along with supporting evidence and the assessee has partially complied with details and explaining that such cash deposits are out of accumulated cash balances on account of sale proceeds from the customers prior to demonetization period. Further the A.O. has issued notice U/sec 133(6) of the Act on the parties were cash sales are made during the period. Whereas the A.O. has dealt on the material available on record, reply received in lieu of notice u/sec133(6) of the Act, bank accounts credits and closing cash balances and issued a final show cause notice. The A.O was not satisfied with the explanations and made addition u/sec 68 of the Act of unexplained cash deposits of Rs.77,43,500/- and assessed the total income of Rs.1,45,79,750/- and passed the order u/sec 143(3) of the Act dated 29.12.2019.
Dundappa Ishwarappa Gadvi... 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal
, statement of facts, submissions of the assessee and findings of the AO but has sustained the action of the A.O and dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings. The Ld.AR mentioned that the CIT(A) has not dealt on the details and documents filed and also the request of the assessee made vide acknowledgement dated 24.09.2024 for video conferencing under the faceless appeal scheme was not considered and the Ld.AR supported the submissions with the factual paper book. Per Contra, the Ld.DR supported the order of the CIT(A).
5. We heard the rival submissions and perused the material on record. The crux of the disputed issues envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition u/sec68 of the Act without providing proper opportunity and overlooking the facts and material evidences. The assesse has filed all the details before the lower authorities and the CIT(A) has not considered the documents and information supporting the claim of the assessee. The Ld.AR submitted that the CIT(A) has denied request of virtual hearing through Dundappa Ishwarappa Gadvi... video conferencing under the faceless appeal scheme and referred to the request made in the E-proceeding Response Acknowledgement dated 24.09.2024 placed at Page81& 82 of the paper book. Prima-facie, the CIT(A) has dealt on the findings of the AO and there are no findings on the submissions/evidences of the assesse filed in the proceedings referred and has not allowed the grounds of appeal
. Therefore, considering the overall facts, circumstances and principles of natural justice shall provide with one more opportunity of hearing and accordingly restore the disputed issue to the file of the CIT(A) for afresh adjudication on merits and the CIT(A) shall provide adequate opportunity of being heard to the assessee and the assessee should also cooperate in submitting the information for early disposal of the appeal and the grounds of appeal of the assessee are allowed for statistical purpose.
6. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 17.02.2026.