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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 24/09/2024 Date of Order – 26/09/2024
O R D E R PER V. DURGA RAO, J.M.
The assessee has filed this appeal challenging the impugned order dated 16/10/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18.
The assessee has raised following grounds:– “1. On the facts and circumstances of the case and in law, the CIT(A) grossly erred in dismissing the appeal of the Appellant, without giving proper opportunity of hearing which makes the order of CIT(A) violative of principles of natural justice and accordingly liable to be set aside as per law and in the interest of justice.
2. On the facts and circumstances of the case and in law, the AO has grossly erred in making and the CIT(A) grossly erred in confirming addition of 2 Sanjay Himmatrao Pannase ITA no.163/Nag./2024 Rs.14,25,000/- representing cash deposit in bank account as unexplained credit ignoring facts and evidence of the case. The addition so made is illegal and deserves to be deleted as per law.
3. On the facts and circumstances of the case and in law, the Appellant having justifiable sources of cash to explain the cash deposited in bank account, the addition made deserves to be deleted as per law.
4. On the facts and circumstances of the case and in law, the addition of Rs.14,25,000/- representing cash deposit in bank account made under section 69A is illegal and which deserves to be deleted as per law.
5. On the facts and circumstances of the case and in law, without prejudice under any case, the addition so made is highly excessive and which deserves to be substantially returned in the interest of justice.
6. The Appellant craves leave to add, amend, alter, vary and / or withdraw the above grounds of appeal with the kind permission of the Hon'ble Tribunal.”
Facts in Brief:– The assessee is an individual filed it return of income for the assessment year under consideration on 13/08/2017, disclosing total income of ` 7,90,340, and the return was processed under section 143(1) of the Income Tax Act, 1961 ("the Act"). The case is selected for scrutiny under CASS. Several statutory notices requesting the assessee to file reply. However, the assessee failed to respond to the notices issued by the Assessing Officer. During the course of assessment proceedings, the assessee was asked to explain the source of cash deposited by him in his saving bank account during the demonetization period. On above notices, the assessee neither filed any reply nor filed any written submission. A show cause notice was issued on 14/11/2019, as to why the cash deposit during demonetization period of Rs.14,25,000, should not be added in your total income, however, the assessee failed to give any reply. Hence, the Assessing Officer held that the assessee has no explanation to offer in respect of the amount of ` 14,25,000, deposited in his bank account in cash and the same stands
3 Sanjay Himmatrao Pannase ITA no.163/Nag./2024 unexplained. Therefore, the Assessing Officer treated the same as unexplained cash credited in his bank account under section 69A of the Act and added the same to the income returned.
The learned CIT(A) dismissed the appeal filed by the assessee by observing as follows:–
“5. Observation & Decision: The grounds of appeal, statement of fact and order of the AO have been carefully perused/ From the assessment order it is seen that case was selected for scrutiny to examine the cash deposit in bank account of the appellant during demonetization period, amounting to Rs.14,25,000/-, During the course of assessment appellant had not represented his case and not furnished any explanation regarding the source of cash deposits in the bank account. Onus was entirely on the appellant to explain the source of fund. In view of fact and circumstances of the case AO considered that amount as unexplained money and added to return income. Appellant filed the appeal but continued not to represent his case before this office. In the grounds of appeal it is just mentioned that he has assessed to tax having income only from salary and filed his return declaring total income of Rs.7,90,340/-. It is submitted that during course of assessment appellant furnished his reply on 05.12.2019, but assessment order was passed a day before making such addition. Fact of the case is that, even during the course of appellate proceeding appellant has not furnished any representation in respect to the additions made, or to take any effort to explain the source of cash deposits in his bank account. In view of the fact of the case, there is no reason to deviate from the stand taken by the AO in the assessment order. Appeal of the appellant is therefore, dismissed by upholding the assessment order of the AO.”
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The learned Counsel appearing for the assessee Shri Kapil Hirani, argued that there was no proper representation before the authorities below. The learned Counsel is ready to provide all the evidences and documents to prove the nature and source of cash deposit and hence he prayed for granting one opportunity to substantiate his case before the authorities below.
The learned Departmental Representative relied upon the order of the authorities below.
We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. We are surprised to note that the learned CIT(A) has dismissed the assessee’s appeal without even bothering to mention about the details of opportunities he has extended. It is not coming out of the order as to whether the assessee was ever allowed a chance to buttress his case. In this view of the matter, we are of the considered opinion that following the principles of natural justice, one last opportunity is hereby granted to the learned Counsel for the assessee to enable him to substantiate his case before the Assessing Officer. Therefore, we set aside the impugned order passed by the learned CIT(A) and restore the entire matter to the file of the Assessing Officer for denovo adjudication on merits after providing reasonable opportunity of being heard to the assessee. The assessee is also hereby directed to appear before the Assessing Officer as and when required without seeking unnecessary adjournments, except in special case. Thus, all the grounds raised by the assessee are allowed for statistical purposes.
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In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 26/09/2024