MADINA RASOOL,GUNTUR vs. INCOME TAX OFFICER , NARASARAOPET

PER S. BALAKRISHNAN, Accountant Member :

This appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [Ld. CIT(A)-NFAC] vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1054476867(1), dated 20/07/2023 arising

2 out of the order passed U/s. 144 of the Income Tax Act, 1961 [the Act],

dated 21/06/2019 for the AY 2017-18.

verification of the data relating to ‘cash deposits during the

demonetization period’ available in AIMS module of ITBA, the Ld. AO

noticed that the assessee had made substantial cash deposits into the

bank account(s) during the demonetization period but not filed the

return of income within the due date specified U/s. 139 of the Act.

Hence, the Ld. AO issued a notice U/s. 142(1) of the Act dated

23/11/2017. Since there was no response from the assessee, the Ld. AO

issued a show cause letter dated 6/6/2019 which was served on the

assessee on 7/6/2019 and called for certain information regarding the

cash transactions made during the demonetization period and was

asked to furnish the evidences. However, there was no response from the

assessee. On perusal of the ITS data of the assessee on ITBA Portal for

the AY 2017-18 as well as the bank account statements obtained from

the concerned banks wherein the assessee is maintaining the bank

accounts, the Ld. AO observed that the assessee has cash credits worth

Rs. 98,90,900/- in his bank account out of which, an amount of Rs.

92,01,400/- was deposited during the demonetization period and

whereas the balance amount of Rs. 6,89,500/- has been deposited in pre

3 and post demonetization period. In connection with the above cash

deposits, the Ld. AO issued a show cause notice and the assessee was

asked to furnish the explanation on or before 21/6/2019. Since there

was no reply from the assessee, the Ld. AO came to a conclusion that the

assessee is not willing to cooperate with the Department and therefore

proceeded to complete the assessment in accordance with the provisions

of section 144 of the Act based on the material available on record. Thus,

the Ld. AO completed the best judgment assessment U/s. 144 of the Act

determining the assessed income at Rs. 98,90,900/- and thereby made

an addition of Rs. 98,90,000/- U/s. 69A of the Act as unexplained cash

deposits during the year and passed the assessment order on

21/6/2019. Aggrieved by the order of the Ld.AO, the assessee filed an

appeal before the Ld. CIT (A)-NFAC. On appeal the Ld. CIT(A)-NFAC

dismissed the appeal of the assessee ex-parte as there was no

compliance to the notices issued to the assessee nor the assessee filed

any written submissions. While dismissing the assessee’s case, the Ld.

CIT(A)-NFAC relied on the judgments of various High Courts. Aggrieved

by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before us

by raising the following grounds of appeal:

4 2. The learned Commissioner of Income-Tax (Appeals) erred in deciding the appeal without providing proper opportunity.

may be remitted back to the file of the Ld. CIT(A)-NFAC because the Ld.

Revenue Authorities did not provide proper opportunity to the assessee

of being heard. The Ld.AR further submitted that Ld. AO did not

consider the submissions made by the assessee in his statement

recorded before the Ld. AO in response to the notice U/s. 131 of the Act

wherein the assessee had explained the sources of cash deposits in the

bank account to the tune of Rs. 98,90,000/- in the AY 2017-18 and

passed the exparte order. Therefore, the Ld. AR pleaded that one more

opportunity may be provided to the assessee of being heard before the

5 Ld. CIT(A)-NFAC to substantiate the claim of the assessee with evidence

following the principles of natural justice.

The Ld. DR on the other hand argued by stating that proper

opportunity was given to the assessee but neither the assessee nor the

assessee’s Counsel failed to appear / made submissions before the Ld.

Revenue Authorities due to which the Ld. Revenue Authorities did not

have any other option but to pass orders based on the materials available

on record. Therefore, the Ld. DR prayed that the order of the Ld. AO and

the Ld.CIT (A)-NFAC need no interference.

Revenue Authorities as well as the material available on record, we find

that though the orders passed by the Ld. Revenue Authorities are ex-

parte, it is apparent that the assessee had not cooperated with the Ld.

Revenue Authorities at the time of hearing. Therefore, the Ld. Revenue

Authorities have no option except to pass the exparte orders. However,

considering nature of issue involved in the appeal as well as the prayer of

the Ld. AR, and in the interest of justice, we hereby remit the matter

back to the file of Ld. CIT (A)-NFAC in order to consider the appeal afresh

and decide the issue on merits by providing one more opportunity to the

assessee of being heard. At the same breath, we also hereby caution the

assessee to promptly co-operate before the Ld. Revenue Authorities in

6 their proceedings failing which the Ld. Revenue Authorities shall be at liberty to pass appropriate orders in accordance with law and merits based on the materials on the record. It is ordered accordingly.

Pronounced in the open Court on 29th November, 2023.

Sd/- Sd/- (दु�वू� आर.एल रे�डी) (एस बालाकृ�णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) �या�यकसद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER Dated : 29.11.2023 OKK - SPS आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- �नधा�रती/ The Assessee – Madina Rasool, 6-1-165-7, Main Road, 1. Krishna Reddy Complex, Narasaraopet, Andhra Pradesh – 522601. राज�व/The Revenue – Income Tax Officer, Ward-1, Narasaraopet, 2. Andhra Pradesh. 3. The Principal Commissioner of Income Tax, आयकर आयु�त (अपील)/ The Commissioner of Income Tax 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, 5. Visakhapatnam गाड� फ़ाईल / Guard file 6. आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam