The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) imposed a cost to make assessee understand the seriousness of the income tax proceedings.
The assessee is aggrieved by the decision of the Commissioner of Income Tax (Appeal) [CIT(A)] in confirming the addition of Rs. 96.71 lakhs relating to unexplained bank deposits added by the Assessing Officer under Section 69A of the Income Tax Act, 1961.
The Assessing Officer received information that the assessee has deposited cash of Rs. 86.33 lakhs in his bank account maintained with Punjab & Maharashtra Cooperative Bank during the demonetarization period. The assessee did not file the return of income and also did not respond to various notices issued by the Assessing Officer.
Therefore, the Assessing Officer proceeded to complete the assessment to the best of his judgment under Section 144 of the Income Tax Act and assessed the amount as the income of the assessee under Section 69A of the Income Tax Act. The CIT(A) also dismissed the appeal of the assessee by confirming the addition made by the Assessing Officer.
The assessee neither appeared nor furnished any written submissions. The CIT(A) was constrained to pass an ex-parte order since the assessee failed to cooperate with him. However, the natural justice would require that the assessee should be heard before deciding anything against him.
The Two-member bench comprising of B.R. Baskaran (Accountant member) and Sandeep Singh Karhail (Judicial member) held that the assessee may be provided with one more opportunity to present his case properly before the CIT(A).
The assessee should be imposed a cost in order to make him understand the seriousness of the income tax proceedings. A cost of Rs. 2000/- was imposed upon the assessee, which shall be paid to the credit of the income tax department as ‘other fees’ within two months from the date of receipt of this order.
The order passed by the CIT(A) was set aside and restored all the issues to this file for examining them afresh, after affording adequate opportunity of being heard to the assessee. The assessee was also directed to fully cooperate with the CIT(A) for expeditious disposal of the appeal. Thus, the appeal filed by the assessee was allowed for statistical purposes.
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