The Income Tax Appellate Tribunal ( ITAT ), Delhi Bench, recently directed the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (CIT(A)-NFAC) to reassess a case involving alleged unexplained cash deposits by an assessee and to pass a reasoned order by considering the evidence submitted by the said assessee.
The assessee/appellant in this case is Abdul Sattar, an agriculturist and ration depot operator from Muzaffarnagar.
Law and Procedure for Filing of Appeals
The case pertained to an addition of ₹32,37,400 to the assessee’s income under Section 69A of the Income Tax Act 1961 (ITA). The sum represented cash deposits made in his Punjab National Bank savings account during the 2012-13 assessment year. The Income Tax Officer (ITO), Ward 3(3)(1), Saharanpur, initiated reassessment proceedings under Sections 144 and 147 of the tax statute after repeated notices to the assessee went unanswered. This led to an ex parte assessment, where the ITO concluded that the source of the deposits was unexplained.
The assesseee later attributed the cash deposits to proceeds from daily sales and withdrawals for inventory purchases at his ration depot, where he had worked for 40 years selling sugar, kerosene, and food grains for the State Food and Supply Department. Despite these claims, the explanation was not supported by documentary evidence during the initial proceedings. The CIT(A), citing a delay of 176 days in filing the appeal and inadequate justification for the delay, dismissed it without examining the merits of the case.
Law and Procedure for Filing of Appeals
Aggrieved, the assessee approached the ITAT.
When the matter reached the ITAT, the appellant, represented by advocate Shri Ankit Gupta, explained that the delay was caused by logistical challenges, including the transition to new legal representation. The tribunal accepted the explanation for a subsequent 25-day delay in filing the present appeal.
The bench of Judicial Member Madhumita Roy, after examining the case , noted that the appellant’s failure to provide sufficient evidence in the earlier stages should not preclude a fair examination of the case.
Law and Procedure for Filing of Appeals
In its decision pronounced on November 20, 2024, the ITAT set aside the CIT(A)’s dismissal and instructed the authority to reevaluate the case. The CIT(A) was directed to grant the assessee an opportunity to submit evidence substantiating his claims about the source of the deposits and to consider all records before passing a reasoned order.
In result, the appeal was allowed.
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