The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad “B” Bench, upheld the addition of Rs. 70.95 lakh under Section 69A of the Income Tax Act against Kanak Pramukhlal Sandesara for unexplained cash deposits and credit entries in his bank account during the demonetization period.
The case is related to the Assessment Year 2017–18, where the Assessing Officer ( AO ) passed an ex-parte order under Section 144 due to Kanak Pramukhlal Sandesara,the assessee’s repeated non-compliance with notices.
The AO observed that the assessee had deposited Rs. 10.71 lakh in old currency during demonetization and had additional unexplained credit entries of Rs. 60.24 lakh in his bank account.
Despite several notices issued by the AO and the Commissioner of Income Tax (Appeals) [CIT(A)], the assessee failed to file a return of income or provide any explanation or supporting evidence regarding the source of these transactions.
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The CIT(A), National Faceless Appeal Centre ( NFAC ), confirmed the AO’s order after noting that the assessee had not responded to multiple notices or participated in the appellate proceedings.
In the appeal before the ITAT, the assessee again failed to appear and did not appoint an authorized representative to argue the case.
The ITAT rejected the assessee’s adjournment request, citing vague reasons and consistent non-compliance in earlier proceedings.
The tribunal referred to judicial precedents, including the Supreme Court’s rulings in Chuharmal vs. CIT and Srilekha Banerjee vs. CIT, which held that unexplained cash deposits are deemed taxable under Section 69A if the assessee fails to provide a satisfactory explanation.
The ITAT noted that the burden of proof lies with the assessee to substantiate the source of deposits, and in this case, no material evidence was provided.
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Further citing similar cases, including Adim Jati Seva Sahkari Samiti Maryadit v. ITO and Chiranji Lal Bairwa v. ITO, the ITAT emphasized that a lackadaisical approach by the assessee does not entitle them to relief or remand for fresh adjudication.
The tribunal ruled that the assessee’s non-compliance and failure to rebut the AO’s findings left no option but to uphold the additions made under Section 69A of the Income Tax Act.
The ITAT also affirmed that the AO’s decision to tax the unexplained income at 60% under Section 115BBE was justified.
In light of the assessee’s evasive conduct throughout the proceedings, Two Member Bench Comprised of Sidsartha Nautiyal(Judicial Member) and Makrand Vasant Mahadeokar(Accountant Member) dismissed the appeal, finding no merit in the arguments presented.
The appeal was dismissed with no further relief granted to the assessee.
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