Addition of Rs. 21.98 Lakhs as Unexplained Deposit u/s 69A: ITAT Remands Matter to AO [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the matter to the Assessing Officer ( AO ) regarding the addition of Rs. 21.98 Lakhs as an unexplained deposit under section 69A of Income Tax Act,1961.

Rakeshkumar Shamalbhai Sharma,appellant-assessee,filed his return for AY 2012-13 on 29/03/2013, showing an income of Rs. 1,60,050/-. After processing the return under section 143(1), an e-notice under section 148 was issued on 28/03/2019. The AO noticed a cash deposit of Rs. 21,98,124/- in the bank account and observed that the assessee did not file the return in response to the notice.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

Despite several notices under section 142(1), the assessee did not provide evidence for the deposit’s source, leading the AO to add Rs. 21,98,124/- under section 69 as unexplained.The assessee filed an appeal before the CIT(A) against the assessment order, but the CIT(A) dismissed the appeal.

The assessee's counsel explained that the appeal was delayed by 389 days, and an affidavit dated 13/06/2024 was submitted. The affidavit showed that the assessee had asked a relative to file the return, but the relative changed the password for the Income Tax account without informing the Chartered Accountant.

This led to the assessee not receiving the notices and being unaware of them, causing the delay in filing the appeal. Since the reason for the delay seemed genuine, it was condoned. The counsel also asked for the matter to be sent back to the AO, as the assessee could not provide the source of the deposits due to this issue.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The tribunal heard both parties and reviewed the available material. It was noted that the assessee did not explain why he failed to appear before the AO or provide details of the deposit sources on time. The assessee also did not file the return in response to the notice under section 148.

The two member bench comprising Dr.BRR Kumar(Vice President) and Suchitra Kamble(Judicial Member) directed the assessee to pay a cost of Rs. 5,000/- to the Prime Minister’s National Relief Fund within two weeks of receiving the order. The case was sent back to the AO for further review and action. The assessee was instructed to cooperate fully with the AO, or the AO could take appropriate action according to the law.

In short,the appeal filed by the assessee was partly allowed.

To Read the full text of the Order CLICK HERE

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