The Raipur bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition under Section 69A of the Income Tax Act, 1961 for the unexplained cash as the assessee adopted an evasive or lackadaisical approach and didn’t participate in the assessment proceedings.
The Assessing Officer observed that the assessee society, during the demonetization period, had made cash deposits of Rs.20,24,520/- in its bank account maintained with Jila Sahkari Kendriya Bank, Maryadit, but had not filed its return of income within the period prescribed under Section 139(1) of the Income Tax Act. Accordingly, notice under Section 142(1)(i) of the Income Tax Act was issued directing the assessee to file its return of income. However, this was not complied with by the assessee.
The assessee once again did not comply with the aforesaid statutory notices issued by the Assessing Officer, a “Show Cause Notice” was issued to it to put forth an explanation as to why the cash deposits of Rs.20,24,520/- may not be treated as its undisclosed income and assessment be completed under Section 144 of the Income Tax Act.
The Assessing Officer observed that the assessee did not respond to the notice on the said date. Accordingly, he was constrained to proceed with the best judgment assessment under Section 144(1)(b) of the Income Tax Act. The assessee had failed to come forth with any explanation as regards the source of the cash deposits in its bank accounts, therefore, the Assessing Officer after treating the same as its unexplained money under Section 69A of the Income Tax Act made an addition in its hands of Rs. 2,47,65,369/-.
The assessee despite having been afforded sufficient opportunity by the Commissioner of Income Tax (Appeal) [CIT(A)], failed to put up an appearance in the course of the proceedings before him. Therefore, the CIT(A) sustained the additions made by the Assessing Officer.
The Authorized Representative submitted that the CIT(A) had grossly erred in dismissing the assessee’s appeal vide an ex-parte order without dealing with the specific issues raised before him. It was further submitted that CIT(A) had not adjudicated the merits involved in the case and had summarily dismissed the assessee’s appeal.
The Departmental Representative submitted that as the assessee was not keen to pursue its case either before the Assessing Officer during the assessment proceedings or before the CIT(A) during appellate proceedings, both the lower authorities had rightly made/sustained the addition.
The Two-member bench comprising of Ravish Sood (Judicial member) and Arun Khodpia (Accountant member) held that it was not a case where the CIT(A) had discarded any material available on the record and summarily dismissed the assessee’s appeal in limine for want of prosecution.
Instead, it was a case where in the absence of any evidence whatsoever, whether documentary or otherwise, which would substantiate that the Assessing Officer was unjustified in treating the cash deposits of Rs.2,47,65,369/- in the assessee’s bank account as its unexplained money under Section 69A of the Income Tax Act, the CIT(A) had rightly sustained the addition made by the Assessing Officer under Section 144 of the Income Tax Act. Thus, the appeal of the assessee was dismissed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
