CIT(A) Fails to Decide Co-operative Society’s Demonetization Cash Deposit Matter on Merits: ITAT Remands Matter [Read Order]

The Cochin Bench of Income Tax Appellate Tribunal (ITAT) remanded the Cash deposit during the demonetization matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] citing to decide the case on merits. 

Thrissur House Construction Co-op Society Ltd (assessee), a co-operative society, failed to furnish an Income Tax Return (ITR) for the Assessment Year (AY) 2017-2018. The Assessing Officer (AO) found during online verification that the assessee had deposited Rs. 10,73,200/- with Thrissur District Central Co-op Bank during the demonetization period.

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

The Assessing Officer (AO) completed the assessment under Section 144 of the Act, treating the deposit as unexplained money under Section 69A of the Income Tax Act. The AO added Rs. 10,73,200/- to the assessee's total income.

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Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) dismissed the appeal ex parte due to non-prosecution. The CIT(A) relied on the decision of the Bombay High Court in M/s. Chemipol vs. Union of India to justify the dismissal.

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

The single-member bench comprising Shri Inturi Rama Rao, (Accountant Member) observed that Section 250(6) of the Income Tax Act mandates that the CIT(A) must frame points for determination and followed by a detailed and reasoned discussion before passing an order.

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The tribunal also observed that even when dismissing an appeal ex parte, the CIT(A) was obligated and duty-bound to examine the case on merits. The tribunal referred to the Judgement of the Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra which reinstates the appellate authority to decide the matter on merits.

Therefore, the tribunal set aside the order of CIT(A). The tribunal further remanded the case to CIT(A) for fresh adjudication. The tribunal also directed the CIT(A) to dispose of the appeal de novo on merits after granting a reasonable opportunity of hearing to the assessee.

Thereby, the appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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