Continuous Absence of Assessee during Income Tax Appeal Proceedings: ITAT dismisses Appeal [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has dismissed the appeal filed by Somnath Kelavni Mandal, a trust managing educational institution, due to non-prosecution and continuous absence of assessee.

Somnath Kelavni Mandal, which runs various educational institutions, was under scrutiny for cash deposits made during the demonetization period. The case involved ₹51.17 lakh deposited in old currency notes, allegedly collected as school fees from New Gujarat Commerce College and N.K. Solanki School of Commerce. 

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During the assessment, the Income Tax Officer (ITO), Ward Exemption, Baroda, questioned the source of the deposits. The assessee claimed that the amount was from student fees that had remained in hand as of November 8, 2016. However, the Assessing Officer (AO) rejected this explanation as the cash deposits did not match the entries in the cash book. Consequently, the AO treated the amount as unexplained money under Section 69A of the Income Tax Act, 1961, and levied tax accordingly. 

Unhappy with the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], which was heard by the National Faceless Appeal Centre, Delhi. Despite being given five separate opportunities between January 27, 2021, and February 20, 2024, the assessee did not respond to any notices. As a result, CIT(A) upheld the AO’s decision, confirming the addition of ₹51.17 lakh as unexplained money. 

The assessee then moved to the ITAT, filing an appeal against the CIT(A) order dated March 4, 2024. However, the assessee failed to attend hearings on seven occasions, even after being served notices via Registered Post Acknowledgment Due (RPAD). The tribunal noted that the assessee had neither appeared in person nor authorized a representative to argue the case.

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Observing the continued absence of the assessee, the ITAT Bench, comprising Vice President Dr. B.R.R. Kumar and Judicial Member Shri T.R. Senthil Kumar, dismissed the appeal for non-prosecution. The tribunal held that the assessee’s lack of interest in pursuing the matter justified the dismissal. 

With this order, the ₹51.17 lakh deposit remains taxable as unexplained income, and the tax demand raised by the AO stands confirmed.

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