The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently quashed the addition of Rs.34 Lakh made by an Assessing Officer to the income of an Assessee on account of unexplained cash deposit. The ITAT while adjudicating the matter also refuted the actions of the lower adjudicatory bodies in not permitting the Assessee to adduce additional evidence that had been contended to be integral to the case at hand.
The Income Tax Appeal before ITAT was filed by Mihir Bhoj Post Graduate College, an Uttar Pradesh based institution, against the order of the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre ( CIT(A)-NFAC ), New Delhi. The CIT(A) Order aligned with the Decision passed by the Income Tax Officer (Exemption), Ghaziabad whereby an amount of Rs.34,81,180/- had been ascribed to the income of the Assessee as unexplained cash deposit.
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Prior to the institution of this case, the Jurisdictional Assessing Officer had served the Assessee with multiple notices under Section 142(1) of the Income Tax Act, 1961 and confirmed the addition of Rs. 34 Lakh as Unexplained Cash Deposit. Subsequently in Appeal, the CIT(A) observed that the Assessee had failed to file their returns of income and carry out sufficient compliance and rejected the Assessee’s application for admission of additional evidence under Rule 46A of the Act.
Counsels appearing for the Assessee, Somil Aggarwal and Deepesh Garg submitted before the ITAT Bench that the additional evidence filed before the CIT(A) goes to the root of the matter and that the present matter may not be appropriately adjudicated unless the same is admitted by the Bench.
The Delhi Bench of the Income Tax Appellate Tribunal solely presided over by Madhumita Roy, Judicial Member observed that the Assessee had not been able to prepare the additional evidence in time for submission to the AO; since the Assessee is now prepared with the additional evidence, the ITAT Bench proceeded to admit the additional evidence.
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In light of the observations made, ITAT set aside the matter and redirected the file back to the concerned AO with a direction to adjudicate the matter afresh. Further instructions were issued to the AO to entertain the additional evidence and any other evidence that may be produced by the Assessee at the time of hearing.
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