The Delhi bench of Income Tax Appellate Tribunal (ITAT) disallowed the addition made on income tax return on the ground that the cash deposits are unexplained and hence set aside the exparte decree of the Commissioner of Income Tax (Appeals) [CIT (A)].
The assessee Maha Singh is an individual in whose case notice under Section 148 of the Income Tax Act, 1961 was issued for the reason that Assessing Officer (AO) has received information that assessee had deposited cash amounting to Rs.1,53,70,000 in his Saving Bank account.
The AO framed the impugned reassessment order under Sections 143(3) and 147 of the Income Tax Act and made an addition of Rs.78, 86,270 to the return filed. Aggrieved by the order assessee filed an appeal before CIT (A) which confirmed the addition and dismissed the appealon the ground that the cash deposits are unexplained.
The assessee filed an appeal before ITAT and the Authorized Representative Sumit Singh on behalf of the assessee contended that the appeal has been decided ex parte by CIT(A) and not on merits and further it is submitted that the notices for hearing has been issued at wrong address and therefore assessee did not receive i.e.the address of the assessee mentioned in the order of CIT(A) is ‘Mahuali’ whereas the correct village of the assessee ‘Mehrauli’.
Therefore, the non- appearance before CIT (A) was not due to any malafide intention but for the reason that no notice for hearing was received from CIT (A)’s office.
The Departmental Representative S. L. Anuragisupported the reasoning of lower authorities.
The Bench comprising of Anil Chaturvedi, Accountant Member and Yogesh Kumar US, Judicial Member observed that it is a well settled principle of natural justice that sufficient opportunity of hearing should be offered to the parties and no parties should be condemned unheard, thus CIT (A) has failed to follow the mandate required in Sub Section (6) of Section 250 of the Income Tax Act in dismissing the appeal without considering the issue on merits.
Hence in view of these facts, the Tribunal set aside the impugned order of CIT(A), disallows the addition made and restore the issue to the file of CIT(A) for re-adjudication of the issues after granting sufficient opportunity of hearing to the assessee, and directed the assessee to promptly furnish the details called for by the lower authorities.
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