ITAT deletes ex parte Addition u/s 68 of Income Tax Act made during COVID 19 Pandemic [Read Order]

The Amritsar Bench of Income Tax Appellate Tribunal (ITAT) has deleted the ex parte addition imposed under Section 68 of the Income Tax Act, 1961 made during the Covid-19 Pandemic.

The assessment was completed under Section 144 of the Income Tax Act with addition for depositing cash in the bank account of the assessee. The entire amount was taken as unexplained /undisclosed source of income for the impugned assessment year and addition was made under Section 68 of the Income Tax Act with a total income of the assessee

The assessee Abdul Hamid Khan, was a wholesale trader of livestock, chickens at Batmaloo, Srinagar. Such business was carried on by assessees for a long time and having a shop in the same vicinity where he resided.

The assessee originally filed its income tax return after getting its books of accounts duly audited under Section 44AB of the Income Tax Act on dated 07.11.2017. The case was picked up for limited scrutiny under CASS for reasons on cash deposits. The source of the cash deposit was well explained and it originated from the business of the assessee.

In both stages, the assessee was unable to explain the source of the cash deposit which was a violation of natural justice.

Mohd. Iqbal Untoo, on behalf of the assessee argued that in the 1st appeal the pandemic Covid19 was going on so that the respective counsel was infected and was unable to submit the documents before the authorities.

S.M. Surendra Nath, S who appeared on behalf of the revenue relied upon the order of the lower authorities.

The two-member Bench of M. L. Meena (Accountant Member) and S.H. Anikesh Banerjee (Judicial Member) observed that the assessee's appeal was in hearing during the pandemic of Covid. It is pertinent that the entire amount of cash was duly verified by the auditors of the assessee. Both the assessment and appeal were ex parte and assessee was also denied to explain the source of cash deposit in the bank account

The Tribunal Bench allowed the appeal directing to give a reasonable opportunity to submit the documents in favour of the argument.

To Read the full text of the Order CLICK HERE

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