ITAT gives Second Chance to Fruit Trader in Rs.28 Lakh Demonetization Case Over Procedural Lapses [Read Order]

The Income Tax Appellate Tribunal (ITAT), Panaji Bench, has granted relief to a fruit trader by remanding the matter back to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication in a case involving cash deposits of Rs.28.01 lakh made during the demonetization period.

Salim Ali Darugar, a resident of North Goa and engaged in retail fruit trading, had filed the appeal against the order of the CIT(A) which upheld the addition made under Section 69A of the Income Tax Act. The Assessing Officer had initiated proceedings under Sections 143(2) and 142(1) based on data from the ITBA system indicating significant cash deposits in bank accounts during the financial year 2016–17, particularly in the demonetization window. The assessee had made cash deposits aggregating to Rs.28,01,500(28.01 Lakh).

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Due to the assessee’s non-compliance and failure to file a complete explanation regarding the source of cash deposits, the Assessing Officer completed the assessment ex-parte under Section 144 of the Act and treated the cash deposits as unexplained money under Section 69A. The total assessed income was determined at Rs.36,97,747(36.97 Lakh).

On appeal, the CIT(A) found that the assessee had again failed to respond to notices or furnish additional evidence. As a result, the appeal was dismissed, and the addition made by the Assessing Officer was sustained. Aggrieved by the dismissal, the assessee approached the ITAT and argued that he had a valid explanation supported by documents but was unable to present them due to certain circumstances. He requested another opportunity to submit the necessary details.

The Revenue, represented by  Manikandan S, opposed the appeal and supported the findings of the CIT(A). However, the Tribunal, after hearing both parties, noted that principles of natural justice warranted another opportunity for the assessee to defend his case. The Bench observed that the CIT(A) had passed the order based on lack of appearance and compliance, and thus, in the interest of fairness, the matter should be reconsidered.

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The Division Bench comprising Pavan Kumar Gadale (Judicial Member) and G.D. Padmahshali (Accountant Member) set aside the CIT(A)’s order and remitted the case back for fresh adjudication. The Tribunal directed that the assessee be provided adequate opportunity to submit evidence and cooperate with the proceedings.

In Conclusion, the Tribunal allowed the appeal filed by the assessee, Salim Ali Darugar, for statistical purposes and directed the lower authorities to provide him a fresh opportunity to present evidence.

To Read the full text of the Order CLICK HERE

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