ITAT Grants Final Opportunity Citing Demonetization Hardships, Remands Rs. 69A Addition Case Back to CIT(A) [Read Order]

The Income Tax Appellate Tribunal (ITAT) has granted a final opportunity in a case involving additions made under Section 69A of the Income Tax Act, 1961, citing demonetization-related hardships as the reason for non-compliance. The tribunal set aside the order of the CIT(A) and remanded the matter for fresh adjudication.

Vijay Kumar Sharma, a resident of Ranchi, had faced additions under Section 69A after the Assessing Officer completed the assessment under Section 143(3) on October 17, 2019. The assessee had filed an appeal before the CIT(A) in December 2019, but the appeal was dismissed in an ex parte order. The assessee's authorized representative argued before the ITAT that the CIT(A) had not provided a fair opportunity to present the case, as the assessee's business had been severely impacted during the demonetization period, leaving him unable to comply with notices or hire professional assistance.

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The ITAT noted that while the CIT(A) had provided five opportunities to the assessee, the non-compliance was not deliberate or malafide. Partha Sarathi Chaudhury (Judicial Member) observed that the income tax laws operate as welfare legislation and not penal statutes, and thus, the benefit of doubt should be given to the assessee in cases of genuine hardship. The tribunal acknowledged that demonetization had created circumstances beyond the assessee's control, leading to the non-compliance.

In the interest of natural justice, the ITAT directed the CIT(A) to grant one final opportunity to the assessee to present his case and submit all relevant documents. The tribunal emphasized that this would be the last chance for the assessee to substantiate his claims. The appeal was allowed for statistical purposes, meaning the case will now be reconsidered by the CIT(A) afresh.

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The decision highlights the tribunal's role in balancing strict compliance requirements with equitable considerations for taxpayers facing genuine difficulties.

To Read the full text of the Order CLICK HERE

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