The Lucknow Bench Income Tax Appellate Tribunal (ITAT) quashed the addition of Rs. 56.50 lakh made by the Assessing Officer (AO) and the consequential penalty of Rs. 22.37 lakh imposed and directed a fresh hearing for the assessee.
Shri Girja Shankar (assessee), against whom an ex parte assessment order was passed by the Assessing officer (AO). The Total income of the assessee amounted to Rs. 57.03 lakh. The Assessing Officer added Rs. 56.50 lakh due to cash deposits of Rs. 36.50 lakh and Rs. 20 lakh in the bank account of the assessee. The AO also imposed a penalty of Rs. 22.37 lakh for alleged concealment of income.
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Aggrieved by the assessment and penalty orders, the assessee filed appeals before the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the CIT(A) dismissed the appeal of the assessee.
The CIT(A) upheld the order of the AO, observing that the assessee failed to substantiate the source of the cash deposits. The CIT(A) also confirmed the penalty imposed on the assessee by the AO. Aggrieved by the order of the CIT(A), the assessee filed an appeal before the ITAT.
The two-member tribunal bench comprising Anadee Nath Misshra ( Accountant Member) and Subhash Malguria (Judicial Member) observed that the CIT(A) passed an order in a summary manner.
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The tribunal observed the order of CIT(A) with regard to the facts and circumstances of the case as a non-speaking order. The tribunal observed considering the ex parte nature of the order that the assessee should be granted with one more opportunity.
Therefore, The tribunal remanded the matter to the AO for fresh adjudication. The tribunal directed to pass de novo order after providing a reasonable opportunity of hearing to the assessee.
The tribunal further set aside the order of the CIT(A) and quashed the addition of AO and penalty imposed on the assessee.
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The tribunal also observed that the penalty under Section 271(1)(c) would depend on the outcome of the reassessment which will be passed by the Assessing Officer after providing a reasonable opportunity of hearing to the assessee.
The appeal of the assessee allowed for statistical purposes.
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