ITAT Remands Case as Assessee was not given Final Opportunity to Explain Cash Deposits [Read Order]

The Income Tax Appellate Tribunal (ITAT) Chennai Bench remanded a case back to the Commissioner of Income Tax (Appeals) CIT(A), granting a fresh opportunity to the assessee to explain cash deposits of Rs.15.93 lakh in his bank account. The tribunal ruled that while the assessee had failed to submit supporting documents earlier, the principle of natural justice required that he be given a final chance to substantiate his claim.

Mohamedaseef Abdul Rahim, appellant-assessee whose assessment was completed under Section 144 read with Section 147 of the Income Tax Act, 1961, on December 18, 2019. The Assessing Officer (AO) treated the cash deposits as unexplained income under Section 68, leading to an addition of Rs.15.93 lakh.

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The CIT(A) upheld the AO’s order, stating that the assessee had not provided any documentary evidence to establish the source of these deposits.

The assessee then filed an appeal before the ITAT Chennai, arguing that he was now in a position to substantiate the source of his cash deposits if given another opportunity. The Revenue opposed this request, maintaining that the assessee had already failed to provide the necessary evidence during the initial proceedings.

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The ITAT Chennai ruled that, although the assessee had been negligent in proving his claim earlier, the principle of natural justice warranted another opportunity. The tribunal observed that since the addition was based on unexplained cash deposits, the assessee should be allowed to present supporting documents.

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A Two Member Bench of Manu Kumar Giri(Judicial Member) and Manoj Kumar Agarwal(Accountant Member) set aside the CIT(A)’s order and remanded the case for fresh adjudication, directing the assessee to submit the required evidence without delay.

In Conclusion, the appeal was allowed for statistical purposes.

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