The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) remanded the case to the Assessing Officer (AO) for a fresh assessment of unexplained income, considering additional evidence submitted by the assessee.
Asrafkhan Kalndrkhan Pathan,the appellant-assessee, filed his income tax return for the Assessment Year 2017-18 on 29/03/2018, declaring a total income of Rs.67,06,240/-. His case was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) to examine cash deposits made during the demonetization period (9th November 2016 to 30th December 2016) and review agricultural income and other financial transactions.
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The AO issued several notices, beginning with one under section 143(2) on 09/08/2018, seeking details and supporting documents. The assessee did not furnish sufficient evidence in response. Consequently, on 21/12/2019, the AO made additions of Rs.17,97,500/- as unexplained cash credits under section 68, Rs.11,74,780/- as unexplained agricultural income, and Rs.32,67,800/- as unexplained investment in a vehicle under section 69.
The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)] against the AO’s additions, and the case was transferred to the National Faceless Appeal Centre (NFAC). Despite notices on 21/10/2023, 07/12/2023, and 04/03/2024, the assessee only requested an adjournment on 22/11/2022 and failed to submit any further responses. Consequently, the CIT(A), in its order dated 19/03/2024, upheld the AO’s additions, citing the lack of new evidence or valid explanation from the assessee.
Disatisfied by the CIT(A) order the assessee appealed before the tribunal.
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The tribunal heard submissions from both the Authorised Representative (AR) and the Departmental Representative (DR), reviewing the affidavits from the assessee and his Chartered Accountant (CA) regarding non-compliance during the assessment and appeal stages.
The assessee, a senior citizen and effectively illiterate, relied on his CAs for tax compliance and was unaware of the issues due to their failures. CA Dhaval Shah acknowledged an unintentional lapse, citing personal stress from his grandmother’s illness and involvement in a criminal case.
The bench accepted the additional evidence submitted by the assessee, which required verification by the AO, including checks on land ownership, agricultural activities, bank statements, and the source of funds for a vehicle purchase.
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The two member bench comprising Suchitra Kamble (Judicial Member) and Makarand V Mahadeokar (Accountant Member) set aside the CIT(A)’s order and restored the matter to the AO for de novo consideration, directing the AO to admit the new evidence and provide the assessee with a fair opportunity to present his case.
In conclusion, appeal of the assessee was allowed for statistical purposes.
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