The Surat Bench of Income Tax Appellate Tribunal (ITAT) remanded unexplained investment under Section 69A of the Income Tax Act, 1961 matter due to notices issued during COVID period which led to the assessee’s non-appearance.
Trupti Ashishkumar Desai, the assessee filed his income tax returns for the assessment year 2011-2012. The assessing officer scrutinized the assessment and made an addition of Rs. 7,00,130 as an unexplained investment under Section 69 of the Income Tax Act, 1961.
The assessment order was passed under Section 144 (best judgment assessment) read with Section 147 (income escaping assessment) of the Income Tax Act. The assessee appealed against the addition, contending that the deposits in her bank account were from explained sources.
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However, the Commissioner of Income Tax (Appeals) ex-parte decision was due to the assessee’s non-appearance. Aggrieved by the CIT(A) decision, the assessee appealed before the Surat bench of ITAT.
The assessee’s counsel argued that the deposits were from explained sources (term deposits). Further, the assessee missed complying with certain notices because CIT(A) issued limited notices, some of which were during the COVID period. Thus, prayed for another opportunity to present the assessee’s case
On the contrary, the revenue counsel contended that many opportunities were provided to the appellant, and it was her failure to attend hearings and comply with notices. The counsel argued that the addition of Rs. 7,00,130 under Section 69 of the Income Tax Act was justified, as the appellant failed to explain the sources of the deposits.
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A single bench led by Judicial Member, Pawan Singh observed that the assessment was made under Sections 144 and 147 due to the assessee’s non-compliance during the earlier proceedings.
The tribunal acknowledged the appellant’s request for another opportunity to present her case and cited the principle of natural justice as a basis for reconsideration. The tribunal observed that substantial rights of the assessee were involved and it would be fair to grant her another chance to present her case.
Therefore, the tribunal set aside the order of the lower authorities and remanded the matter back to the file of the assessing officer. The assessee’s appeal was allowed for statistical purposes.
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