The Surat Bench of Income Tax Appellate Tribunal ( ITAT ) restored the case to the Assessing Officer ( AO ) for a fresh assessment, granting the assessee an opportunity to substantiate cash deposits of Rs. 12,03,000 that were added as unexplained income during the assessment under section 144 of the Income Tax Act, 1961 for the Assessment Year ( AY ) 2017-18.
Mahesh Mohanlal Desai,appellant-assessee,filed an appeal against the order passed by the National Faceless Appeal Centre ( NFAC ) and the Commissioner of Income Tax (Appeals) [CIT(A)] for the AY 2017-18.
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The dispute arose from an assessment under section 144 of the Income Tax Act, where the AO made an addition of Rs. 12,03,000 due to unexplained cash deposits in the assessee’s bank account.
The assessee’s Authorized Representative ( AR ) argued that both the AO and CIT(A) had passed ex parte orders, denying the assessee a fair opportunity to present its case. The AR contended that while the assessee had submitted some details in response to the show-cause notices issued by the AO, the assessment was finalized under section 144 without further consideration.
Furthermore, despite filing an appeal before the CIT(A), the assessee faced delays in receiving notices and had sought adjournments. The AR emphasized that the assessee was willing to pursue the appeal and requested that the matter be restored to the AO for a fresh review to allow the submission of evidence supporting the cash deposits.
The Senior Departmental Representative ( Sr. DR ) for the revenue argued that the assessee had been given multiple opportunities, and the failure to comply could not be justified.
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A single member bench comprising Pawan Singh ( Judicial Member ) after considering the submissions, found that the assessee had not been granted adequate opportunities for presenting its case, especially given that the AO had completed the assessment under Section 144.
The Tribunal emphasized the principles of natural justice and restored the matter to the file of the AO for a fresh decision. It directed the AO to grant the assessee an opportunity for hearing before passing any order and advised the appellant to be more vigilant in future proceedings.
In conclusion, the appeal was allowed for statistical purposes.
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