The Income Tax Appellate Tribunal (ITAT), Visakhapatnam recently remanded a case dismissed in limine by the Commissioner of Income Taxes (Appeal) – National Faceless Appeals Centre (CIT(A)-NFAC) for non-appearance of the Assessee, while directing the CIT(A) to consider the appeal afresh.
The Appellant-Assessee, Anuradha Reddy made cash deposits of Rs. 34 lakhs in her account with Karur Vysya Bank, Gudivada during the demonetization period.
The Assessee was subsequently served with Notice under Section 142(1) of the Income Tax Act, 1961 calling on the Assessee to file Income Tax Returns for the Assessment Year (A.Y.) 2017-18; another notice under Section 142(1) was issued requiring the Assessee to furnish certain information regarding the sources of the cash deposits made during the demonetization period.
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Subsequently, the Assessee filed a letter including a copy of the Assessee’s Returns during A.Y. 2017-18 declaring an income of Rs.5,50,000/- and an income of Rs. 36,297/- from ‘other sources’.
The AO refuted the material produced by the Assessee, claiming lack of nexus between the cash deposits and business receipts adduced by the Assessee. The AO proceeded to make additions of Rs. 34,00,000/- U/s. 69A r.w.s 115BBE of the Act and also initiated the penalty proceedings U/s. 271F and U/s. 271AAC of the Act and passed an Assessment Order affirming the same.
Being aggrieved by the Assessment Order confirmed by the AO, the Assessee preferred an Appeal before the CIT(A)-NFAC. During pendency of the matter before the CIT(A)-NFAC, the Assessee failed to appear or make arrangements for representation despite issuance of hearing notice.
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The CIT(A)-NFAC proceeded to dismiss the Assessee’s appeal ex-parte and confirmed the addition by the AO. The present Appeal has been lodged against the order of the CIT(A)-NFAC.
The Income Tax Appellate Tribunal, Visakhapatnam presided over solely by Duvvuru RL Reddy, Judicial Member observed that the CIT(A)-NFAC had no option except to adjudicate the matter ex-parte and dismiss the case in limine owing to the non-appearance of the Assessee.
However, the Bench considered the prayer of the Appellant and echoed the sentiment that the matter should have decided on its merits rather than a complete dismissal.
Concludingly, the Bench remanded the matter back to the file of the CIT(A)-NFAC to consider the appeal afresh while directing the NFAC to pass an appropriate order in accordance with law and on merits while cautioning the Assessee to promptly co-operate in the proceedings.
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