NFAC Validates AO’s Action without Examining Taxpayer’s Submissions: ITAT remands for fresh Consideration [Read Order]

In a recent ruling, the Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) remands the income tax matter for denovo consideration as the National Faceless Assessment Centre ( NFAC )  confirmed the action of the Assessing Officer ( AO ) without adverting to submissions made by the assessee.

In this case, the assessee, Sunil Jayantilal, did not file his Income Tax Returns ( ITR ) for the assessment year ( AY ) 2017-18.  A notice was issued under Section 142 ( 1 ) of the Income Tax Act, 1961, by the Assessing Officer ( AO ) after receiving information about the fact that the appellant had made cash deposits in the bank account maintained with AXIS Bank during the demonetization period, demanding the assessee to file his ITR.

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There was no response on the part of the assessee, and thus the AO completed the assessment with the available information under Section 144 of the Income Tax Statute, by bringing to tax cash deposits as unexplained income of Rs. 37,12,324.

The Commissioner of Income Tax ( Appeals ) [ CIT ( A ) ] confirmed the action of the AO.

It was submitted by the counsel on behalf of the assessee that the assessee had filed detailed explanations with regard to the source of the cash deposits into AXIS Bank, but the CIT( A ) confirmed the action of the ao without considering the submissions and evidence made by the assessee.

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The ITAT bench, comprising Mr. Inturi Rama Rao ( Accountant Member ) remanded the file back to the AO for proper verification of the evidence filed by the assessee before the CIT (A) after providing a reasonable opportunity for the assessee to explain his case.

The ITAT bench partly allowed the appeal filed by the assessee.  The assessee was represented by Mr. S Rama Rao and the department by Mr. Aravindakshan.

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