Rs.19 Lakh ‘Unexplained Money’ with Golgappa Vendor: ITAT Remands Income Tax matter Directing Opportunity for Personal Hearing [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chandigarh recently remanded an income tax matter while directing the provision of personal hearing opportunity to a golgappa vendor who landed in a soup, after being slapped with Notices under Section 142(1) of the Income Tax Act, 1961 querying the source of Rs.19 lakh which was classified as ‘unexplained money’ by the revenue.

The assessee is an individual who runs a small golgappa stall. During the  previous year relevant to the Assessment Year (A.Y.) 2017-18, the assessee deposited Rs.19,07,000 in his bank accounts held with Kotak Mahindra Bank and Oriental Bank of Commerce. The assessee was served with notices under Section 142(1) of the Income Tax Act, 1961 but abstained from responding to the same effectively.

As a consequence, the Assessing Officer (AO) concluded assessment under Section 144, and passed order under Section 69A of the Act, making addition of Rs.19,07,000 as unexplained money.

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Aggrieved by the order, the AO preferred an appeal before the Commissioner of Income Taxes ( CIT(A) ), who sustained the original Assessment Order. During the course of the present appeal, it was nearly unanimously agreed upon by both, CA Rajiv Saldi appearing for the Appellant and Dr. Ranjit Kaur, Addl. CIT Sr. DR representing the Revenue that the matter be remanded back to the CIT(A) for fresh adjudication on de novo basis.

The two-member Bench of the ITAT, Chandigarh comprising Vikram Singh Yadav, Accountant Member and Paresh M. Joshi, Judicial Member, held that both the Assessment order under Section 144 and the first appellate order under Section 250(6) to not be meritorious in nature, observing that income computation during a year must be done on real time basis after considering submissions by both the opposing parties.

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Furthermore, the Bench averred that assessees often cause inadvertent delay by failing to cooperate with judicial proceedings even though the Department is time bound to dispose of matters.

Considering all the observations, the Income Tax Appellate Tribunal set aside the impugned orders observing a violation of natural justice and remanded the case back to the file of the CIT(A) to afford a reasonable opportunity of personal hearing to the Assessee before passing any order.

To Read the full text of the Order CLICK HERE

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