Taxpayer Wins Remand Despite Lapses: ITAT Orders New Hearing on ₹34 Lakh Unexplained Credit [Read Order]

The Nagpur Bench of the Income Tax Appellate Tribunal (ITAT) has set aside an ex-parte appellate order and directed a fresh hearing in the case of the appellant, who faced an addition of ₹34,31,971 as unexplained cash credit under Section 68 read with Section 115BBE of the Income Tax Act for the assessment year 2018–19. The Tribunal’s decision comes after both the Assessing Officer and the Commissioner of Income Tax (Appeals) had previously dismissed the taxpayer’s explanations due to lack of documentary evidence.

Kiran Anil Gothi, the appellant, was subjected to scrutiny after the Income Tax Officer, Ward–1, Akola, noticed a commission receipt of over ₹34 lakh in the income tax return. The tax department issued statutory notices seeking details of the commission received, including the identities and PANs of the payers, as well as supporting bank statements. However, the taxpayer failed to respond or furnish the required documents during the assessment proceedings. As a result, the Assessing Officer treated the entire amount as unexplained cash credit and added it to the total income under Section 68, invoking the provisions of Section 115BBE for taxation at a higher rate.

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The matter was then taken to the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, where the taxpayer again did not provide any documentary evidence to substantiate the claim. The CIT(A) dismissed the appeal, emphasizing that the onus was on the taxpayer to prove the genuineness of the transaction, which had not been done. The appellate order reiterated that, in the absence of credible evidence, the addition made by the Assessing Officer was justified.

When the case came before the ITAT, counsel for the taxpayer, Jineshi Thakkar, acknowledged the lapses in responding to the authorities and requested one more opportunity to present the case with proper evidence. The Departmental Representative, Abhay Y. Marathe opposed the plea, arguing that sufficient opportunities had already been provided.

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After hearing both sides, V. Durga Rao (Judicial Member ) noted that while the taxpayer had failed to appear and provide evidence at earlier stages, the appellate order was passed ex-parte. Citing the principles of natural justice, the Tribunal held that the taxpayer should be given one more chance to present the case before the CIT(A). The ITAT set aside the earlier order and remanded the matter to the CIT(A) for fresh adjudication, instructing that a reasonable opportunity of being heard be provided and that the taxpayer should avoid unnecessary adjournments.

The appeal was allowed for statistical purposes, and the matter will now be reconsidered by the appellate authority with directions for a fair hearing.

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