Unexplained Cash Deposit During Demonetization Added u/s 69A: ITAT Sets Aside CIT(A) Ex-Parte Order [Read Order]

The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) set aside the ex-parte order passed by the Commissioner of Income Tax(Appeals)[CIT(A)] concerning the addition of Rs. 12,48,000 as unexplained cash deposits during demonetization under Section 69A of Income TaxAct,1961.

Akanksha Enterprises Private Limited,appellant-assessee,filed its income tax return on 31.10.2017. The Assessing Officer (AO) completed the assessment on 28.12.2019 and added Rs. 12,48,000 of cash deposits during demonetization as unexplained income under section 69A.

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Penalty proceedings under section 271AAC and interest under sections 234A and 234B were also imposed. The assessee appealed to the CIT(A) but did not submit any written reply or appear for the hearing. As a result, the appeal was dismissed ex-parte on 18 August 2023.

The assessee then filed an appeal with the ITAT.

The assessee counsel asked the Bench to cancel the order and send the case back to the CIT (A) for a fresh decision. The Departmental Representative said the assessee did not provide the documents requested by the AO during the assessment. Because of this, the AO assessed income of Rs. 12,48,000.

The assessee appealed to the CIT(A), who gave many chances, but the assessee did not submit any written reply or evidence. The Departmental Representative also said the assessee did not support its claim before the ITAT and asked the Bench to uphold the CIT(A) order.

The tribunal found that the appeal was filed 65 days late. The Director of the company said in an affidavit that the assessee did not know about the CIT (A) order because the notice was sent to the wrong email address. When the assessee learned about the order, it asked its representative to file the appeal, which caused the delay. The appellate tribunal accepted this reason and allowed the delay.

A single member bench of Duvvuru RL Reddy ( Vice President )heard both sides and reviewed the case records. It set aside the CIT(A) order to ensure fairness and sent the case back for reconsideration, directing the CIT(A) to give the assessee another chance to be heard. The tribunal also warned the assessee to cooperate fully, or the CIT (A) could decide the case based on the records.

In short,the appeal was allowed for statistical purposes.

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