The case ITA 1586/DEL/2020 was filed by Gyan Chand Sharma, Palwal against ITO WARD – 1(3), Faridabad concerning the assessment year 2011-12. The appeal arises out of the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)], Faridabad dated 27/11/2019, which confirmed the reassessment order made by the Assessing Officer (AO) under section 143(3) of the Income Tax Act, 1961.
The appellant, Gyan Chand Sharma, initially filed a return of income declaring Rs.1,82,680/-. The return was processed under section 143(1) of the Act. The reassessment was initiated based on AIR information regarding a cash deposit of Rs.26,87,000/- in the appellant’s bank account, leading to the issuance of a notice under section 148 of the Act.
During the reassessment, the AO noticed unexplained cash deposits amounting to Rs.26,87,000/-. The appellant could not satisfactorily explain these deposits, resulting in an addition of Rs.19,00,000/- under section 69A of the Act. The CIT(A) upheld this addition, leading to the current appeal.
The appellant raised several grounds of appeal, including:
The tribunal, comprising Shri Kul Bharat (Judicial Member), heard the appeal. The appellant did not appear for the hearing, and the notices sent to the registered address were returned unserved. The tribunal decided to proceed with the hearing in the appellant’s absence, based on the material available on record.
The tribunal considered the arguments from the Revenue, represented by Ms. Maimun Alam, Senior Departmental Representative (DR), who supported the findings of the lower authorities. The tribunal noted that the appellant failed to provide a satisfactory explanation for the cash deposits, and the AO’s decision to add Rs.19,00,000/- under section 69A was justified.
The tribunal upheld the decision of the CIT(A) regarding the addition of Rs.19,00,000/-. However, it also noted that the appellant should have been given an opportunity to furnish confirmations from his wife and other individuals who allegedly provided the cash. Therefore, the tribunal set aside the findings on the impugned addition and remanded the issue back to the AO for a fresh decision, with directions to verify the sources of the cash deposits and provide a reasonable opportunity to the appellant.
Regarding the legality of the reassessment proceedings, the tribunal found no infirmity in the reasons recorded by the AO for reopening the assessment. The tribunal concluded that the reassessment was valid and upheld the CIT(A)’s decision on this matter.
In light of the foregoing, the appeal under ITA No. 1586/DEL/2020 was partly allowed for statistical purposes. This order was pronounced in the open court on 17/02/2023.
Signed:
(KUL BHARAT)
JUDICIAL MEMBER
Dated: 17/02/2023
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