Case Number: ITA 5530/DEL/2019
Appellant: Bhupesh Kumar, New Delhi
Respondent: ITO Ward 43(3), New Delhi
Assessment Year: 2016-17
Result: Appeal Allowed for Statistical Purposes
Case Filed on: 2019-06-24
Order Type: Final Tribunal Order
Date of Order: 2021-07-26
Pronounced on: 2021-07-26
The appeal in this case was filed by Bhupesh Kumar, residing in New Delhi, against the Income Tax Officer (ITO), Ward 43(3), New Delhi. The case pertained to the assessment year 2016-17 and was initially filed on 24th June 2019. The dispute arose due to an alleged unexplained cash difference in Bhupesh Kumar’s balance sheet for the specified year.
Bhupesh Kumar filed the appeal against the ex parte order of the Commissioner of Income Tax (Appeals)-15, New Delhi, dated 7th June 2019. The primary reason for the appeal was to contest the addition of Rs. 22,94,977/- made by the Assessing Officer (AO) under section 143(3) of the Income Tax Act, 1961, due to unexplained cash in hand.
The case was heard before the Income Tax Appellate Tribunal (Delhi Bench ‘SMC-2’) in New Delhi on 26th July 2021. The bench comprised Shri R.K. Panda, Accountant Member. The appellant did not appear despite the issuance of notice through RPAD, and the case was decided based on the material available on record and after hearing the Revenue’s representative, Shri Vijay Kumar Kataria, Sr. DR.
Bhupesh Kumar, an individual, filed his return of income on 30th December 2016, declaring a total income of Rs. 3,45,440/-. The case was selected for scrutiny to verify the cash in hand shown in the income tax return. Notices under sections 143(2) and 142(1) were issued and served on the assessee on different dates.
The AO noted that the assessee could not explain the huge difference of Rs. 22,94,977/- in cash in hand compared to the previous year’s balance sheet. The cash in hand as of 31st March 2015 was Rs. 17,26,593/-, whereas the cash balance as of 31st March 2016 was Rs. 40,21,870/-. Since the difference remained unexplained, the AO made an addition of the same amount to the total income of the assessee.
The assessee did not appear before the CIT(A) despite two opportunities granted. Consequently, the CIT(A) passed an ex parte order sustaining the addition made by the AO.
The tribunal, after hearing the Revenue’s representative and perusing the record, found that the AO made an addition of Rs. 22,94,977/- on the grounds of unexplained cash difference in the balance sheet. The CIT(A), in the ex parte order, sustained the addition made by the AO without affording adequate opportunity to the assessee.
“Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and explain his case without seeking any adjournment under any pretext failing which the ld.CIT(A) is at liberty to pass appropriate order as per law.”
The tribunal allowed the appeal for statistical purposes and directed the CIT(A) to provide one final opportunity to the assessee to present his case.
The case of Bhupesh Kumar vs. ITO Ward 43(3), New Delhi, was concluded with the tribunal restoring the issue to the file of the CIT(A) and granting the assessee a final opportunity to substantiate his case. This outcome highlights the importance of adequate representation and the opportunity to present one’s case in tax disputes.
The order was pronounced by the tribunal member, Shri R.K. Panda, Accountant Member, on 26th July 2021.
Members Present:
SHRI R.K. PANDA, ACCOUNTANT MEMBER
Document Reference:
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)-15, New Delhi
5. DR: ITAT
ASSISTANT REGISTRAR, ITAT NEW DELHI
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform