Case Number: ITA 5902/DEL/2019
Appellant: Harish Kumar, Ghaziabad
Respondent: ITO WARD – 1(3), Ghaziabad
Assessment Year: 2010-11
Order Type: Final Tribunal Order
Date of Order: 2021-02-18
Pronounced On: 2021-02-18
Case Filed On: 2019-07-08
This appeal, filed by the assessee, Harish Kumar, is directed against the order dated 28th February, 2019 of the CIT(A), Ghaziabad, relating to the Assessment Year 2010-11. The appellant is challenging the addition of Rs. 17,57,500/- as unexplained cash deposits and the reopening of the assessment under section 147 of the Income Tax Act, 1961.
The grounds of appeal raised by the assessee are as follows:
“1. That on facts and in the circumstances of the case and in law, the Ld. CIT (A), Ghaziabad has erred in confirming the Order passed by the Assessing Officer U/s 147/144 for non compliance with the notices U/s 148 and 142(1) of the IT Act, 1961.
2. That on facts and in the circumstances of the case and in law, the Ld. CIT (A), Ghaziabad has erred in sustaining the addition of cash deposit of Rs 17,57,500/- to the total income of the appellant without considering the facts that impugned Order passed is ex-parte to assessee without material on records.
3. That the Ld CIT (A) also erred in law on facts and surrounding circumstances in out rightly rejecting the application U/s 46A of the Income Tax Act, 1961 without any speaking order in an arbitrary and fanciful manner leading to closure of the doors of justice to the appellant.”
Harish Kumar filed his return of income for the assessment year 2010-11. Information obtained by the AO revealed that the assessee had deposited Rs. 17,57,500/- in a savings bank account during the financial year 2009-10. Verification letters were issued to the assessee on 29th April, 2016 and 20th January, 2017, but no response was received. Consequently, the AO reopened the assessment under section 147 after obtaining necessary approval and issued a notice under section 148 on 24th March, 2017.
Despite several opportunities granted, the assessee did not comply with the notices. The AO proceeded to make an ex-parte assessment and added Rs. 17,57,500/- to the assessee’s income under section 69 of the IT Act. The assessee appealed to the CIT(A), who rejected the additional evidence filed under Rule 46A and dismissed the appeal.
Aggrieved by the order of the CIT(A), the assessee appealed to the Income Tax Appellate Tribunal (ITAT). The case was heard by the Delhi Bench of the ITAT on 18th February, 2021. The Tribunal consisted of Shri R.K. Panda, Accountant Member.
The assessee’s counsel argued that the source of the cash deposits was from the sale proceeds of certain properties and that given an opportunity, the assessee could substantiate the claim with evidence. The Tribunal considered the arguments and found that in the interest of justice, the issue should be restored to the file of the AO for a fresh examination.
The Tribunal noted that the AO had reopened the assessment due to non-compliance with verification letters and statutory notices. The Tribunal also observed that the CIT(A) had rejected the additional evidence without providing a proper explanation. In light of the arguments and the need for a fair hearing, the Tribunal decided to grant the assessee one final opportunity to present the evidence.
In conclusion, the ITAT restored the issue to the file of the AO, directing the AO to provide the assessee with a final opportunity to substantiate the source of the cash deposits. The AO was instructed to decide the issue as per law based on the evidence provided by the assessee.
Order: The appeal is allowed for statistical purposes.
Pronounced on: 18th February, 2021
Accountant Member: R.K. Panda
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asstt. Registrar, ITAT, New Delhi
Harish Kumar vs ITO WARD – 1(3), Ghaziabad – Unexplained Cash Deposits and Reopening of Assessment
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