Case Number: ITA 5975/DEL/2019
Appellant: Laxmi Devi, New Delhi
Respondent: ITO Ward-35(1), New Delhi
Assessment Year: 2011-12
Order Type: Final Tribunal Order
Date of Order: 2022-01-18
Pronounced On: 2022-01-18
Introduction:
This case involves an appeal filed by Laxmi Devi against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-12, New Delhi, for the assessment year 2011-12. The appeal was directed against the addition of Rs. 10,44,321/- made under Section 68 of the Income Tax Act, 1961, by the Income Tax Officer (ITO), Ward-35(1), New Delhi. The addition was made on the grounds that the appellant failed to explain the source of certain transactions recorded in the Multi Commodities Exchange during the relevant assessment year.
Background and Grounds of Appeal:
Laxmi Devi, residing in New Delhi, did not file her return of income for the assessment year 2011-12. During the course of proceedings, the Assessing Officer (AO) reopened her assessment under Section 147 of the Income Tax Act after receiving information that she had conducted transactions amounting to Rs. 9,56,87,130/- in the Multi Commodities Exchange. A notice under Section 148 of the Act was issued to the appellant, but it was returned with the remark “left.” Consequently, the AO proceeded to make an ex parte assessment, adding Rs. 10,44,321/- to the appellant’s income under Section 68 as unexplained cash credits, representing the margin money for the transactions.
The appellant challenged this addition before the CIT(A), arguing that the notice under Section 148 was not served upon her and that the addition under Section 68 was invalid as she did not maintain any books of account. The appellant further contended that the addition was made solely on the basis of information received from the commodity exchange without any material evidence showing that she had invested the margin amount. However, the CIT(A) upheld the AO’s decision, leading the appellant to file this appeal with the Income Tax Appellate Tribunal (ITAT).
Tribunal’s Analysis and Decision:
The appeal was heard by the Tribunal, consisting of Shri Kul Bharat, Judicial Member. Despite multiple notices being issued to the appellant, there was no representation on her behalf during the hearing. The Tribunal noted that the appellant had not been actively pursuing her case, as evidenced by her non-appearance before both the AO and the CIT(A).
However, in the interest of natural justice, the Tribunal decided to give the appellant another opportunity to explain the source of the margin money and the transactions in question. The Tribunal observed that the assessment was made ex parte due to the appellant’s failure to respond to the notices and that the CIT(A) had also dismissed her appeal in her absence. Considering these factors, the Tribunal set aside the assessment order and restored the case to the AO for fresh examination.
The Tribunal directed the AO to provide the appellant with a reasonable opportunity to present her case and to explain the source of the alleged unexplained cash credits. The Tribunal emphasized the importance of ensuring that the appellant’s case is heard and that she is given a fair chance to defend herself against the addition made under Section 68 of the Act.
Conclusion:
The appeal filed by Laxmi Devi against the order of the ITO, Ward-35(1), New Delhi, for the assessment year 2011-12 was allowed for statistical purposes. The Tribunal set aside the assessment and directed the AO to re-examine the case after giving the appellant an opportunity to be heard.
Final Judgment:
The appeal filed by Laxmi Devi is allowed for statistical purposes, with the assessment being restored to the file of the AO for fresh consideration.
Order Pronounced: 18th January 2022
Judges: Shri Kul Bharat, Judicial Member
Reference: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC-2” BENCH: NEW DELHI
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