This document provides a detailed analysis of the Income Tax Appellate Tribunal’s final decision on the case between Jatinder Kumar Ahuja, Kingdom of Bahrain and DCIT, International Taxation Circle, Gurugram, concerning the assessment year 2012-13. The case number is ITA 2609/DEL/2022, presided over by Judicial Member Ms. Astha Chandra and Hon’ble President Shri G.S. Pannu.
The appeal filed by the assessee, Jatinder Kumar Ahuja, was directed against the order dated 31.08.2022 of the CIT(A) – 43, New Delhi, for the assessment year 2012-13. The primary issue in this case was the addition of Rs. 12,30,000 made by the AO under section 68 of the Income Tax Act, 1961 (the “Act”) for unexplained cash deposits.
During the hearing on 01.05.2023, the Revenue was represented by Shri Sanjay Kumar, Sr. DR, and the assessee was represented by Shri Sameer Kapoor, CA. The Tribunal proceeded to adjudicate the appeal based on the materials on record and submissions made by both parties.
The solitary ground of appeal taken by the assessee was that the CIT(A) erred in confirming the addition of Rs. 12,30,000 made by the AO by invoking the provisions of section 68 of the Act. The assessee, a non-resident individual, had not filed a return for the AY 2012-13. Based on information that he had deposited Rs. 12,30,000 in cash with ICICI Bank Ltd., the AO issued a notice under section 148 of the Act on 30.03.2019, which was duly served upon the assessee.
The assessee did not respond to the notices issued under section 142(1) of the Act. Consequently, the AO completed the assessment ex-parte under section 144 r.w. section 147 of the Act, adding the unexplained cash deposit of Rs. 12,30,000 as income under section 68 of the Act. The assessee’s appeal to the CIT(A) was dismissed despite additional evidence being provided, including a declaration from the assessee’s wife explaining the source of the cash deposit as proceeds from the sale of property.
The Tribunal noted that the assessee was a non-resident working in the Middle East and was not in the country during the assessment proceedings. The additional evidence submitted during the appellate proceedings included bank statements, a registered sale deed of the property sold by the assessee’s wife, a declaration from the wife, and employment certificates. The CIT(A) dismissed the appeal without properly considering this evidence and without allowing the assessee to file a rejoinder to the remand report from the AO.
The Tribunal found that the nature and source of the cash deposit were not properly explained during the assessment proceedings, leading to the ex-parte addition. However, the additional evidence submitted during the appellate proceedings warranted consideration. The Tribunal concluded that the CIT(A) failed to adhere to the principles of natural justice by not allowing the assessee to respond to the remand report and by not considering the additional evidence.
The Tribunal restored the matter to the CIT(A) for a fresh decision after admitting and considering the additional evidence. The appeal was allowed for statistical purposes.
Order pronounced in the open court on 26th May, 2023.
(G.S. PANNU)
HON’BLE PRESIDENT
(ASTHA CHANDRA)
JUDICIAL MEMBER
This case highlights the importance of considering additional evidence and ensuring fair opportunities for the assessee to present their case. The decision underscores the need for just and reasonable application of tax laws, especially in cases involving non-resident individuals.
The appellant, Jatinder Kumar Ahuja, challenged the addition made by the AO under section 68 for unexplained cash deposits. The CIT(A) confirmed the addition despite the appellant’s claims and additional evidence provided during the appellate proceedings. The Tribunal found in favor of the appellant, emphasizing the necessity of adhering to principles of natural justice.
The appellant argued that being a non-resident, he was not in India to receive the notices and the address on record was outdated. The additional evidence provided during the appellate proceedings explained the source of the cash deposit, which was proceeds from the sale of property by the appellant’s wife.
The Tribunal observed that the assessee had made efforts to comply with the notice via email and provided substantial additional evidence during the appellate proceedings. The failure to consider this evidence and the lack of opportunity to respond to the remand report constituted a violation of natural justice principles.
The Tribunal’s decision in the case of Jatinder Kumar Ahuja, Kingdom of Bahrain vs DCIT, International Taxation Circle, Gurugram, reaffirms the necessity of considering the unique circumstances of non-resident assessees and ensuring fair opportunities for compliance. The restoration of the case to the CIT(A) highlights the importance of just and reasonable application of tax laws.
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