CHETANAYA TRADERS,JALANDHAR V. ITO WARD 1(1), JALANDHAR

ITA 36/ASR/2024

AI Insights

Chetanaya Traders appealed against the order of the CIT(A) NFAC, Delhi, which sustained additions made by the ITO, Ward-1(1), Jalandhar under sections 69A and 40A(3) of the Income Tax Act, 1961. The additions were related to unexplained cash deposits amounting to Rs.2.23 crores during the demonetization period and cash payments exceeding limits amounting to Rs.6.80 lakhs. The Tribunal noted the absence of proper opportunity of hearing and inadequate compliance by the assessee in the initial proceedings. The Tribunal decided to remand the case back to the CIT(A) for a detailed examination, allowing the assessee to produce the cash book and other relevant documents to substantiate their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772115 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (HYBRID COURT) BEFORE SH. MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No. 36/Asr/2024 Assessment Year: 2017-18 Chetanaya Traders, 46, Leather Complex, Kapurthala Road, Punjab-144021 [PAN: AAIFC 0868J] (Appellant) Vs. Income Tax Officer, Ward 1(1), Jalandhar (Respondent) Appellant by Respondent by : : Sh. Sachin Jain, Adv. Sh. Charan Dass, Sr. D.R. Date of Hearing Date of Pronouncement : : 06.08.2025 28.08.2025 ORDER Per Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 04.12.2023 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the ITO, Ward-1(1), Jalandhar passed u/s 143(3) of the Act, dated 29.12.2019. Printed from counselvise.com 2 I.T.A. No. 36/Asr/2024 Assessment Year: 2027-18 2. The assessee has taken seven grounds of appeal challenging the additions made u/s 69A amounting to Rs.2.23 crores on account of unexplained cash deposited in bank during demonetization period and addition of Rs.6.80 lakhs u/s 40A (3) of the Act 61, for cash payments exceeding limits, both sustained by the first appellate authority, in absence of any compliance to various notices issued by the Ld. CIT (A) (as evident from para – 4 of appellate order). 3. In ground no. 2 the assessee has objected to the fact that no proper opportunity of hearing has been provided before confirming the additions. 4. It also not ascertainable from records whether hearing notice has been issued in email id provided in form 35 ([e-mail]) even though the Ld. first appellate authority has sustained the additions based on the SOF and Grounds contained in the memo of appeal. 5. Brief facts emerging are that the assessee firm is engaged in the business of trading of raw hides and wet blue leather and during the demonetization period the assessee has deposited SBN amounting to Rs. 2.28 crores in bank accounts (page 3 of assessment order) and even though the assessee has filed submissions and bank documents in course of assessment, the cash book was never produced in spite of repeated requests (as noted by AO para – 7 of order) on account of software issues. Printed from counselvise.com 3 I.T.A. No. 36/Asr/2024 Assessment Year: 2027-18 6. In absence of satisfactory explanation the assessment was completed on a total income of Rs.2.32 crores (against returned income of Rs.2.57 lakhs) and the matter carried in appeal has been dismissed in absence of proper explanation and inadequate compliance. 7. In course of hearing the Ld AR filed a short paper book containing number of bank statements of different accounts maintained with PNB, audit report, audited accounts, ITR and computation of income, and submitted that the source of cash deposited in bank accounts during demo period was out of withdrawals from banks on various dates prior to demonetization (and not from regular sale proceeds of the assessee, as per synopsis para – 5 filed before tribunal). 8. As such he prays that an opportunity be allowed for production of cash book before theLd first appellate authority, because all such periodical withdrawals from banks are duly recorded in regular cash book, through which the said deposits can be satisfactorily explained. 9. The Ld DR relied on the order of the first appellate authority, but considering the ex-parte order passed without proper representation, he has no objection if the matter is remanded to Ld. CIT(A). 10. We have considered the materials on record and heard the rival counsels and we are of the opinion that cash deposited in bank during demonetization period by a Printed from counselvise.com 4 I.T.A. No. 36/Asr/2024 Assessment Year: 2027-18 business entity needs to be explained by production of books of accounts (cash book regularly maintained in normal course of business) along with supporting evidences. 11. As such in the interest of justice we remand the matter back to the Ld first appellate authority for deciding on all grounds contained in form 35 on merits after allowing an opportunity to the assessee to file necessary documents and submissions in support of its contention and to explain the source of cash deposited in bank during demonetization period. 12. We have not expressed any opinion on merits of the case and all issues are left open. 13. The assessee to be allowed opportunity of being heard. 14. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 28.08.2025. Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T Printed from counselvise.com 5 I.T.A. No. 36/Asr/2024 Assessment Year: 2027-18 True Copy By Order Printed from counselvise.com "