KULWANT SINGH,DELHI V. ITO WARD 34(2), DELHI

ITA 1875/DEL/2024

AI Insights

The case involves Kulwant Singh, a trader of food products, who appealed against the orders of the National Faceless Appeal Centre (NFAC) and the Assessing Officer (AO) regarding the assessment for the year 2017-18. The AO had treated substantial cash deposits in Singh's bank account as unexplained income under Section 69A of the Income-tax Act, 1961, and added unverified sundry creditors as unexplained cash credits under Section 68. Both the NFAC and the AO's initial assessments were conducted ex parte due to the absence of the assessee's representation. The Income Tax Appellate Tribunal (ITAT) decided to restore the case to the AO for a fresh examination, allowing the assessee another opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34802 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: ASHISH GUPTA; FURNISHING NECESSARY DETAILS
• Keywords: Opportunity of being heard; Unexplained cash credit
• Section: 144; 69A

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 1875/Del/2024 (Assessment Year: 2017-18) Kulwant Singh, AF-6A, Shalimar Bagh, Delhi Vs. ITO, Ward-34(2), Delhi (Appellant) (Respondent) PAN:AZQPS5844M Assessee by : Shri Ashish Gupta, CA Revenue by: Shri OM Parkash, Sr. DR Date of Hearing 13/03/2025 Date of pronouncement 13/03/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.1875/Del/2024 for AY 2017-18, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as „ld. NFAC‟, in short] in Appeal No. ITBA/NFAC/S/250/2023-24/1061588944(1) dated 27.02.2024 against the order of assessment passed u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 17.12.2019 by the Assessing Officer, ITO, Ward-34(2), Delhi (hereinafter referred to as „ld. AO‟). 2. The assessee has raised the following grounds of appeal:- “That the addition made by the Ld. AO on the grounds of Section 69A i.e. Unexplained Money is grossly erred and bad in law and against the facts and circumstances of the case. The amount in question i.e. Rs 85,00,000/- is already declared by the assessee while filing his ITR, as his turnover for the year under consideration amounts to Rs. 29.02 Crores. The amount in question was deposited in his current account of ITA No. 1875/Del/2024 Kulwant Singh Page | 2 business as mentioned in the Assessment Order itself by the Ld. AO. The invocation of Sec 69A in the present case is not justified. 2. That the addition made by the Ld. AO on the grounds of Section 68 i.e. Unexplained Cash Credits is grossly erred and bad in law and against the facts and circumstances of the case. The addition on account of unverified creditors @ 10% of sundry creditors of Rs. 3,90,75,846/- is completely vague in nature and nowhere stands justified.” 3. We have heard the rival submissions and perused the material available on record. The assessee is a trader of food products. The return of income for AY 2017-18 was filed by the assessee on 11.11.2019 declaring taxable income of Rs. 8,50,900/-. There were huge cash deposits made in the bank account which was sought to be examined by the ld AO. But before the ld AO, there was no appearance by the assessee which eventually forced the ld AO to treat the cash deposits made in the sum of Rs. 85 lakhs as unexplained income u/s 69A of the Act and further add unverified sundry creditors to the tune of Rs. 39,17,584/- and complete the assessment u/s 144 of the Act on 17.12.2019. This action of ld AO was upheld by the ld NFAC before whom also, there was no compliance by the assessee. The ld AR before us prayed for one last opportunity to be given to the assessee for effective representation of the assessee by furnishing necessary details. Considering the fact that both the orders of the lower authorities were passed ex parte, we deem it fit and appropriate, in the interest of justice and fairplay, to restore this appeal to the file of the ld AO for de novo adjudication in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard. The assessee is at liberty to furnish fresh evidences, if any, in support of his contentions. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. ITA No. 1875/Del/2024 Kulwant Singh Page | 3 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 13/03/2025. -Sd/- -Sd/- (ANUBHAV SHARMA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13/03/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "