REKHA SINGH,HYDERABAD V. INCOME TAX OFFICER, WARD-7(1), HYDERABAD

ITA 844/HYD/2024

AI Insights

Ms. Rekha Singh, the appellant, contested the order of the Learned Commissioner of Income Tax (Appeals), which upheld the assessment made by the Learned Assessing Officer regarding unexplained cash deposits during the demonetisation period in 2016. The Assessing Officer had treated the cash deposits of Rs.70,65,963 as unexplained and assessed the total income accordingly, due to the appellant's failure to respond to notices. The Tribunal found that the CIT(A) had not adequately addressed the appeal on its merits and had not provided sufficient reasoning for the decision, leading to the setting aside of the CIT(A)'s order and a remand to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472557 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARTHAM RAJESH
• Keywords: Set aside; Principle of natural justice

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.844/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2017-18) Ms. Rekha Singh, Hyderabad. PAN:AUCPS2767E Vs. Income Tax Officer, Ward-7(1), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Artham Rajesh, C.A. रधजस्‍ व द्वधरध/Revenue by:: Shri Srinath Sadanala, SR-DR सुिवधई की तधरीख/Date of hearing: 28/01/2025 घोर्णध की तधरीख/Pronouncement: 03/02/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M: This appeal is filed by Ms. Rekha Singh (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 11.07.2024 for the A.Y. 2017-18. 2. The brief facts of the case are that the assessee had not filed any income tax return for the A.Y. 2017-18. However, on the basis of data analytics and information gathered during the phase of online verification under ‘Operation Clean Money’, the income tax ITA No.844/Hyd/2024 2 department gathered a list of assessees who had deposited substantial cash in bank account during the demonetisation period (09.11.2016 to 30.12.2016), but not filed income tax return for A.Y. 2017-18. From the data, the Learned Assessing Officer (“Ld. AO”) found that the assessee has deposited cash of Rs.15,03,000/- in her bank account during the demonetisation period. Accordingly, the Ld. AO issued notice to the assessee for getting explanation qua cash deposit of Rs.15,03,000/- in bank account during demonetisation period. However, no response was submitted by the assessee. The Ld. AO, further found that, the total cash deposited in the bank by the assessee during the A.Y. 2017-18 was Rs.70,65,963/-. Accordingly, the Ld. AO again called for the explanation from the assessee qua cash deposit of Rs.70,65,963/- in her bank account. However, the assessee did not respond to the various notices issued by the Ld. AO. Consequently, the Ld. AO completed the assessment u/s.144 of the Income Tax Act, 1961 (“the Act”) on 05.12.2019 treating the cash deposit of Rs.70,65,963/- from unexplained sources and assessed the total income of the assessee at Rs.70,65,963/-. 3. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee as per his observation at para nos.3.1 to 4 of his order, which is reproduced as under : “ 3.1 Ground No.4 is related to the addition of the cash deposit of Rs.70,65,963/-, being cash deposited in the bank accounts of the appellant, during the demonetisation period as unexplained money under section 69A. ITA No.844/Hyd/2024 3 4. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that, the Ld. CIT(A) has passed the order without providing adequate opportunity to the assessee. He also submitted that the Ld. CIT(A) has not decided the appeal on merits. Therefore, the Ld. AR requested before the bench for providing one more opportunity to the assessee so that the assessee's case can be decided on merits. 5. Per contra, the Learned Department Representative (“Ld. DR”) relied on the order of Ld. CIT(A) and objected to provide one more opportunity keeping in view of sufficient opportunity had ITA No.844/Hyd/2024 4 been provided to the assessee. The Ld. DR prayed before the bench to dismiss the appeal of the assessee. 6. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the findings of Ld. CIT(A) as reproduced herein above, wherein we found that, the Ld. CIT(A) has arrived at his conclusion neither stating the points of his determination nor stating the reasons for his findings. Accordingly, we are of the opinion that, the order of the Ld. CIT(A) is not in accordance with the mandate of section 250(6) of the Act. Therefore, we set aside the order of Ld. CIT(A). We also found that the case of the assessee could not be prosecuted on merits before the Ld. AO also. Therefore, considering the principle of natural justice, we deem it appropriate to set aside the issue to the file of Ld. AO to decide afresh after providing a reasonable opportunity of being heard to the assessee. The assessee is also directed to co-operate in the assessment proceedings and file all the relevant documents within the time. Accordingly, the appeal of the assessee is allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. ITA No.844/Hyd/2024 5 Order pronounced in the open Court on 3rd Feb., 2025. Sd/- Sd/- (K. NARASIMHA CHARY) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 03.02.2025. * Reddy gp Copy of the Order forwarded to : 1. Ms. Rekha Singh, Flat 503, 5th Floor, Keerti Estates, Shanti Nagar, Hyderabad-500 057 2. ITO, Ward 7(1), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "