The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) decided to give opportunity to the assessee to produce all the relevant documents before the Assessing Officer (AO) for fact verification would meet the ends of justice.
The bench of K. Narasimha Chary (Judicial Member) quashed the impugned order of ex parte addition of cash deposit made in the bank during demonetisation period under section 69A of the Income Tax Act, 1961.
The assessee filed her return of income for the assessment year 2017-18 declaring an income of Rs. 2,71,980. The case was selected for scrutiny through CASS.
According to the Assessing Officer (AO), in spite of several opportunities and issuance of notices under section 143(2) and 142(1) of the Income Tax Act, the assessee failed to furnish any details in respect of the cash deposits in the bank to the tune of Rs. 18,98,000 during the demonetization period.
Further, the AO also found that the assessee had shown the gross receipts from the business to the tune of Rs. 24,12,600, no details in respect of the nature of business or the business activities were produced.
As a result, the AO determined that there was no way to continue ex parte and completed the assessment by adding Rs. 18,98,000 to the assessee’s income in accordance with Section 69A of the Income Tax Act, classifying it as unexplained income.
The counsel of the assessee submitted that assessee submits that through business, she derived that income and business need not be for any particular number of years or any particular length of time and a business could be by way of sporadic activities also.
Further asserted that if for any reason the bench thinks it proper that without verification of facts, it is not possible to grant any relief to the assessee, the issue may be restored to the file of AOso that the assessee would file all the relevant documents before the learned AO.
Conversely, the respondent side submitted that in spite of grant of several opportunities, the assessee failed to avail the same and, therefore, it is not open for the assessee to complain that sufficient opportunity was not granted to her.
The bench noted that the assessee failed to appear before the AO after the assessment order was issued according to Section 144 of the Income Tax Act.
Further, the assessee’s justification is that, as a woman and because of personal issues, she was unable to present before the AO and successfully prosecute the procedures. Additionally, Covid Pandemic intervened for a significant amount of time with the proceedings before the first appellate authority. Thus allowed the appeal and directs for readjudication.
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