2021 (7) TMI 1174 - AT - Income Tax

Assessment u/s.144 treating the cash deposited as unexplained - Addition being the deposits made in the bank account on non-compliances of the notices - HELD THAT - CIT(A) has admitted the additional evidences furnished by the assessee. The assessee explained that he was an agriculturist and main source of his income was from agricultural activities. In this regard, the assessee has furnished relevant copies of sale of agricultural produce and evidences of incurring expenditure pertaining to agricultural activities. Assessing Officer has raised clarification in his remand report on the additional evidences furnished by the assessee before the ld. CIT(A). To explain the query raised by the Assessing Officer in his remand report and to furnish further evidences required by the Assessing Officer in the remand report, the assessee has asked additional time from the ld. CIT(A). On perusal of the order of the ld. CIT(A) and material on record it is discerned that no specific opportunity was communicated to the assessee in order to make compliance with the further information and evidences sought by the Assessing Officer in the remand report. In light of the above fact and circumstances it would serve the end of justice if an opportunity is provided to the assessee to furnish the additional information and evidences as required by the AO in the remand report. Thus we set aside the order to the AO for deciding afresh after affording opportunity to furnish the information/evidences sought in the remand report - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against addition of cash deposits in bank account due to non-compliance with notices.

Detailed Analysis:

Issue 1: Addition of Cash Deposits
The assessee's appeal was against the addition of ?14,43,000 deposited in the bank account due to non-compliance with notices. The Assessing Officer found that the cash deposits were unexplained and added them to the total income. The CIT(A) confirmed the addition, stating that the books of accounts were prepared without supporting evidence and the appellant failed to provide necessary documents. The appellant claimed the cash was from selling agricultural produce, but failed to provide sufficient evidence. The appellant also failed to offer any agricultural income in the return filed. The CIT(A) dismissed all grounds related to the addition.

Issue 2: Compliance and Additional Evidences
During the appeal, the appellant argued that due to the unavailability of their legal consultant, they couldn't comply with the Assessing Officer's notices. The appellant wanted to submit details and evidence regarding the source of cash deposits but lacked time due to the consultant's absence. The appellant requested more time to provide relevant papers highlighted in the remand report but was not granted additional time by the CIT(A). The appellant's counsel argued that despite multiple opportunities, the appellant couldn't comply, while the Departmental Representative supported the CIT(A)'s order.

Judgment:
The ITAT allowed the appeal for statistical purposes, setting aside the order to the Assessing Officer. The ITAT noted that no specific opportunity was given to the appellant to comply with the information sought by the Assessing Officer in the remand report. The ITAT decided to provide the appellant with an opportunity to furnish the required additional information and evidence. The decision aimed to avoid prolonging the litigation process and ensure justice by affording the appellant a chance to address the queries raised by the Assessing Officer.