2021 (10) TMI 871 - AT - Income Tax

Addition u/s. 68 - cash deposits in saving bank account in the name of the assessee - HELD THAT - One opportunity should be granted to the assessee to prove the source of cash deposits. For this purpose, the issue on merits is restored to the files of the A.O. The assessee is directed to cooperate with the Assessing Officer. The assessee shall place necessary documentary evidences to prove the source of cash deposits - A.O. is directed to afford a reasonable opportunity of hearing to the assessee.

Summary

Issues:
1. Whether the assessment order was served within the prescribed time limit under section 144 of the Income Tax Act, 1961?
2. Whether the addition under section 68 of the Income Tax Act, amounting to ?17,11,500, is justified in the case?

Analysis:
1. The primary issue in this case was the timeliness of the assessment order served under section 144 of the Income Tax Act. The appellant contended that the assessment order dated 28.12.2011 was served on 15.03.2012, exceeding the limitation period. However, upon review, it was found that the assessment order was dispatched on 29.12.2011, within the prescribed period. The Tribunal cited relevant judgments to support the position that the order need not be served on the assessee within the limitation period, and as the order was dispatched timely, the plea of the assessee was rejected.

2. The secondary issue revolved around the addition made under section 68 of the Income Tax Act, totaling ?17,11,500, concerning cash deposits in the assessee's savings bank account. The CIT(A) did not address this issue on merits, prompting the Tribunal to consider the appellant's argument that the addition was not justified. The Tribunal acknowledged the appellant's submission citing case law but decided to grant one opportunity to the assessee to substantiate the source of the cash deposits. The matter was remanded back to the Assessing Officer for further examination, directing the assessee to provide necessary documentary evidence and affording a fair hearing opportunity.

In conclusion, the Tribunal partially allowed the appeal for statistical purposes, emphasizing the need for the assessee to cooperate with the Assessing Officer in proving the source of the cash deposits. The judgment was pronounced on 11th October 2021.