2022 (4) TMI 1121 - AT - Income Tax

Revision u/s 263 by CIT - Addition u/s. 69 - HELD THAT - It is not in dispute that the assessee could not produce requisite witnesses before the authorities below to explain the source of cash deposit in the bank account. The impugned order also reveals that the Ld. CIT(A) has not decided the appeal on merits but dismissed the same only for want of representation on behalf of the assessee. In the circumstances and in the interest of justice, we deem it proper to remand the case back to the file of Assessing Officer for making assessment afresh after giving an opportunity to the assessee to put up its case and to produce requisite witnesses before the Assessing Officer in support of its claim. The assessee is also directed to cooperate with the Assessing Officer and not to seek unnecessary adjournments. Accordingly, the appeal of the assessee is allowed for statistical purposes.

Issues:
1. Revision of assessment order u/s. 263 of the Income-tax Act, 1961.
2. Addition of unexplained cash deposit u/s. 69 of the Act.
3. Dismissal of appeal by CIT(A) for want of representation.
4. Appeal for remand to produce witnesses and documentary evidence.
5. Remand of the case to the Assessing Officer.

Analysis:

1. Revision of assessment order u/s. 263:
The case involved the revision of the assessment order u/s. 263 of the Income-tax Act, where the Commissioner found the original assessment to be erroneous and prejudicial to the interest of revenue. The revision was based on the unexplained cash deposit of ?44.00 lakhs made by the assessee in the bank account, which was claimed to be received as advance against the sale of land. The Commissioner concluded that the source of the cash deposit was unexplained, leading to the revision of the assessment order.

2. Addition of unexplained cash deposit u/s. 69:
Subsequently, the Assessing Officer made an addition of ?44,00,000/- u/s. 69 of the Act due to the failure of the assessee to explain the source of the deposit. The onus to explain the source of the deposit was not discharged by the assessee, leading to the addition based on relevant legal precedents.

3. Dismissal of appeal by CIT(A) for want of representation:
The appeal before the CIT(A) was dismissed for want of representation on behalf of the assessee. The dismissal was not based on the merits of the case but due to the lack of representation by the assessee during the proceedings.

4. Appeal for remand to produce witnesses and documentary evidence:
The assessee appealed the dismissal, arguing that the appeal was not decided on merits and requested a remand to produce all documentary evidence and witnesses to prove the source of the deposits. The assessee sought an opportunity to present its case and examine witnesses before the Assessing Officer.

5. Remand of the case to the Assessing Officer:
Upon review, the Tribunal found that the assessee failed to produce requisite witnesses before the authorities to explain the source of the cash deposit. In the interest of justice, the case was remanded back to the Assessing Officer for a fresh assessment. The assessee was directed to cooperate with the Assessing Officer, produce necessary witnesses, and not seek unnecessary adjournments. The appeal of the assessee was allowed for statistical purposes.

In conclusion, the Tribunal remanded the case back to the Assessing Officer for a fresh assessment, allowing the assessee an opportunity to present evidence and witnesses to substantiate the source of the cash deposits.

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