2022 (8) TMI 907 - AT - Income Tax

Assessment u/s 144 r.w.s. 144(1)(b) - addition u/s 69A - money received from the customers on various dates in old notes cannot be accepted a genuine as the assessee was not supposed to receive currency as per the norms - contention of the assessee is that he has received and remitted the demonetized currency within the time stipulated by the Act No. 2 of 2017 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 - AO was of the opinion that the assessee has been doing furniture business which does not fall under the exemption category as given by the board such as petrol bunk, hospital, medical shop, Airtel recharge, etc. - HELD THAT - In this case, admittedly, the assessee has neither filed regular return of income under section 139 of the Act for the assessment year 2017-18 nor furnished complete details in response to various notices issued by the Assessing Officer. Moreover, there was no response to the notices issued by the Ld. CIT(A) also or furnished any explanation/reply and thus, the Ld. CIT(A) confirmed the assessment order. In view of the above, we are of the considered opinion that the assessee shall furnish complete details before the Assessing Officer and the Assessing Officer shall, after verification of details as may be filed by the assessee, decide the issue afresh in accordance with law by affording reasonable opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Assessment under section 144 r.w.s. 144(1)(b) of the Income Tax Act for the assessment year 2017-18 based on unexplained cash deposits during demonetization period and failure to file a timely return of income.

Analysis:
The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the assessment year 2017-18. The Assessing Officer noted multiple cash deposits during demonetization in the assessee's bank accounts and issued a notice under section 142(1) of the Income Tax Act, 1961. Despite various opportunities, the assessee failed to file a timely return of income. The belated return declared a gross total income of Rs. 4,49,148/-. The Assessing Officer considered the cash deposits, especially Rs. 5,34,000/-, as unexplained income under section 69A of the Act, leading to an estimated business turnover of Rs. 32,72,009/- and total income of Rs. 2,61,768/-. The Ld. CIT(A) confirmed the order due to the assessee's lack of response.

The assessee contended that the demonetized currency was handled within the stipulated time under the Specified Bank Notes Act, 2017. However, the Assessing Officer argued that the furniture business did not fall under the exemption category for old currency acceptance. The Tribunal observed the assessee's failure to file a regular return or provide complete details in response to notices, leading to confirmation of the assessment order by the Ld. CIT(A). The Tribunal directed the assessee to furnish complete details to the Assessing Officer for a fresh decision, emphasizing compliance with the law and providing a fair opportunity for the assessee to be heard.

In conclusion, the appeal was allowed for statistical purposes, highlighting the importance of complying with assessment procedures and providing necessary details to tax authorities for a fair determination of tax liabilities. The judgment emphasized the need for proper responses to notices and the opportunity for the assessee to present their case effectively before the authorities.