2024 (6) TMI 1209 - AT - Income Tax

Assessment completed ex-parte order - Undisclosed cash deposits addition u/s 69A - HELD THAT - The Bench observed that the assessee was really lethargic and unserious in pursuing his case in spite of providing various opportunities by the ld. CIT(A) and ld. AO as mentioned in his order. The assessee did not appear or filed any reply to the notices which were issued by the ld. AO during the assessment proceedings, finally the assessment completed ex-parte order. Assessee or his legal representative did not appear even appellate proceedings in spite of several notices, it is evident in the ld. CIT(A) order. Bench feels that the assessee has filed an affidavit stating that he could not advance his arguments/submissions to contest the case before the lower authorities and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Assessment based on undisclosed cash deposits in bank account without filing income tax return, non-compliance with notices, dismissal of appeal by CIT(A) due to lack of response, request for additional opportunity for hearing, affidavit submitted by the assessee, decision to restore the matter back to the file of the AO.

Analysis:
The appeal was filed against the order of the ld. CIT(A) for the assessment year 2011-12, challenging the addition of Rs. 10,37,000 on account of undisclosed cash deposits in the bank account. The assessee, an individual, did not file the income tax return for the concerned year. The case was reopened, and notices were issued under various sections, but there was no compliance from the assessee. The assessment was completed ex-parte by the AO, adding the entire cash deposit amount to the income of the assessee.

The ld. CIT(A) dismissed the appeal ex-parte, citing non-compliance with notices and lack of cooperation from the appellant. The CIT(A) observed that the appellant failed to provide any evidence regarding the nature and source of the cash deposits, which led to the confirmation of the addition under Section 69A of the Income Tax Act, 1961. The appellant's non-cooperative behavior in both assessment and appellate proceedings was noted, and the dismissal of the appeal was upheld.

During the hearing, the assessee requested an additional opportunity to present arguments before the ld. AO, citing reasons for non-compliance. An affidavit was submitted explaining the lack of receipt of notices and communication issues. The Tribunal acknowledged the appellant's lethargic approach but decided to provide one more opportunity for a fair hearing, emphasizing the need for cooperation during the proceedings.

The Tribunal's decision to restore the matter back to the file of the ld. AO was not a reflection on the merits of the dispute but aimed at ensuring a fair adjudication in accordance with the law. Ultimately, the appeal of the assessee was allowed for statistical purposes, with the order pronounced on 19/01/2024.