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Judgment
ORDER
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the Revenue is directed against the order of the National Faceless Appeal Centre Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 13-06-2025 pertaining to A.Y. 2017-18, arising out the assessment order dated 17-12-2019 passed under section 144 of the Income-tax Act, 1961, (in short ‘the Act’).
The Revenue has raised the following grounds in appeal:
1.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 3,71,04,500/- made by AO u/s 68 of the Income Tax Act, 1961 without appreciating the fact that assessee has failed to file classification with documentary evidence with regard to cash deposited in the bank account of sales proceeds /cash balance recovery from debtors.
2.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing additional evidence when the AO had provided ample opportunities during the course of assessment proceedings and noting had barred the assessee to file any details during the course of assessment proceedings in response to the more than sufficient opportunities provided.
3.On the facts and circumstances of the case and in law, the Ld. CIT(A) has had failed to note that during the course of assessment proceedings assessee failed to justify /establish the relationship link between the business & cash deposits made.
4.On the facts and circumstances of the case and in law, the decision of Ld. CIT(A), NFAC is not acceptable on merits as the Assessing Officer has correctly made the addition by making observation that “ the data analysis of bank statement with United Bank of India and HDFC Bank reveals various credit entries including cash deposits made during the FY2016-17, especially during demonetization period. It is evident from bank credit and debit entries that the assessee received credit entries and made cash deposits but had not offered income from its activities and not paid taxes due thereon.
5.On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in appreciating the facts that the assessee has failed to comply with the terms of notices issued by this office and never responded to the communication sent to the assessee in terms of proceedings.
6.The appellant craves the right to add, alter or amend any ground (s) of appeal before or during the course of hearing of appeal.
The brief facts of the case are that the assessee filed his return of income declaring total income of Rs.13,81,690/- on 27-09-2016. The case of the assessee was selected for limited scrutiny on the basis of CASS on the reason, whether Deduction claimed on account of business expenses is admissible. The first notice was issued under section 143(2) of the Act on 03-07-2017 and served upon the assessee. The assessee was asked to explain the source of cash deposits, vide notice under section 142(1) but no reply was filed by the assessee. The Assessing Officer passed the assessment under section 144of the Act because assessee fails to complied with terms of a notice issued under section 142(1) of the Act. The Assessing Officer completed the assessment proceedings after making the addition of Rs.3,71,04,500/-.
Aggrieved with the additions, the assessee preferred the appeal before the Ld. NFAC, who vide order dated 13-06-2025 allowed the appeal. Aggrieved the order of the Ld. NFAC, the Revenue is in appeal before the Tribunal.
The Ld. Departmental Representative submitted that the assessee has not filed any reply before the Assessing Officer. The Assessing Officer objected the admissibility of the additional evidences because the assessee did not file and reply before the Assessing Officer. The Ld. NFAC has not mentioned the objection raised by the Assessing Officer in the order and deleted the additions on the assumption basis. He also submitted that the assessee’s case was not covered in the exceptions mentioned in Sub Rule 46A of the Income Tax Rules.
The Ld. AR of the assessee submitted that notices were replied by him and documents were furnished. We have heard the parties and perused the material available on record. It is evident from the order of the Assessing Officer that the assessee did not file any reply of the notice and assessment was completed under section 144 of the Act. The Ld. NFAC during the hearing of appeal called the remand report form the Assessing Officer but not mentioned his objection in his order and allowed the appeal of the assessee without considering the objection of the Assessing Officer. In the interest of justice and fair play we deem fit to restore the matter before the Assessing Officer to pass the fresh order after giving the opportunity of being heard to the parties. The assessee is also directed to co-operate with the Assessing Officer. The order of the Ld. NFAC is set aside and grounds raised by the Revenue are allowed for statistical purposes.
In the result, the appeal of the Revenue is allowed for statistical purposes.