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Judgment
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short 'the CIT(A)'] dated 03.09.2025, for AY 2017-18.
Shri Saket Singh appearing on behalf of the assessee submitted that the assessment for AY 2017-18 in the case of assessee was selected for complete scrutiny. The Assessing Officer (AO) during assessment proceedings observed that there were cash deposits to the tune of Rs.44,17,500/- during demonetization period. The assessee explained that the cash deposits by the assessee in bank represents cash sales. The AO disregarding submission of the assessee made addition of the entire cash deposits in the bank i.e. Rs.44,17,500/-u/s.68 r.w.s. 115BBE of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). Aggrieved by the assessment order dated 30.12.2019, the assessee carried the issue in appeal before the CIT(A). In First Appellate proceedings, the assessee furnished detailed written submissions. A remand report was called by the CIT(A) on the submissions made by the assessee, the CIT(A) without providing copy of the remand report to the assessee and without seeking assessee’s reply to the said remand report confirmed the addition made by the AO. Thus, there has been violation of principles of natural justice. The CIT(A) has confirmed the addition on the basis of remand report without confronting the same to the assessee. The ld. Counsel prayed for providing a copy of the remand report to the assessee, so that the assessee can rebut the same.
Per contra, Shri Om Prakash representing the department strongly supported the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that the assessee was granted fair opportunity of making submission by the CIT(A), since, the assessee failed to explain source of cash deposits to the satisfaction of AO, the addition was sustained by the CIT(A).
Both sides heard, orders of the authorities below examined. The sole grievance of the assessee in the present appeal is that, the CIT(A) has upheld the addition made by the AO in respect of cash deposits during demonetization on the basis of remand report without confronting the said remand report to the assessee. The CIT(A) at the back of the assessee has accepted the remand report from the AO, without providing opportunity of rebuttal. Considering entire facts of the case, we deem it appropriate to restore this appeal back to the CIT(A) for denovo adjudication. The CIT(A) shall provide a copy of remand report to the assessee and shall provide reasonable opportunity to the assessee to furnish reply to the said remand report.
The CIT(A) shall decide appeal of the assessee after considering reply of the assessee, if any, in accordance with law.
In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.