Facts of the Case

The assessee is an individual engaged in business activity. For the Assessment Year 2017-18, the assessee did not file a return of income. The Assessing Officer completed the assessment on 24.12.2019 and determined total income at ₹15,27,719 by making an addition of ₹10,63,000 under section 69A of the Income-tax Act on account of cash deposits in the bank account, and ₹4,64,719 by applying a net profit rate.The assessee preferred an appeal before the Commissioner of Income Tax (Appeals), which was dismissed vide appellate order dated 27.05.2025. Aggrieved by the said order, the assessee filed an appeal before the Income Tax Appellate Tribunal.

Issues Involved

Whether the Commissioner of Income Tax (Appeals) was justified in sustaining the addition of ₹10,63,000 under section 69A of the Income-tax Act through a non-speaking and summary appellate order, particularly when the assessment itself was completed ex-parte.

Petitioner’s (Assessee’s) Arguments

The assessee contended that the cash deposits of ₹10,63,000 made during the demonetisation period were part of the business turnover of the brick kiln business and therefore could not be treated as unexplained money under section 69A. It was also submitted that the appellate order lacked reasoning and failed to consider the factual and legal submissions.

Respondent’s (Revenue’s) Arguments

The Revenue supported the orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals) and defended the addition made under section 69A of the Income-tax Act.

Court Order / Findings

The Income Tax Appellate Tribunal observed that the assessment order was passed ex-parte against the assessee and that the appellate order passed by the CIT(A) was a non-speaking order dismissing the appeal in a summary manner. The Tribunal held that such an order could not be sustained in law.

Accordingly, the order of the Commissioner of Income Tax (Appeals) was set aside, and the matter in dispute was remanded back to the file of the Assessing Officer with a direction to pass a de novo order in accordance with law after providing reasonable opportunity of being heard to the assessee.

The appeal was allowed for statistical purposes.

 Important Clarification

The Tribunal has not adjudicated the issue on merits regarding the applicability of section 69A to cash deposits during the demonetisation period. The matter has been restored solely on the ground that both the assessment and appellate orders suffered from violation of principles of natural justice due to ex-parte proceedings and absence of a reasoned order.


Link to download the order - https://www.mytaxexpert.co.in/uploads/1770627004_CHHEDILALGUPTAPRATAPGARHVS.THEINCOMETAXOFFICERPRATAPGARH.pdf  

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