Facts of the Case

The appeal arose from an order passed under Section 250 of the Income Tax Act, 1961 dated 01.07.2024 for Assessment Year 2017-18.

The Assessing Officer had completed the assessment under Section 144 (best judgment assessment) on account of three deposits in the assessee’s bank accounts amounting to ₹18,83,000, ₹3,50,000, and ₹10,96,000, aggregating to ₹33,29,000. These amounts were added as unexplained money under Section 69A of the Act.

Additionally, the Assessing Officer added ₹49,27,360, being 10% of non-cash deposits in the bank account, treating the same as unexplained investment.

The assessee’s appeal before the Commissioner of Income Tax (Appeals) did not yield any relief, leading to the present appeal before the Tribunal.

 Issues Involved

  1. Whether additions under Section 69A based on bank deposits were sustainable in a best judgment assessment.
  2. Whether the assessee was denied proper opportunity to present the case before the lower authorities.
  3. Whether the appellate order was vitiated due to reliance on facts relating to an incorrect assessment year.

 Petitioner’s Arguments (Assessee)

The Authorized Representative submitted that the assessee was inadequately advised in tax matters and therefore could not effectively represent her case before the Assessing Officer.

It was further contended that the assessee should not be penalized for lack of knowledge of tax procedures.

A crucial argument advanced was that the appellate order pertained to Assessment Year 2018-19 instead of Assessment Year 2017-18. The representative demonstrated that the CIT(A) had relied upon facts, figures, and submissions relevant to the succeeding year while adjudicating the present appeal.

On this basis, it was argued that the assessee suffered due to an oversight by the appellate authority, and the matter should be restored for fresh consideration.

Respondent’s Arguments (Revenue)

The Departmental Representative acknowledged that the assessee had not been sufficiently vigilant before the Assessing Officer. However, he agreed that the CIT(A) appeared to have adjudicated the appeal based on facts and submissions relating to Assessment Year 2018-19 rather than the relevant Assessment Year 2017-18.

He indicated that the Revenue would have no objection if the matter were remanded for fresh consideration.

 Court Order / Findings (ITAT Allahabad)

Upon examining the records and submissions, the Tribunal found prima facie that the CIT(A) had misdirected himself by applying facts, figures, and submissions pertaining to the succeeding assessment year while deciding the appeal.

The Tribunal held that the assessee should not suffer due to such an oversight by the First Appellate Authority.

Accordingly, the matter was remanded to the Assessing Officer for fresh consideration based on the correct facts, which the assessee was expected to submit during the proceedings.

 Important Clarification

The appeal was allowed for statistical purposes only. The Tribunal did not adjudicate on the merits of the additions but restored the matter for reconsideration by the Assessing Officer, emphasizing the need for proper presentation of facts by the assessee during fresh proceedings.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1771060931_ASHAAGRAWALALLAHABADVS.ITO11ALLAHABAD.pdf

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