Vijay Kumar Jaiswal Vs ITO (ITAT Raipur)
The Raipur ITAT allowed the assessee’s appeal arising from the order of the CIT(A)/NFAC for AY 2014-15, holding that the appellate authority could not substitute Section 68 of the Income Tax Act for Section 69A without issuing statutory notice or providing an opportunity of hearing to the assessee.
The Assessing Officer had made an addition of ₹17,76,480 under Section 69A as unexplained money in relation to cash deposits. The Tribunal noted that while the assessment proceedings and the enquiry conducted by the Department were entirely directed towards explaining the source and nature of the cash deposits, the CIT(A), in the appellate order, altered the charging provision from Section 69A to Section 68 relating to unexplained cash credits. The Tribunal found that the CIT(A) neither demonstrated how Section 68 applied to the facts of the case nor issued any statutory notice or granted the assessee an opportunity of hearing before changing the charging provision. It held that such action violated the principles of natural justice and reflected complete non-application of mind.
The Tribunal relied on its earlier decisions, including Suman Poptani, where it had held that additions relating to unexplained cash deposits could not be sustained under an incorrect charging provision. It observed that there was no evidence of unexplained investment attracting Section 69, nor was there any enquiry relating to unexplained cash credits under Section 68. The entire investigation concerned the source of cash deposits, making Section 69A the relevant charging provision where applicable. Invoking an incorrect provision without examining the facts amounted to mechanical exercise of power and lack of application of mind by the Revenue authorities.
