Digambhar Ananda Thoke Vs ACIT (ITAT Pune)
Summary: These two appeals were filed by the assessee against separate orders of NFAC/CIT(A) for A.Y. 2015-16. The first appeal, ITA No. 1683/PUN/2026, arose from an order passed under sections 147 and 144 and section 250 of the Income-tax Act, while the second appeal concerned penalty proceedings under section 271(1)(c) and section 250 of the Act.
The Assessing Officer received information that the assessee had made substantial cash deposits in a cooperative bank during F.Y. 2014-15 and had not filed a return of income for A.Y. 2015-16. A notice under section 148 dated 31.03.2022 was issued, but there was no compliance. Thereafter, the Assessing Officer issued a notice under section 142(1) requiring the assessee to explain the sources of the cash deposits with supporting evidence. There was again no response.
The Assessing Officer accordingly completed the assessment under section 147 read with sections 144 and 144B on 22.02.2023, making an addition under section 69A in respect of unexplained cash deposits and determining total income at Rs.72,07,000/-. The assessee appealed before the CIT(A)/NFAC. As there was no compliance with the hearing notices, the CIT(A) confirmed the Assessing Officer’s action and dismissed the appeal ex parte.
Before the Tribunal, the assessee’s Authorized Representative submitted that the non-compliance before the CIT(A) was not deliberate but was due to circumstances beyond the assessee’s control. It was submitted that the assessee had a good case on merits and would substantiate the claim with material evidence if another opportunity was provided. The Departmental Representative supported the CIT(A)’s order.
The Tribunal observed that the CIT(A) had issued notices and proceeded on the basis that the assessee was not interested in prosecuting the appeal. However, the Tribunal noted that there could be various reasons for non-appearance or non-compliance and that such reasons could not be overruled. Considering the facts, circumstances, submissions and principles of natural justice, the Tribunal decided to provide the assessee one more opportunity of hearing.
Accordingly, the Tribunal set aside the CIT(A)’s order and remitted the disputed issue to the CIT(A) for fresh adjudication, directing that adequate opportunity of hearing be provided to the assessee and that the assessee cooperate by submitting the required information for early disposal of the appeal. The appeal was allowed for statistical purposes. The penalty appeal was also allowed for statistical purposes as the Tribunal held that the facts and circumstances were identical and its decision would apply mutatis mutandis.
Facts and Assessment Proceedings
The Assessing Officer received information regarding substantial cash deposits made by the assessee in a cooperative bank during F.Y. 2014-15. The assessee had not filed the return of income for A.Y. 2015-16.
On the basis of the information available, the Assessing Officer formed the belief that income had escaped assessment and issued notice under section 148 of the Income-tax Act on 31.03.2022. The assessee did not comply with the notice.
The Assessing Officer subsequently issued notice under section 142(1), requiring an explanation regarding the sources of the cash deposits along with supporting evidence. There was no response from the assessee.
The assessment was consequently completed by invoking section 144. The Assessing Officer made an addition under section 69A in respect of unexplained cash deposits and determined the total income at Rs.72,07,000/- by order dated 22.02.2023 passed under section 147 read with sections 144 and 144B.
Proceedings Before CIT(A)/NFAC
Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A)/NFAC.
The CIT(A) considered the grounds of appeal, statements of facts and the findings of the Assessing Officer. Hearing notices were issued, but there was no compliance from the assessee.
On the basis of the information available on record and the absence of compliance, the CIT(A) confirmed the action of the Assessing Officer and dismissed the assessee’s appeal ex parte.
Submissions Before the Tribunal
The assessee’s Authorized Representative submitted that the CIT(A) had erred in confirming the Assessing Officer’s action while overlooking the circumstances surrounding the assessment proceedings.
It was submitted that the non-compliance before the CIT(A) was not a wanton act but was due to circumstances beyond the assessee’s control. The Authorized Representative further submitted that the assessee had a good case on merits and would substantiate the same through material evidence if an opportunity was granted.
The Authorized Representative therefore prayed that an opportunity be provided before the lower authorities.
In contrast, the Departmental Representative supported the order passed by the CIT(A).
Tribunal’s Observations and Findings
The Tribunal noted that the CIT(A) had proceeded on the basis that there had been no compliance despite adequate opportunities and notices. On that basis, the CIT(A) had concluded that the assessee was not interested in prosecuting the appeal and had dismissed the appeal ex parte while confirming the Assessing Officer’s action.
However, the Tribunal observed that the assessee had challenged the addition made under section 69A and that there could be various reasons for non-appearance or non-compliance which could not be overruled.
In considering the matter, the Tribunal took into account the facts, circumstances, submissions and principles of natural justice. The Tribunal therefore decided to provide one more opportunity to the assessee to substantiate the case with evidence and information.
Remand to CIT(A) for Fresh Adjudication
The Tribunal set aside the order of the CIT(A) and remitted the disputed issue to the file of the CIT(A) for fresh adjudication.
The CIT(A) was directed to provide the assessee adequate opportunity of hearing. The assessee was also directed to cooperate by submitting the required information for early disposal of the appeal.
The Tribunal accordingly allowed the grounds of appeal for statistical purposes.
The Tribunal’s approach is consistent with the importance of providing an effective opportunity of hearing in an ex-parte order sustaining addition under section 69A, while the precise dispute in the present case was remitted to the CIT(A) for fresh adjudication.
Decision in Penalty Appeal
The order records that the penalty appeal was based on facts and circumstances identical to the appeal dealt with in the preceding paragraphs. It states that the decision rendered in those paragraphs would apply mutatis mutandis to the penalty appeal.
Accordingly, the grounds raised by the assessee in the penalty appeal were also allowed for statistical purposes.
Final Decision
The Tribunal allowed both appeals filed by the assessee for statistical purposes.
In the quantum appeal, the order of the CIT(A) was set aside and the disputed issue was remitted to the CIT(A) for fresh adjudication after providing adequate opportunity of hearing to the assessee.
The penalty appeal was also allowed for statistical purposes on the basis that the facts and circumstances were identical.
The order was pronounced in the open court on 31.07.2026.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals are filed by the assessee against the separate orders of NFAC/(CIT(A) (i) ITA No. 1683/PUN/2026 for A.Y. 2015-16passed order u/sec 147 and u/sec 144 of the Act and u/sec250 of the Act (ii) ITA No. 1684/PUN/2026 for the A.Y. 2015 -16 passed order u/sec 271(1)(c) and u/sec250 of the Income Tax Act.The assessee has raised the grounds of appeal in these two appeals challenging the ex parte order of the CIT(A)/NFAC sustaining the addition/penalty levied by the Assessing Officer. 2.
2. Since the issues involved in these appeals are common, identical and interlinked and for the sake of convenience, we shall take up ITA.No.1683/PUN/2026 as a lead case and facts narrated.
3. The brief facts of the case are that, the Assessing officer has received information that the assessee has made substantial cash deposits in the cooperative bank in the F.Y2014-15 and the assessee has not filed the return of income for the A.Y. 2015-16. The Assessing Officer (A.O) has reason to believe that income as escaped assessment and issued notice u/sec 148 of the Act dated 31.03.2022 and there was no compliance to the notice. Subsequently, the AO has issued notice u/sec 142(1) of the Act to explain the sources of cash deposits in the bank account with evidences and but there was no response from the assessee. The A.O find that the assessee has not made submissions on the disputed issue in spite of providing adequate opportunities of hearing and finally the A.O considering the information available on record has invoked the provisions of section 144 of the Act and made addition of unexplained cash deposits u/sec69A of the Act and assessed the total income of Rs.72,07,000/ -and passed the order u/sec147 rws144 r.w.s144B of the Act dated 22.02.2023.
4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) has considered grounds of appeal, statements of facts, finding of the Ld.AO and has issued notice of hearing and since there was no compliance, CIT(A) considering the information available on record has confirmed the action of the Assessing Officer and dismissed the assessee’s appeal. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon’ble Tribunal.
5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the AO overlooking the information of the assessment proceedings and the Ld.AR mentioned that non-compliance of notices before the CIT(A) is not a wanton act but circumstances beyond the control of the assessee and the assessee has a good case on merits and shall substantiate with material evidences and prayed for an opportunity before the Lower authorities. Per contra, the Ld. DR supported the order of CIT(A).
6. We heard the rival submissions and perused the material on record. Prima facie CIT(A) has passed the order considering the facts that there is no compliance in spite of providing adequate opportunity of hearing and notices were issued. Therefore, CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismiss the appeal ex-parte confirming the action of the Assessing Officer. Whereas the CIT(A) has issued notices referred at Para4 of the order but there was no response. Whereas the assesse has raised grounds of appeal challenging the addition u/sec69A of the Act made by the A.O and there could be various reasons for non-appearance/ non -compliance which cannot be overruled. Therefore, considering the facts, circumstances, submissions and principles of natural justice, we shall provide with one more opportunity of hearing to the assessee to substantiate th e case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the disputed issue to the file of the CIT(A) to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal. And the grounds of appeal of the assesse are allowed for statistical purposes.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes. ITA.No.1684/PUN/2026 for A.Y. 2015-16.
8. As the facts and circumstances in the penalty appeal is identical to ITA No. 1684/PUN/2026 for the A.Y 2015 – 16 and the decision rendered in above paragraphs 6&7 would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the assessee is allowed for statistical purpose.
9. In the result, the two appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 31.07.2026.
