Salim Ali Darugar Vs ITO (ITAT Panaji)
The Income Tax Appellate Tribunal (ITAT), Panaji Bench, heard an appeal by Salim Ali Darugar against the order of the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals) [CIT(A)], which had sustained the Assessing Officer’s (AO) addition of ₹28,01,500 under Section 69A of the Income Tax Act. This addition was made due to unexplained cash deposits during the demonetization period in Financial Year 2016-17. The AO had passed an order under Section 144 after the assessee provided only partial details and failed to fully substantiate the deposits despite notices under Sections 143(2) and 142(1). The CIT(A) upheld the AO’s action, citing the assessee’s lack of proper compliance with hearing notices and rejection of additional evidence.
Before the ITAT, the assessee’s representative argued that the CIT(A) erred in confirming the AO’s order and requested an opportunity to present material evidence. The ITAT observed that while the CIT(A) passed the order due to the assessee’s non-participation despite opportunities, there could be valid reasons for the lack of compliance and for not filing new evidence before the CIT(A). Considering the principles of natural justice, the Tribunal decided to provide the assessee with another chance to substantiate their case. Consequently, the ITAT set aside the CIT(A)’s order and remitted the disputed issues back to the CIT(A) for fresh adjudication. The CIT(A) is directed to provide the assessee with adequate hearing opportunities and to consider the submitted information. The assessee’s appeal was allowed for statistical purposes.
