Case Law Details
Radhakrishna Vs ITO (ITAT Bangalore)
Introduction: The recent order by the Income Tax Appellate Tribunal (ITAT) Bangalore in the case of Radhakrishna vs ITO addresses a crucial issue related to cash deposits made during the demonetization period. The ITAT remanded the matter for reconsideration, highlighting the claim that the cash deposits are attributed to business receipts of a bar and restaurant. This article provides an in-depth analysis of the case, shedding light on the circumstances, arguments, and implications.
Detailed Analysis: The appellant, Radhakrishna, challenged the CIT(A)’s order dated 15.03.2023, pertaining to the Assessment Year 2017-18. The appeal was filed with a delay of 150 days, and the application for condonation of delay was accepted by the ITAT. The original appeal before the CIT(A) was dismissed ex-parte due to the non-compliance of hearing notices by the assessee.
On the merits of the case, Radhakrishna claimed to be the manager of a bar and restaurant and asserted that the cash deposits under consideration were business receipts from the said establishment. The contention was that there is sufficient evidence to substantiate the source of these cash deposits. The ITAT, recognizing the potential merit in the assessee’s claim, decided to provide another opportunity for a fair representation.
During the hearing, the learned AR argued that Radhakrishna, being an illiterate person with limited schooling, might not have been aware of notices sent via email, which could have ended up in the spam folder. The AR requested a restoration of the case to the files of the CIT(A) to allow proper representation.
The ITAT, considering the principles of justice and equity, decided to remand the matter to the CIT(A). The direction emphasized the need for cooperation from the assessee with the Revenue and discouraged unnecessary adjournments. The goal is to ensure a fair and comprehensive examination of the case.
Conclusion: The ITAT’s decision to remand the case in Radhakrishna vs ITO signifies the importance of providing a fair opportunity for representation, especially when substantial claims are made regarding the nature and source of cash deposits during specific periods like demonetization. The case underlines the need for individuals to be vigilant about communication from tax authorities, and it also acknowledges the challenges faced by those with limited education.
As the matter returns to the CIT(A) for reconsideration, it opens the door for a more detailed examination of the evidence presented by Radhakrishna to support the claim that the cash deposits are linked to business receipts from the bar and restaurant. The outcome of this case will likely influence future cases where individuals contend that their cash deposits, made during unique periods like demonetization, are tied to legitimate business activities.
In conclusion, the ITAT’s decision in Radhakrishna vs ITO highlights the intricacies of cases involving cash deposits, requiring a balance between tax compliance and fair representation. The remand offers an opportunity to address the specifics of the appellant’s claims and reinforces the principles of justice and cooperation in tax proceedings.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 15.03.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.
2. There is a delay of 150 days in filing this appeal. Assessee has filed a petition for condonation of delay stating therein the reasons for the belated filing of this appeal. I have perused the reasons stated in the application for condonation of delay. I am of the view that there is reasonable cause for late filing of this appeal. Hence, I condone the delay in filing this appeal and proceed to dispose off the same on merits.
3. At the very outset, I notice that the appeal filed before the CIT(A) was dismissed ex-parte since hearing of notices issued from the Office of the First Appellate Authority (FAA) was not complied with by the assessee. The learned AR submitted that assessee is an illiterate person and had done schooling only till 9th standard under the Kannada medium. It was submitted that notice sent through email might have settled in spam folder and assessee was not aware of the same. It was prayed that in the interest of justice and equity, matter may be restored to the files of the CIT(A) so that assessee can properly represent his case.
4. Learned Standing Counsel was duly heard.
5. I have heard the rival submission and perused the material on record. The issue on merits is with regard to cash deposits made during the demonetization It is the claim of the assessee that he is manager at a bar and restaurant. It was stated that cash deposits are out of the business receipts of the said bar and restaurant. Assessee claims that he has enough proof to explain the source of cash deposits. In the interest of justice and equity, I am of the view that one more opportunity ought to be provided to the assessee. Assessee is directed to cooperate with the Revenue and shall not seek unnecessary adjournments in the matter. For a proper disposal of the case, the issue is restored to the files of the CIT(A). It is ordered accordingly.
6. In the result, appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on the date mentioned on the caption page.
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