Prabheesh Nair Vs ITO (ITAT Cochin)
The Income Tax Appellate Tribunal (ITAT), Cochin bench, has remanded the case of Prabheesh Nair vs. ITO back to the Commissioner of Income Tax (Appeals) [CIT(A)] for a fresh hearing. The tribunal strongly criticized the CIT(A)’s decision to dismiss the appeal summarily without addressing the case’s merits, which involved a demonetization-era cash deposit. The ruling emphasizes the legal obligation of appellate authorities to provide a reasoned decision, even in cases of non-appearance by the appellant.
The case pertains to the Assessment Year 2017-18. The appellant, Prabheesh Nair, an individual engaged in the business of electrical items, did not file an income tax return for the said year. Consequently, the Income Tax Officer (ITO), Ward 1(3), Kozhikode, issued a notice under Section 142(1) of the Income Tax Act, 1961. When the appellant failed to comply, the ITO proceeded to complete a best-judgment assessment under Section 144. During this process, the ITO made an addition of Rs. 9,22,000/- under Section 69 of the Act, treating the cash deposited in the bank during the demonetization period as unexplained money.
Aggrieved by the ITO’s order, Prabheesh Nair filed an appeal with the CIT(A). However, the CIT(A) dismissed the appeal for non-prosecution, citing the Supreme Court’s decision in CIT v. B.N. Bhattacharjee and Anr [1977]. This dismissal was made without a detailed discussion of the facts or legal points of determination as required by Section 250(6) of the Act.
