Samiulla Vs ITO (ITAT Bangalore)
Entire Bank Credits Can’t Be Added Blindly: Three Notices Aren’t Enough: ITAT Restores Bank Credit Case to CIT(A)
Natural Justice First: 144 Assessment Needs Care: Matter Remanded for Proper Adjudication
Bangalore ITAT “B” Bench, in Samiulla Vs ITO (ITA No. 2405/Bang/2024, AY 2018-19; order dated 31.01.2025), set aside the order of CIT(A), NFAC & remanded the matter for fresh adjudication, subject to payment of ₹5,000 as cost.
Assessee had not filed return of income, and the case was reopened u/s 147 due to large credits in bank accounts. Owing to non-compliance with notices, AO completed best-judgment assessment u/s 144, treating the entire bank credits as unexplained. CIT(A) affirmed the additions after issuing only three hearing notices.
Tribunal observed that while Assessee was at fault for non-compliance, entire bank credits cannot be mechanically treated as unexplained without cogent material. It further held that issuance of merely three notices by CIT(A) does not meet the requirement of proper opportunity, especially where additions are substantial.
Considering the undertaking of Assessee to cooperate & in the interest of natural justice, ITAT restored the matter to CIT(A) for de-novo adjudication, directing Assessee to deposit ₹5,000 under “Others” head and warning that no further leniency would be granted in case of default. Appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
