Somnath Kelavni Mandal Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad dismissed the appeal filed by Somnath Kelavni Mandal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre, Delhi. The case involved an ex-parte assessment order under Section 144 of the Income Tax Act, 1961, for the assessment year 2016-17. The trust, which manages educational institutions, had deposited ₹51,17,000 in demonetized currency during the financial year, which the Assessing Officer (AO) classified as unexplained money under Section 69A of the Act.
During the assessment proceedings, the assessee claimed that the deposits represented student fees collected before demonetization, which were later deposited in the bank. However, the AO rejected this explanation, citing discrepancies between the cash book records and the assessee’s claims. Consequently, the AO treated the cash deposit as unexplained and levied tax under Section 69A. The assessee challenged this order before CIT(A), which provided five hearing opportunities between January 2021 and February 2024. The assessee failed to respond to any of these notices, leading CIT(A) to uphold the AO’s decision.
Subsequently, the assessee approached ITAT Ahmedabad, arguing that the deposits were legitimate and recorded in the books of accounts. The grounds of appeal challenged the AO’s reliance on assumptions and the application of Section 69A to cash deposits of ₹9,13,000 and ₹42,04,000 in different bank accounts. Despite multiple hearing opportunities, the assessee failed to appear or authorize a representative to present its case. Even after due service of hearing notices through RPAD, no materials were submitted to support the appeal.
