Case Law Details
Gangalam Oil and Foods Pvt. Ltd. Vs ITO (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) Chennai reviewed an appeal by Gangalam Oil and Foods Pvt. Ltd. regarding the confirmation of an addition of ₹42.72 lakh, representing cash deposits made during the demonetization period for the assessment year 2017-18. The addition was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] under the National Faceless Appeal Centre (NFAC) after the assessee failed to provide any explanation or representation despite multiple opportunities. The Assessing Officer (AO) had previously framed the assessment under Sections 147, 144, and 144B of the Income-tax Act, 1961. The assessee, unable to substantiate the source of cash deposits, appealed to ITAT, seeking another opportunity to present its case.
While the assessee was negligent in justifying the cash deposits, ITAT considered the principle of natural justice and granted another opportunity. ITAT directed the AO to conduct a fresh assessment (de novo assessment) and allowed the assessee to present relevant evidence. The case was remanded back to the AO with specific instructions, emphasizing the importance of due process in tax assessments. The appeal was allowed for statistical purposes, ensuring the assessee gets a fair chance to explain the cash deposits made during demonetization.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 22-07-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.147 r.w.s. 144 r.w.s 144B of the Act on 1003-2022. The sole grievance of the assessee is confirmation of addition of Rs.42.72 Lacs which represent cash deposits in the bank accounts during demonetization period. The Ld. CIT(A) confirmed the same since the assessee failed to make any representation therein despite being provided with various opportunities of hearing. Aggrieved, the assessee is in further appeal before us. The Ld. AR has pleaded for another opportunity to the assessee to substantiate the same which has been opposed by Ld. Sr. DR.
2. Though the assessee has remained negligent in substantiating the source of cash deposit, however, accepting the plea of Ld. AR and keeping in mind the principle of natural justice, we deem it fit to grant another opportunity to the assessee to substantiate its case before lower authorities. Accordingly, the assessment is restored back to the file of Ld. AO for de novo assessment with a direction to the assessee to substantiate its case.
3. The appeal stand allowed for statistical purposes.
Order pronounced in open court on 09th December, 2024.
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