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.
