Sanjay Store Vs ITO (ITAT Delhi)
In a recent judicial development, the Income Tax Appellate Tribunal (ITAT), Delhi bench, has delivered a significant order providing relief to M/s Sanjay Store, a partnership firm. The Tribunal set aside an ex-parte assessment concerning a ₹4.16 crore cash deposit made during the 2016 demonetization period, citing the severe personal challenges faced by one of its partners. The case has been remitted to the Assessing Officer (AO) for a fresh assessment, ensuring a proper opportunity for the assessee to present its arguments.
The dispute, docketed as Sanjay Store Vs ITO for the Assessment Year 2017-18, arose from data scrutinised by the Income Tax Department. Records indicated that Sanjay Store had deposited a substantial sum of ₹4,16,90,000 in cash into its bank account at SBI, Bali Nagar, New Delhi, during the demonetization drive. Crucially, the firm had not filed its return of income under Section 139(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), for the relevant assessment year.
Procedural Lapses and Ex-Parte Assessment
Upon detecting the significant cash transactions, the Assessing Officer initiated proceedings by issuing a notice under Section 142(1) of the Act. This notice, dated December 4, 2017, mandated the assessee to file its return of income by January 3, 2018. Subsequent communications were also dispatched through the Income Tax Business Application (ITBA) Portal, attempting to elicit a response and explanation for the substantial deposits.
