Case Law Details
Mohanlal S. Gachi Vs ITO (ITAT Mumbai)
Introduction: In a case presented before the Income Tax Appellate Tribunal (ITAT) in Mumbai, Mohanlal S. Gachi faced a challenge stemming from communication discrepancies between himself and his tax consultant. The heart of the matter revolved around a non-reply to a notice from the Commissioner of Income Tax (Appeals) due to this miscommunication.
Analysis: The issue began when Mohanlal S. Gachi’s account displayed a cash deposit of Rs.12,81,952/-. While this was explained as income from jewellery-making labour charges, an addition of Rs.2,86,737/- was made based on peak cash credit under section 68 of the Income Tax Act, 1961. An appeal was subsequently filed against the assessment order, leading to further notices from the CIT(A).
However, when it was time to reply to these notices, Gachi, while prepared with a response, experienced a miscommunication with his tax consultant, leading to a failure in uploading the reply. Consequently, the CIT(A) dismissed the appeal in an ex-parte manner. The focal point of contention is this miscommunication, which became the crux of the appeal to ITAT Mumbai.
While the Departmental Representative insisted that the assessee was granted ample opportunity to respond, the evidence presented showed that the reply was ready but not uploaded due to the stated miscommunication.
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