Case Law Details
Vivekkumar S Bhavsar Vs ITO (ITAT Ahmedabad)
In the case of Vivekkumar S Bhavsar vs ITO, heard by the ITAT Ahmedabad, the assessee appealed against an exparte appellate order confirming additions made by the AO relating to unexplained cash deposits. The appeal was based on the grounds of insufficient opportunity and lack of findings by the Commissioner of Income Tax (Appeals) (CIT(A)).
Background: The assessee, an individual, filed their return of income for the Assessment Year 2017-18, declaring a total income of Rs. 2,05,970. The return was selected for limited scrutiny due to large cash deposits during the demonetization period. Despite multiple notices, the assessee did not respond, leading to the addition of the cash deposits to their income.
Assessee’s Argument: The assessee, represented by counsel, contended that they were unable to provide details due to the COVID-19 pandemic and the closure of their business activity before the completion of assessment. They also claimed that the ex-parte order was a result of their Chartered Accountant’s failure to communicate the appellate hearing details.
Court’s Ruling: While acknowledging the lack of cooperation from the assessee and their consultant, the ITAT deemed it unfair to entirely treat the cash deposits as income. To uphold principles of natural justice, the matter was remanded back to the Assessing Officer (AO) with a condition to impose a cost of Rs. 5000, payable to the Prime Minister National Relief Fund. The AO was directed to provide the assessee with a proper opportunity to present necessary documents and pass a fresh assessment order in accordance with the law.
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