Aryavysya Seva Sangham Vs ITO (ITAT Hyderabad)
The Income Tax Appellate Tribunal (ITAT) Hyderabad heard an appeal filed by Aryavysya Seva Sangham against the order of the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (CIT(A)-NFAC) Delhi, concerning the Assessment Year 2017-18. The core issue revolved around the addition of Rs. 33,34,200 as unexplained money under Section 69A of the Income Tax Act, 1961, by the Assessing Officer (AO). This addition stemmed from substantial cash deposits amounting to Rs. 40,43,330 made by the assessee, an Association of Persons (AOP), in its bank accounts during the demonetization period. The Department initiated scrutiny under “Operation Clean Money” due to the assessee’s failure to file its income tax return for the relevant assessment year, leading to a notice under Section 142(1). Subsequently, as the assessee did not file the return, the AO completed a “best judgment assessment,” determining the total income at Rs. 34,66,350.
Aggrieved by this assessment, the assessee appealed to the CIT(A), who provided partial relief. Dissatisfied with the outcome, the assessee approached the ITAT. The counsel for the assessee argued that while some details were submitted to the CIT(A), the appeal was rejected and the order passed ex-parte, violating principles of natural justice and denying sufficient opportunity to present evidence. The counsel requested another opportunity before the CIT(A) to substantiate their claims with necessary details and evidence, specifically pointing out a factual inaccuracy regarding the number of bank accounts considered by the AO. Conversely, the Departmental Representative (DR) contended that the assessee failed to adequately explain the cash deposits to the CIT(A), and these credits were not recorded in the assessee’s books. Thus, the DR argued that the CIT(A) rightly rejected the adjournment request and disposed of the appeal ex-parte, urging the Tribunal to uphold the CIT(A)’s order.
