Maulik Ashokkumar Shah Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has remitted the case of Maulik Ashokkumar Shah back to the Assessing Officer (AO) for a fresh assessment. The decision comes after the assessee’s appeal against an ex-parte order by the Commissioner of Income Tax (Appeals) [CIT(A)], which had upheld an addition of Rs. 26.50 lakh for unexplained cash deposits made during the demonetization period. The Tribunal emphasized the principles of natural justice, granting the assessee one final opportunity to present his case.
The dispute pertains to the Assessment Year 2017-18. Maulik Ashokkumar Shah, engaged in a retail mobile phone business, had filed his income tax return declaring a total income of Rs. 3,77,650/-. During the assessment proceedings, the AO identified a significant cash deposit of Rs. 26,50,000/- in the assessee’s bank account between November 9, 2016, and December 31, 2016, a period coinciding with the demonetization drive. As the assessee failed to provide a satisfactory explanation or supporting evidence for the source of this cash, the AO treated it as unexplained income and added it to his taxable income under relevant provisions of the Income-tax Act, 1961.
The assessee’s appeal against this addition was heard by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi. However, despite multiple notices issued by the CIT(A) on various dates, including July 11, 2024, January 2, 2025, February 21, 2025, and March 8, 2025, the assessee failed to respond or appear. Consequently, the CIT(A) dismissed the appeal through an ex-parte order dated March 15, 2025, upholding the AO’s addition.
