Gajanan Gas Agency Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune has remitted the case of Gajanan Gas Agency back to the Assessing Officer (AO) for a fresh examination concerning a cash deposit of Rs. 10,42,800 made during the demonetization period. The assessee, a partnership firm engaged in the retail distribution of GO GAS, appealed against the order of the CIT(A)/NFAC, Delhi, for the assessment year 2017-18. The initial assessment was completed ex-parte by the AO under section 144 of the Income Tax Act, 1961, leading to the addition of the entire cash deposit under section 69A due to the assessee’s failure to respond to notices.
Before the CIT(A)/NFAC, the assessee provided details to explain the cash deposits. However, the CIT(A) dismissed the appeal without examining the merits of the case, solely citing non-compliance with the provisions of section 249(4)(b) of the Act, which pertains to the payment of advance tax when no return of income has been filed. The assessee subsequently appealed this decision to the ITAT Pune.
During the ITAT proceedings, the assessee’s counsel argued that the firm maintained regular books of account and possessed sufficient cash balance to substantiate the deposits. It was contended that the firm, dealing in essential commodities like domestic gas, was authorized to accept old currency denominations during the demonetization phase. The assessee furnished supporting evidence, including sales registers, cash books, and financial statements, requesting the issue be sent back to the AO for a thorough review. The ITAT observed that the CIT(A)’s dismissal based on section 249(4)(b) appeared to lack justification as there was no finding that the assessee had taxable income in preceding years necessitating advance tax payment. Considering the totality of facts and in the interest of justice, the ITAT set aside the CIT(A)’s order and restored the matter to the jurisdictional AO for a de novo assessment. The ITAT directed the AO to provide the assessee with a reasonable opportunity of being heard during the fresh proceedings. The assessee’s appeal was allowed for statistical purposes.
