2025 (7) TMI 867 - AT - Income Tax

Validity of order passed by CIT/NFAC u/s. 250 - proceedings u/s.147 r.w.s.144 r.w.s.144B making addition on account of failure of assessee to explain the cash deposit made during demonetization period in his bank account - HELD THAT - Though the assessee challenged the addition before ld.CIT(A) but failed to appear nor could file any written submission on the four dates of hearing fixed on 09.11.2024 12.11.2024 07.01.2025 and 15.01.2025. We further observe that ld.CIT(A) has not passed a speaking order as contemplated u/s.250(6) of the Act. We find that in the case in the case of PCIT (C) vs. Premkumar Arjundas Luthra (HUF) 2016 (5) TMI 290 - BOMBAY HIGH COURT has held that ld.CIT(A)/NFAC is obliged to dispose of the appeal on merits even in an exparte order. We therefore taking liberal approach and also in the larger interest of justice deem fit to restore the issues raised on merits to the file of Ld. CIT(A) for necessary adjudication and for deciding the issue in accordance with law and pass a speaking order as contemplated u/s.250(6) of the Act. Appeal of the assessee is allowed for statistical purposes.

Summary

Summary:The Income Tax Appellate Tribunal (ITAT) Pune heard an appeal by the assessee for A.Y. 2017-18 against the order dated 29.01.2025 of the National Faceless Appeal Centre (NFAC) under section 250 of the Income-tax Act, 1961, arising from an assessment order under sections 147, 144, and 144B. The assessee failed to appear despite multiple hearing opportunities, and the CIT(A) merely affirmed the AO's order without a speaking order as required under section 250(6).The AO had made an addition of Rs. 14 lakh to the returned income of Rs. 89,490, on account of unexplained cash deposits during demonetization in the assessee's bank account. The ITAT noted the Bombay High Court's ruling in PCIT (C) vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom), which mandates that the CIT(A)/NFAC must dispose of appeals on merits even if ex parte.Accordingly, the ITAT restored the matter to the file of the CIT(A) for adjudication on merits and directed the CIT(A) to pass a speaking order as contemplated under section 250(6). The assessee is permitted to submit evidence supporting the cash deposits. The CIT(A) may seek a remand report from the AO and provide the assessee a reasonable opportunity of hearing. The assessee must provide updated contact details and avoid unnecessary adjournments. The ITAT set aside the CIT(A) findings and allowed the appeal for statistical purposes.