2023 (4) TMI 127 - AT - Income Tax

Tribunal confirms addition of deemed income under Income Tax Act for failure to justify unexplained cash deposits

Dhirajlal Ratilal Maniyar Dipak P. Shah & Co Versus ITO, Ward-5 Surendranagar.

The Tribunal upheld the CIT(A)'s decision to add Rs.19,53,079/- as deemed income under section 69A of the Income Tax Act for the Asst. Year 2011-12. The ... Unexplained cash deposit u/s.69A - non-compliant attitude of the assessee, both during the assessment and appellate proceedings, and non-compliance of various statutory notices CIT(A) confirmed the finding of the AO in treating the impugned deposits as deemed income - HELD THAT:- We find that the assessee was given a number of opportunities to defend his case before authorities below to justify the impugned deposits made in the Bank. Various statutory notices issued by Revenue authorities to the assessee remained non-complied, not to talk of participation in the proceedings. Both the authorities have recorded a finding to this effect, which have been reproduced by us hereinabove. Even before the Tribunal, after filing appeal, assessee has not come forward to attend in response to any of the notices nor filed any submissions. Therefore, it is clear that the assessee except coming forward to file appeals before the appropriate authorities, is not interested in following up with its matter. Therefore, the order of the ld.CIT(A) upholding the addition calls for no interference. Thus, grounds of appeal raised by the assessee are accordingly rejected. Issues:1. Appeal against order passed by CIT(A) under section 250(6) of the Income Tax Act, 1961 for the Asst. Year 2011-12.2. Assessee's failure to attend hearings and provide explanations.3. Addition of unexplained cash deposits under section 69A.4. Failure to justify the source of deposits with supporting evidence.5. Non-compliance with statutory notices and lack of participation in proceedings.6. Adjudication of appeal ex parte due to assessee's lack of interest.Issue 1: Appeal against CIT(A) OrderThe appeal was filed by the assessee against the CIT(A)'s order under section 250(6) of the Income Tax Act, 1961 for the Assessment Year 2011-12. The assessee failed to attend the hearings, leading to an ex parte adjudication of the appeal.Issue 2: Assessee's Non-AttendanceThe assessee, despite multiple opportunities, did not attend the hearings or provide any explanations. The Registry noted the lack of representation or power of attorney. This non-attendance demonstrated the assessee's disinterest in pursuing the appeal.Issue 3: Addition of Unexplained Cash DepositsThe primary issue raised in the appeal was the CIT(A)'s failure to delete the addition of Rs.19,53,079/- on account of cash deposits with State Bank of India, treated as unexplained deposits under section 69A of the Act. The AO found that the assessee failed to justify the source of the deposits, leading to the addition.Issue 4: Failure to Justify Source of DepositsDespite opportunities, the assessee did not provide any explanation or supporting evidence for the cash and other deposits made in the bank account. The AO proceeded to treat the deposits as deemed income under section 69A due to the lack of explanation from the assessee.Issue 5: Non-Compliance and Lack of ParticipationThroughout the assessment and appellate proceedings, the assessee did not comply with statutory notices, participate in hearings, or provide any details regarding the source of the deposits. The CIT(A) confirmed the addition based on the assessee's non-compliance and failure to justify the deposits.Issue 6: Ex Parte AdjudicationDue to the assessee's consistent non-attendance and lack of interest in the proceedings, the Tribunal upheld the CIT(A)'s decision to add the amount of Rs.19,53,079/- as deemed income. The appeal was dismissed as the assessee failed to provide any material to support their case.In conclusion, the Tribunal upheld the CIT(A)'s decision, emphasizing the assessee's failure to justify the deposits and lack of participation throughout the proceedings. The appeal was dismissed, and the addition of Rs.19,53,079/- as deemed income under section 69A of the Income Tax Act was upheld.