ITAT Grants Final Opportunity in ₹99.2 Lakh Cash Deposit Case

In a recent ruling, the Income Tax Appellate Tribunal (ITAT) has provided a final opportunity to an assessee concerning a case involving a substantial cash deposit of ₹99.2 Lakh. This decision comes after the assessee allegedly failed to comply with a notice requiring proof of the source of these funds.

Background of the Case

The case revolves around an addition of ₹99.2 Lakh to the assessee’s income, made by the Assessing Officer (AO) due to the alleged non-compliance. The AO’s decision stemmed from the assessee’s inability to substantiate the source of the cash deposit despite being served a notice.

CIT(A) Order and Initial Appeal

Initially, the assessee appealed the AO’s decision to the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the CIT(A) passed an ex parte order, meaning the decision was made without the assessee’s participation. This was also related to an issue where the AO had estimated ₹7.94 Lakh as business profits.

ITAT Intervention and Decision

Aggrieved by the ex parte order from the CIT(A), the assessee then approached the ITAT. The ITAT, after reviewing the case, has decided to restore the assessee’s appeal.

The ITAT has granted one final opportunity to the assessee to present their case and provide the necessary documentation to prove the source of the ₹99.2 Lakh cash deposit. This decision underscores the importance of due process and fairness in tax assessments. The tribunal emphasized that a fair chance should be given to all parties involved to present their evidence.

The ITAT has directed the CIT(A) to re-examine the case, allowing the assessee to present their arguments and supporting documents. The assessee must now utilize this opportunity to provide conclusive evidence regarding the origin of the cash deposit.