Facts of the Case

The assessee, Pradeep Kumar Narsaria, filed his return of income for Assessment Year 2015-16 declaring income of ₹3,04,524. The assessee operated a small Dish-TV recharge shop. The Assessing Officer reopened the assessment on the allegation that cash deposits of ₹2.05 crores were made in a bank account maintained with Corporation Bank, Hazaribagh. The assessee contended that he did not maintain the bank account number referred to by the Assessing Officer. It was submitted that the said account number pertained to the savings bank account with State Bank of India, Lalpur, whereas the assessee’s account with Corporation Bank was a current account bearing a different account number. It was further submitted that cash deposits in the Corporation Bank current account amounted to ₹1,26,87,955 and that no cash deposits were made in the SBI savings account. The assessment was completed ex parte, and the order of the CIT(A) was also passed ex parte.

Issues Involved

Whether the reopening of assessment was valid when based on incorrect bank account particulars, whether the reasons recorded suffered from factual inaccuracies regarding cash deposits, and whether the assessment deserved restoration due to violation of principles of natural justice.

Petitioner’s Arguments

The assessee submitted that the reopening was fundamentally flawed as the Assessing Officer referred to a wrong bank account number and mixed up transactions of two different bank accounts. It was argued that the figure of ₹2.05 crores mentioned in the reasons for reopening did not appear in any of the bank accounts of the assessee. The assessee contended that the reasons recorded were invalid and the assessment deserved to be quashed. Without prejudice, it was submitted that if the matter was to be restored, all legal issues should be kept open.

Respondent’s Arguments

The Revenue submitted that there was non-cooperation by the assessee during assessment proceedings as well as before the CIT(A). It was argued that if the Tribunal was inclined to grant relief, the matter should be restored to the file of the Assessing Officer for verification and fresh adjudication.

Court Order / Findings

The ITAT Ranchi observed that in the reasons recorded for reopening, the Assessing Officer referred to the savings bank account number but relied upon transactions of the current account maintained with Corporation Bank. The Tribunal further noted that the figure of ₹2.05 crores was not reflected in any of the bank accounts produced before it. However, considering that the assessment and appellate orders were passed ex parte, the Tribunal held that in the interest of justice, the matter deserved to be restored to the file of the Assessing Officer for fresh adjudication after granting adequate opportunity of hearing to the assessee. The Tribunal expressly directed that all legal issues raised by the assessee shall remain open.

Important Clarification

The Tribunal clarified that reopening based on incorrect factual assumptions regarding bank accounts and cash deposits requires careful re-examination. Further, where assessments are completed ex parte, restoration for fresh adjudication is warranted to ensure adherence to principles of natural justice.

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes. The matter was restored to the file of the Assessing Officer for fresh adjudication after granting due opportunity of hearing, with all legal issues left open.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769080075_PRADEEPKUMARNARSARIARANCHIVS.ITOWARD21RANCHI.pdf

 

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