Pradipkumar Arvindbhai Kothari vs. ITO

Parties Involved

Facts Summary

The Assessing Officer of the assessee, Shri Pradipkumar Arvindbhai Kothari, observed that the assessee had deposited cash amounting to Rs.14,14,000/- in his bank accounts with State Bank of India and HDFC Bank during the demonetization window from November 8, 2016 to December 30, 2016. The due date for filing the return for Assessment Year (AY) 2017-18 was August 5, 2017, but the assessee failed to file the return under Section 139(1) of the Income Tax Act, 1961. The Assessing Officer issued several notices of hearing, which remained uncompiled with. The Assessing Officer issued a notice under Section 142(1) on March 13, 2018, requiring the assessee to submit a true and correct return of income, which should have been filed by March 31, 2018. Again, the assessee did not comply. Subsequently, a second notice under Section 142(1) was issued on June 12, 2019, requesting clarification about the cash deposits made during the demonetization period, with a deadline of June 24, 2019. The assessee once again failed to respond. A further notice was issued on September 12, 2019, fixing the date of hearing for September 16, 2019; however, there was still no compliance or request for adjournment from the assessee. Therefore, the Assessing Officer observed that throughout the assessment proceedings, the assessee did not provide the required details regarding the cash deposits, and the Assessing Officer issued notice under Section 133(6) to the banks to obtain bank statements and KYC detail…

Legal Issues

• 1. The order passed by U/s.250 passed on 18.03.2022 by NFAC, Delhi upholding the addition of Rs.1,11,98,244/- made by A.O. towards the entire credits in the bank accounts during FY relevant to AY 2017-18 as unexplained money u/s 69A is wholly illegal, unlawful and against the principles of natural justice.
• 2. The ld. NFAC has grievously erred in law and or on facts in not appreciating that there could not be compliance to the notices claimed to be issued by AO because the appellant was not informed by the previous tax consultant so that the appellant had no knowledge about the same. Thus, there was a sufficient cause for failure to comply with the notices claimed to be issued by NFAC.

Judgment Outcome

Decided in favour of Assessee.

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