ITAT Dehradun Upholds Relief for Assessee: Cash Deposits Explained by Business Turnover

The Income Tax Appellate Tribunal (ITAT), Dehradun Bench, recently delivered a significant judgment in the case of ACIT Vs Ravi Lumba, dismissing the appeal filed by the Revenue Department. The Tribunal confirmed the order of the Commissioner of Income Tax (Appeals), holding that the Assessing Officer (AO) cannot allege a violation of natural justice or Rule 46A of the Income Tax Rules, 1962, when they explicitly failed to respond to remand proceedings.

The case pertains to the Assessment Year 2017-18 and addresses critical issues regarding ex-parte assessments under Section 144 of the Income Tax Act 1961, and the verification of cash deposits made during the demonetization period.

Background of the Case

The dispute originated from an assessment order passed ex-parte under Section 144 of the Income Tax Act 1961. During the assessment proceedings, the AO identified substantial cash deposits and payments related to stamp duty. Consequently, these amounts were treated as unexplained money and added to the income of the assessee.