Reassessment notice issued following proper procedure in accordance with CBDT instructions, pursuant to Supreme Court mandates, is valid; however, the appellate authority must provide sufficient opportunity of being heard to satisfy the principles of natural justice, permitting a remand for statistical purposes.

आदेश /O R D E R

PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:

1. This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1069602044(1) dated 10.10.2024 for the A.Y.2017-18 arising out of order passed under section 143(3) r.w.s. 147 of Income Tax Act, 1961 (in short ‘Act’) dated 23.05.2023.

2. Brief facts of the case are that, assessee filed its return of income declaring a loss of Rs.2,22,563/-. The case was selected for scrutiny, for the reason, that the assessee has made cash deposits amounting to Rs.69,43,000/- during the demonetization period into the bank account of the assessee. Further, it was also observed that the total credits in the bank account is Rs.7,94,44,149/- whereas turnover declared by the assessee is Rs.5,59,44,879/-. Initially notice under section 148 of the Act was issued under un-amended provisions of the Act on 30.06.2021. Consequent to the directions of the CBDT vide Instruction 1/2022 dated 11.05.2022, notice issued under section 148 of the Act dated 30.06.2021 was deemed to be considered as show-cause notice under section 148A(b) of the amended Act. Considering the reply of the assessee dated 15.06.2022 order under section 148A(d) was passed on 26.07.2022 and notice under section 148 was issued on 26.07.2022. On a perusal of the submissions made by the assessee during the re-assessment proceedings, the Ld. AO did not accept the reply of the assessee with respect to the cash deposits made by the assessee during the demonetization period. Ld. AO observed that assessee has declared cash deposits during demonetization period while filing the income tax return at Rs.42,03,000/- whereas the actual cash deposits during demonetization period as per bank account was Rs.69,43,000/-. The Ld. AO not being satisfied with the explanation furnished by the assessee, proceeded to add a sum of Rs.27,40,000/- (Rs.69,43,000/- - Rs.42,03,000/-) under section 69A r.w.s. 115BBE of the Act.

3. Aggrieved by the order of the Ld. AO, assessee filed an appeal before Ld.CIT(A). Ld. CIT(A) dismissed the appeal of the assessee, as the assessee has not responded to any of the notices issued during the appellate proceedings.

4. On being aggrieved by the order of the Ld. CIT(A) assessee is in appeal before us by raising various grounds as follows: -

“1. On the facts and circumstances of the case and in law, the order passed u/s 143(3) r.w.s 144B of the Income Tax Act, 1961, dt.23.05.2023, as upheld by the Ld. Commissioner of Income Tax (Appeals) "NFAC", vide order u/s 250 dt. 10.10.2024, is contrary to the facts of the case and the provisions of law.

2. The Ld. CIT(A) disposed of the appeal ex-parte without granting a reasonable opportunity to the assessee, thereby violating theprinciples of natural justice.

3. The disposal of the appeal in limine by the Ld. CIT(A) is against theprovisions of Section 250(6) of the Income Tax Act.

4. The learned CIT (A) ought to have appreciated the fact that when assessee has explained the sources before the AO for the deposits made in bank account, with cogent reasons, the learned CIT(A) should have deleted the add