ITAT admits additional evidences as assessee died and legal heirs could not collect it in time  

ITAT admits additional evidences as assessee died before assessment proceedings and it could not be collected in time by legal heirs

ABCAUS Case Law Citation
ABCAUS 3595 (2022) (05) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in restricting the addition made u/s 69A of the Income Tax Act, 1961 (the Act).

 During the course of assessment proceedings the Assessing Officer (AO) noticed that the assessee had made large amount of cash deposit in the bank account. 

The AO asked the assessee to explain the source of deposit.  The assessee explained the source of cash deposit to be gifts and jewel loan given from HUF account but no documentary evidence was produced.

Therefore, the AO added the amount of cash deposit in the bank account u/s 69A of the Act as unexplained money.

Before CIT(A) also assessee did not produce any evidence except a break-up of cash deposit. The assessee explained that he was engaged in the business of pawn broking, lends money and pledges jewels and that the borrowers deposited cash in assessee’s bank account to repay the borrowings.  

The CIT(A) accepted the explanation for the part of the amount but as the assessee could not furnish any explanation except that the amount received from relatives and members of HUF, the CIT(A) confirmed the part addition.

Before the Tribunal, the assessee legal heir filed the additional evidence explaining the sources under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963.

The Revenue opposed admissibility of additional evidence and for this reason stated that these evidences were available to the assessee even during the course of original assessment proceedings or at the time of first appellate proceedings.

The Tribunal observed that the said evidences could not be gathered as claimed by assessee that assessee who was managing the affairs died before the completion of assessment and these were collected by the legal heirs after lot of persuasion and by that time, order of CIT(A) was also passed.

The Tribunal in view of the mercy petition filed that these  evidences  be admitted as assessee passed  away  before assessment proceedings and these evidences could not be gathered as the assessee’s legal heirs were not aware about the details, took a sympathetic view and admitted  the additional evidences for the  reason that the assessee died and  the legal heirs could not collect the evidences.

Also, the council for the assessee stated that he is ready to pay a cost of Rs. 50,000/- to be paid to State Legal Services Authority at Hon’ble High Court.

In view of the above submissions, and the fact that the assessee had died  before the assessment proceedings and the evidences could not be collected, the ITAT admitted the evidences and remanded the matter back to the file of the AO for fresh adjudication.

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