ITAT Remands Rs. 49.05 Lakh Demonetisation-Era Cash Case Due to Taxpayer’s Medical Absence

ITAT Ahmedabad condoned a 224-day delay and remanded a demonetisation-era cash deposit case after accepting the taxpayer’s medical-related absence. Since CIT(A) decided the matter without hearing the taxpayer, the Tribunal sent the case back to the tax authorities for fresh consideration of the Rs. 49.05 lakh addition under Section 69A.

The case had been filed by a taxpayer named Pravinbhai Babubhai Prajapati before the ITAT Ahmedabad, challenging an order passed by the CIT(A)/NFAC Delhi on November 28, 2024. The case is related to the assessment year 2017-18 and was decided on December 02, 2025. The impugned order had favoured the tax department for making an addition of Rs. 49.05 lakh to the taxpayer’s income under Section 69A as an unexplained deposit/investment.

Previously, the tax department had noticed that the taxpayer made cash deposits worth Rs. 12.05 to his bank accounts in the State Bank of India (SBI) and Ahmedabad Mercantile Cooperative Bank during the period of demonetisation. The department, after scrutinising the return, issued a notice under Section 142(1) of the Act on March 08, 2018, to the taxpayer. The taxpayer missed filing his ITR for the relevant AY; additionally, he neither responded to the issued tax notices nor furnished the required documents before the tax authority.

In conclusion, the tax officer completed the assessment under Section 144 of the Income Tax Act, making an addition of Rs. 49.05 lakh to the taxpayer’s income under Section 69A as an unexplained deposit/investment.

The appeal before the tribunal was filed late by 224 days. However, the tribunal held the delay to be genuine, condoned the delay and accepted the filed appeal. Before the ITAT Ahmedabad, the taxpayer stated that due to his medical conditions, he could not timely file an appeal before the tax officer and also the CIT(A). The taxpayer prayed to grant him one more opportunity to present his side and furnish all the relevant documents/evidence before the tax officer, and the opportunity was given to the assessee, as the credit entry reflected in the bank statement also includes the entry of the loan amount, which was taken by the assessee during the relevant period. However, the tax officer argued that the taxpayer had already been given ample opportunities by both tax authorities and CIT(A).

When the tribunal analysed the arguments of the sides, it noted that the arguments served by the taxpayer were genuine; he was indeed suffering, undergoing surgeries and having held issues since the Covid period, hence could not personally appear for the hearings and took part in the proceedings. Since the final decision by CIT(A) was announced without hearing the assessee, it is against the provisions of natural justice; the tribunal remands the case to the tax authorities for fresh consideration.