ITAT Upholds 28.59 Lakh Addition on Taxpayer for Unexplained Cash Deposits; Appeal Dismissed

ITAT Mumbai dismissed the taxpayer’s appeal as he repeatedly failed to respond to notices or attend hearings. The reassessment for unexplained cash deposits resulted in an addition of Rs. 28.59 lakh, upheld due to non-prosecution.

The present appeal has been filed by a taxpayer named Mahesh Narsinghani in the ITAT Mumbai, challenging an order dated February 04, 2025, passed by the CIT(A)/NFAC, Delhi. The impugned order had dismissed the appeal of the assessee, as he did not answer to any of the notices issued by them.

The assessee electronically filed his income tax return (ITR) for the assessment year 2017-18, declaring ‘zero’ taxable income. The case was later reopened by the Assessing Officer (AO) under Section 148 of the Income Tax Act, on the grounds of the fact that the assessee had deposited substantial cash in his bank accounts in Bank of Baroda, J&K Bank, and Kotak Mahindra Bank during the year in consideration.

As a result, a notice was issued to the assessee. However, the assessee did not file any return in response to the Section 148 notice. Additionally, he did not respond to the notice issued under Section 142(1) of the Act. In conclusion, the AO issued the final order dated May 22, 2023, under Sections 147/144/144B, without hearing the side of the assessee, making an addition of Rs. 28,59,760 to the assessee’s income.

The tribunal scheduled the personal hearing on 16.07.2025, 21.08.2025, 08.10.2025, 16.12.2025, and 23.12.2025. However, the assessee only appeared for the first hearing and furnished letters for adjournment for the subsequent two hearing dates. No one attended the remaining hearings. As per the law, the tribunal has the power to dismiss any appeal in case the assessee did not present its side despite being given several reasonable opportunities. Therefore, the tribunal dismissed the present appeal of the assessee.