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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
O R D E R PER OM PRAKASH KANT, A.M.: This appeal by the assessee is directed against order dated 27.04.2023 passed by Ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “Ld.CIT(A)”] for assessment year 2011-12, raising following grounds:
1. “That the Ld. National Faceless Appeal Centre(NFAC) has grossly erred in facts and circumstances of the case to dismiss the appeal without adjudicating the facts mentioned in the assessment order.
Nitesh Kumar Jain vs IT O 2. That the addition made at Rs.7,94,006/- on account of excess deposit in bank account without reconciliation of the re-deposit amount is not justified.
That the addition made at Rs.4,33,144/- on account of excess deposit in bank account without reconciliation of the re-deposit amount is not justified.
4. That the assessee craves leave to raise any other ground/s on or before the date of hearing to prove that the order is bad.”
Briefly stated facts of the case are that the assessee had not filed his return of income for the assessment year under consideration and therefore, in view of the information of cash deposit of Rs.17,81,050/- in the Saving Bank account of the assessee, the Assessing Officer (in short “AO”) recorded the reason to believe that income escaped assessment and re-opened the assessment u/s 147 of the Income Tax Act, 1961 (in short “the Act”) by way of issuing notice u/s 148 of the Act on 31.03.2016. The assessee did not respond said notice issued u/s 148 of the Act, therefore, the AO subsequently issued notice u/s 142(1) of the Act. In view of the non-compliance of the notices, the AO also issued penalty notice for non-compliance of the various notices. In response to the show cause notice issued, as to why assessment should not be completed ex-parte on the basis of material available on record, the assessee on 22.08.2016 informed that his nature of 2 | P a g e
Nitesh Kumar Jain vs IT O business was of trading in ‘khali’, ‘chappar’ and ‘aata’ and the cash deposit was sale proceeds of the business of trading of those products. The assessee furnished detail of the bank account and cash deposits. The AO estimated net profit @ 8% on the gross receipt of Rs. 43,71,694/- and worked out net profit of Rs.3,49,736/-. The AO further observed that cash deposits beyond the gross turnover amounting to Rs.7,94,006/- ,therefore, added the same under the head “income from other source” of the assessee. The AO further observed credit entries in the bank account in excess of the gross turnover amounting to Rs.4,33,144/- and also made addition for the same. The AO also observed interest in the Saving Bank Account of Rs.6,508/- and added the same to the total income of the assessee. In this manner, the AO assessed the income of the assessee at Rs.15,83,394/-.
3. The assessee filed appeal before Ld.CIT(A) with a delay of 122 days. Ld.CIT(A) in view of the sufficient cause condoned the delay and admitted the appeal for deciding on merit. However, due to repeated non-compliance of various notices issued, Ld.CIT(A) dismissed the appeal of the assessee by observing as under:-
Nitesh Kumar Jain vs IT O 6.2. Decision “During the appellate proceedings, it is seen that even aft riving the opportunities appellant has failed to submit any documents/proofs/evidences in support of its claim and arguments. In view of non submission of supporting evidences & above facts, I upheld the action of AO and ground no.1, 2 & 3 of appellant are hereby dismissed.”
Before us, Ld. Counsel for the assessee filed a Paper Book containing pages 1 to 12 having details of bank statement of various banks. Ld. Counsel for the assessee also submitted that entire sales cannot be taken as profit and net profit rate has to be applied. In support of the contention, Ld. Counsel for the assessee relied on the decisions of Hon’ble High Court of Madhya Pradesh in the case of CIT vs Balchand Ajit Kumar [2003] 263 ITR 610 (M.P) and decision in the case of Man Mohan Sadani vs CIT [2008] 304 ITR 52 (M.P).
We have heard Ld. Authorized Representatives of the parties on issue in dispute and perused the relevant material available on record. We find that the assessee remained non-represented before Ld.CIT(A) and Ld.CIT(A) has passed the order without taking into consideration the submissions of the assessee due to non- compliance on the part of the assessee. In our opinion, under the mandate of the provision of Act, Ld.CIT(A) was required to pass an 4 | P a g e
Nitesh Kumar Jain vs IT O order on merit even no representation on the part of the assessee was made. Before us, Ld. Counsel for the assessee has expressed willingness to appear before Ld.CIT(A) and cooperate in appellate proceedings. In view of the facts and circumstances of the case, we feel it appropriate to set aside the impugned order and restore the matter back to the file Ld.CIT(A) for deciding afresh after taking into consideration the submissions and of the assessee and case laws relied upon in support of his claim. The assessee is also directed to file all the necessary evidences and case laws in his support at the earliest before Ld.CIT(A) and cooperate in appellate proceedings for disposal of the appeal before Ld. CIT(A). Thus, Grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 22/09/2023.