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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 13.02.2023 passed by Ld. Commissioner of Income Tax(Appeals)- National Faceless Appeal Centre, Delhi [in short the ‘Ld.CIT(A)’] for assessment year 2013-14, raising following grounds:
1. “Because the learned CITA has erred in law and on facts in sustaining the addition of Rs 4633994/-on account of cash deposit in the bank account treating as Unexplained Cash Deposit in the Bank Account by invoking a provision of Section 68 of the IT Act, 1961.
2. Because the Learned CITA has failed to associate the fact that the Appellant is engaged in the business of providing E Pay services of MP Online Limited & earning service charges thereon and whole of the cash deposited in the bank account stands fully explained out of Cash collected from Customers. 03. Because the Learned CIT A has failed to appreciate the fact that there are no any other debit entries in the bank account except e pay to MP Online Limited. Thus the Appellant not the beneficiary of Cash Collected from the Customers and deposited in the Bank Account towards e payment to MP Online Limited. 04. Because the Learned CIT A has erred in law and on facts in sustaining addition of Rs 130884/- on account of Service Charges received from M P Online Limited duly verifiable from Form 26AS, as Unexplained Credit from Bank Account. 05. Because the Learned CIT A has erred in law and on facts in dismissing the Appeal limine without providing adequate and effective opportunity of being heard. 06. Because the Order Appealed against is contrary to law, fact and Principle of Natural Justice.” 2. Despite notifying, neither anyone attended on behalf of the assessee nor any request for adjournment was filed and therefore, the appeal is decided ex-parte qua the assessee after hearing arguments of the Ld. Senior Departmental Representative (Sr.DR) for the Revenue.
3. On further appeal, the Ld.CIT(A) also issued various notices but those remained non-compiled and the appeal was dismissed ex- parte to the assessee by observing as under:-
4.1. “Appeal has been filed against order u/s 147 r.w.s 144 as per which the AO has made additions due to unexplained cash deposit in the bank of Rs.46,33,994/- and unverified purchase of Rs.1,30,884/-. 4.2. Despite notices dated 13.12.2022, 19.01.2023 and 01.02.2023, the assessee has chosen not to furnish any reply or response. It would appear that he has nothing to say in his own defence.”
We have heard the contention of Ld. Sr.DR on behalf of the Revenue, issue in dispute and perused the material available on record. In the case, the assessee is one of the agents of Madhya Pradesh Online Services Organization of Madhya Pradesh State Government and was engaged in the business of providing online services including the deposit of electricity bills, water bills etc. The assessee used to deposit said sum received from customers in his Saving Bank Account and further transferred to relevant agency and was earning percentage of commission from the Madhya Pradesh Online Organisation. The said receipt of the commission is already appearing in Form No.26AS. In view of the information of cash deposit of Rs. 46,33,994/- in Saving Bank Account of the assessee and no regular return of income filed by the assessee for the year under consideration, the Assessing Officer (“AO”) reopened the assessment invoking section 147 of the Income Tax Act, 1961 (“the Act”) and issued notice u/s 148 of the Act asking the assessee to file return of income. The assessee did not comply to the notice u/s 148 of the Act. Further, the AO issued notice u/s 142(1) of Act for filing return of income for the year under consideration. Again, there was non-compliance of the notice issued by the AO u/s 142(1) of the Act and the subsequent reminders. The AO thereafter, issued a showcase notice on 26.11.2018 which also remained non-complied and therefore, the AO made addition of the entire deposit of Rs.46,33,994/-. The AO also added the commission income of Rs.1,30,884/- which was appearing from Form No.26AS. In this manner, the AO passed assessment order u/s 144 of the Act on 11.12.2018.
Before us, the assessee has remained non-compiled. But from the facts of the present case, we find that the assessee is residing in a very small and remote village and probably not being aware of the service of the notices through Income Tax portal (ITBP), he could not have responded before the lower authorities. We find that the lower authorities are duly aware of the facts that the assessee is earning commission from providing online services for the State Government i.e. deposit of electricity bills, water bills etc. and the cash deposits were received from the customers. This fact is clear from the records of the Income-Tax Department itself. The AO has made addition for the entire amount of the cash deposits which is not appreciated. The AO could have made enquiries from the M.P. Online Services Ltd. i.e. the organisation who has provided information of commission income as appearing in Form No.26AS, and reconciled the deposits in Saving Bank Account of the assessee with various payments made on behalf of the customers. In the facts and circumstances of the present case and in the interest of substantial justice, we feel it appropriate to restore the matter back to file of AO for deciding afresh. In view of the assessee being residing in a very small and remote village, we direct the AO to issue notice in physical mode alongwith other mode of the service of notice and if required, provide assistance to the assessee for determining his true income by way of deputing Inspector or any other authority, for verifying and reconciling cash deposits with customer’s money collected by the assessee for further payment and dispose the assessment after taking into consideration the explanation of the assessee in respect of each cash deposit in his Saving Bank Account. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.