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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI PRASHANT MAHARISHI & SHRI KULDIP SINGH
Per : Kuldip Singh, Judicial Member:
The appellant, Mr. Farhan Abdul Sayed (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 13.09.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2017-18 on the grounds inter-alia that :- “(1) The assessing officer had erred in treating three credit card payments of Rs.49,37,549 as income from other sources. The breakup of such credit payments is as under: 4541982337352402 24,17,689 4147521231288003 14,16,550 000000000024740573 1103310 2 Mr. Farhan Abdul Sayed
There was no time barring date and the order was passed on 18.12.2019 but it includes the details submitted by the appellant on 19.12.2019. The assessing officer overlooked the fact that during the office was sold and also he is director in company.
(2) The assessing officer has not consider what the assessee has stated in his letter that the creditcard no 00000000000002740573 does not belong to him and therefore Rs.1103310 should have not been added
(3) The detail of credit card no 4541982337352402old no ending 0254 was submitted and as per the same the total payment comes to rs 1431880 however AIR Transaction shows payment of Rs. 2417689. Further out of Rs 1431880 RS $45300 Were paid From savings account out of proceeds of sale of office Bal Cash RS 18500 out of rs savings and remaining from companys current account where the assessee is director.
(4). for credit card no 414752131288003 total payment rs 1416550 form savings account rs 407700 and cash during monetisation rs 369000 and bal cash and form current account. Majority of credit card payments were treated as drawings however the total payment was treated as IFOS WITHOUT giving sufficient opportunity. the submissions done on 18.12.2019 were not considered.
(5) Vide order under section 250 dated 13.9.2022 recd on 17.9.2022 the addition relating to card no 0000000002740573 has been deleted.
(6) For credit No 454198233735240 old ending 0254 AIR shows Rs 2417689 but actually only Rs 1431880 so difference of Rs 985809 needs to deleted. The payment details of the same is as under From savings account no 31610100011373 Rs.545300(Source of the same sale of office)
From Current Ac No 31610200000314 Rs.868080 Current account belongs to Flag Management and Consultants where in the appellant is director
Cash Rs 8500
(7) For Credit card No 414751231288003 shows Rs.1416550. The payment details of the same is as under From savings account no.31610100011373 Rs 407700 (Source of the same sale of office)
From Current Ac No 31610200000314 Rs.485950 Current account belongs to Flag Management and Consultants where in the appellant is director
Cash Rs.522900 out of income and past savings
So for both the cards together cash payment is Rs 531400 and the balance from savings account and current account of the company. The source of savings is sale of office for Rs 64,35,000 and for current account it is out business income.
(9) Addition have made under sect 69A :Unexplained money, etc. Where in any year the taxpayer is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any. maintained by him for any source of income, and the taxpayer offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, than the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the taxpayer for such year. All the payments for credit card were not done 3 Mr. Farhan Abdul Sayed in cash, around 90% payments were through bank accounts and therefore the credit card payments cannot be treated as unexplained money and tax at 60% under section 115BBE Section 69A is not applicable at all and consequential edu cess and Interest is also not chargeable. (9) The appellant craves leave to add, alter, amend or delete any of the grounds of appeal”
2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : the assessee is an individual and director in Flag Management and Consultants Pvt. Ltd., earning income from salary, income from business and profession and capital gain during the year under consideration. Assessee’s return of income filed for the year under consideration declaring total income of Rs.5,05,970/- was subjected to limited scrutiny by way of issuance of notices under section 143(2) and 142(1) of the Income Tax Act, 1961 (for short ‘the Act’), however, the assessee has not filed any detail as called for. Then show cause notice dated 30.10.2019 was issued as to why the penalty proceedings under section 272A(1)(d) of the Act should not be initiated. Then assessee’s representative submitted part details/documents. Again show cause notice was issued to the assessee to file complete details/evidences qua the payment of credit card bills of Rs.49,37,519/-. Then the assessee filed the reply. The assessee was further called upon to submit details of payment, mode of payment along with its source and copy of bank statement, but the assessee has merely submitted copy of bank statement stating that the cash of Rs.13,46,000/- was deposited in the current account from 08.11.2016 to 31.12.2016 which were out of proceeds of collection from debtor and were utilized for making payment of credit card dues. However, the assessee has not submitted any details of debtors viz. name, PAN, address, loan confirmation etc. 4 Mr. Farhan Abdul Sayed The assessee has further stated that he has never owned the credit card bearing No.000000000024740573 but has failed to produce any documentary evidence in support of its claim. Consequently, the Assessing Officer (AO) reached the conclusion that the assessee has made credit card payment in cash of Rs.49,37,549/- and source of payment remained unexplained and made addition thereof under section 69A of the Act and thereby framed the assessment at total income of Rs.54,43,520/- under section 143(3) of the Act.
3. The assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has partly allowed the same. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the assessee has come up before the Tribunal by way of filing present appeal.
None appeared on behalf of the assessee despite issuance of the notice sent through Registered Post with Acknowledgment Due (RPAD) and hence presumed to have been served notice having not received back served/unserved. So the Bench has decided to dispose of the present appeal on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. D.R. for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
At the very outset, it is brought to the notice of the Bench that the assessee did not respond to any of the notices issued by the Ld. CIT(A) during the appellate proceedings nor submitted any 5 Mr. Farhan Abdul Sayed legal or factual submissions. These facts are evident from para 6.2 of the Ld. CIT(A), wherein it is also mentioned that the assessee has alleged in his ground of appeal that the AO did not provide sufficient opportunity of being heard to the assessee. It is also specifically mentioned by the Ld. CIT(A) in para 6.2 that “from the assessment order it is seen that the AO issued several notices to which only part replies were filed. In reply to the show cause notice dated 12.12.2019 the assessee submitted a reply on 18.12.2019 when the date of compliance was 13.12.2019 and since 31.12.2019 was the time barring date for all the assessment orders the AO could not wait indefinitely for the assessee to submit a reply and the AO was within his right to pass the order on 18.12.2019”.
7. All these facts go to prove that the assessee has not been provided adequate opportunity of being heard during the assessment proceedings. The assessee has only filed part submissions. During the appellate proceedings the assessee has also failed to make any submissions. From the impugned order passed by the Ld. CIT(A) it is also not proved if the notices issued on 29.02.2021, 05.08.2022 by the Ld. CIT(A) were actually served upon the assessee or not.
8. In these circumstances, we are of the considered view that to decide the issues in controversy once for all and to impart justice adequate opportunity is required to be given to the assessee because submissions filed by the assessee on 18.12.2019 before the AO were not taken into consideration as assessment order was passed on 18.12.2019 itself being a time barring date. So in these circumstances the impugned order passed by the Ld. CIT(A) is 6 Mr. Farhan Abdul Sayed hereby set aside and file is remitted back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee.
Resultantly, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24.02.2023.