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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI ABY T. VARKERY, HON’BLE & SHRI MANJUNATHA. G, HON’BLE
आदेश /O R D E R
PER G. MANJUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), (NFAC), National Faceless Appeal Centre Delhi, dated 26.04.2022 and pertains to assessment year 2017-18.
:-2-: ITA. No:534/Chny/2022
The assessee has raised the following grounds of appeal: “1. It is claimed that the Appellate Order passed by the learned National Faceless Appeal Centre (NFAC), Delhi in their Appellate Order dated 26 April 2022 confirming the addition of Rs. 39, 77,451 /- as unexplained cash credit under section 68 of the IT Act is not justified and is not in accordance with the provisions of law. The observation and conclusion of the first Appellate Authority i.e. NFAC, Delhi, is opposed to the facts and provisions relevant to the issue.
2. The learned National Faceless Appeal Centre (NFAC) has erred in rejecting the various submissions based on facts of the case referred in the Appeal grounds.
3. The learned National Faceless Appeal Centre (NFAC) has erred in not considering the submission of cash book and sales tax return copies to evidence cash sales made by the appellant
4. The learned National Faceless Appeal Centre (NFAC) has erred in not considering the address of the jewelry buyers which were not verified at their end and putting the ownness on the appellant by bringing in section 68 without considering the genuiness of sales made by the appellant.
5. The learned National Faceless Appeal Centre (NFAC) ought to have considered various case laws including that of Supreme Court in the case of CIT Vs Orissa Corporation 1986 ITR 1849 and in the case of DCIT Vs Rohini Builders 256 ITR 306 Guj directing the assessing officer to verify if required from their end when the names and addresses are provided by the appellant in the case of cash credits. It is the claim of the appellant is that they have received cash in reciprocal to sale of jewellary for which names addresses and the sales tax returns have been filed along with the book entries to evidence cash sales.
6. For these or other grounds that may be raised at the time of hearing of the appeal, it is requested that the Honorable Income- tax Appellate Tribunal may be pleased to cancel the adverse Appellate order of the National Faceless Appeal Centre (NFAC), Delhi confirming the addition of Rs. 39,77,451/- made by the Assessing Officer - CPC, Bangalore.”
:-3-: ITA. No:534/Chny/2022
The brief facts of the case are that, the assessee is a partnership firm engaged in the business of jewellery and bullion trading in the name and style of M/s. Jothirling Jewellers. The assessee has filed its return of income for the assessment year 2017-18 on 24.12.2017, declaring total income of Rs. 1,58,170/- . The case was selected for scrutiny and during the course of assessment proceedings, it was noticed that the assessee had deposited cash of Rs. 50 lakhs in demonetized currencies in its bank account maintained with Axis Bank during the period from 09.11.2016 to 30.12.2016. The AO called upon the assessee to explain source, for which the assessee stated that cash deposits found in bank account is out of receipts against sales. The AO, however was not satisfied with the explanation furnished by the assessee and according to the AO, the assessee could not explain source for cash deposits on 10.11.2016, 12.11.2016 & 15.11.2016, even though it claimed that cash receipts is out of sales made during the relevant period. Therefore, made additions towards cash deposits of Rs. 39,77,451/- u/s. 68 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).
:-4-: ITA. No:534/Chny/2022
The assessee carried the matter in appeal before the first appellant authority, but neither appeared nor filed any details which is evident from the fact that although CIT(A), NFAC issued various notices, but the assessee could not represent its case and justify cash deposits. Therefore, the ld. CIT(A) passed exparte order and confirmed additions made by the AO towards cash deposits u/s. 68 of the Act.
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Admittedly, the assessee did not appeared before the CIT(A), NFAC even though the ld. CIT(A) gave six opportunities of hearing on various dates, which is evident from Para 4 of ld. CIT(A) order. Further, the ld. CIT(A) has disposed off appeal filed by the assessee exparte and decided the issue on merits on the basis of material available on record. It is a well settled principle of law by the decisions of various courts including Hon’ble Supreme Court that a reasonable opportunity of hearing should be given to the parties before deciding the issue involved in appeal. Since, the Ld. CIT(A) disposed off appeal filed by the :-5-: ITA. No:534/Chny/2022 assessee exparte without hearing from the assessee on cash deposits made during demonetization period, we are of the considered view that one more opportunity of hearing should be given to the assessee to justify its case. Thus, we set aside the order passed by the ld. CIT(A) and restore the matter to the file of the Ld. CIT(A) for fresh consideration. Needless to say, the assessee shall appear before the CIT(A) and file necessary details without seeking any adjournment.
In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the court on 5th April, 2023 at Chennai.