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Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD
Before: SH. SUDHANSHU SRIVASTAVA & SH. NIKHIL CHOUDHARY
O R D E R PER NIKHIL CHOUDHARY, A.M.: These two appeals have been filed against the orders of the ld. CIT(A), NFAC under section 250 of the Income Tax Act for the assessment years 2015-16 and 2018-19 vide separate orders dated 31.07.2024. As the issues involved in these two appeals are same, the same are taken up for disposal by way of common order. 2. The grounds of appeal
in are reproduced as under:- “1. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in dismissing appeal by holding that the appellant is not keen to pursue the appeal without giving an adequate and effective opportunity of being heard.
2. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in dismissing appeal in limine without giving any finding on the statement of facts as filed along with memo of appeal.
,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King
3. BECAUSE the learned Commissioner of Income Tax ()Appeals) has erred in law and on facts in sustaining addition of Rs. 5,13,10,200/- made on account of deposits in the bank account as unexplained money by invoking the provision of section 69A of the Income Tax Act, 1961.
4. BECAUSE the learned Commissioner of Income Tax (Appeals) has failed to appreciate the facts that Bank Account with Bank of Baroda don't belongs to the appellant firm. The aforesaid Bank Account belongs to Mr. Aftab Alam (PAN- AJPPA1596F) who is the proprietor of firm named as M/s Auto King.
5. BECAUSE Mr. Aftab Alam is regularly filing his return of income and he has fully and truly disclosed the aforesaid bank account in his financial statement of account filed along with return of income and audit report under section 44AB of the Income Tax Act, 1961 in Form No. 3CB and 3CD. 6. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition of Rs. 3,86,518/- made on account of - a) Contract receipts Tata AIG General Insurance Rs. 35,400/- b) Commission and Brokerage from MAGMA Fincorp Rs. 2,13,478/- c) Rent from Tata AIG General Insurance Rs. 50,000/- d) Commission and brokerage from Mahindra Rs. 87,640/- 7. BECAUSE the receipts of Rs. 3,86,518/- is fully and truly accounted for and credited to profit and loss account of M/s Auto Kind, the proprietary business entity of Mr. Aftab Alam and offered for taxation. 8. BECAUSE the PAN of the appellant firm was wrongly mapped in opening of Bank Account in the name of M/s Auto King as proprietary business entity of Mr. Aftab Alam who's PAN is AJPPA1596F. 9. BECAUSE the appellant denies for levy of interest under section 234A, 2348 and 234C of the Income Tax Act, 1961. 10. BECAUSE the order appealed against is contrary to the facts, law and principle of natural justice.
The grounds of appeal in are reproduced as under:-
,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King
BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in dismissing appeal by holding that the appellant is not keen to pursue the appeal without giving an adequate and effective opportunity of being heard.
BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in dismissing appeal in limine without giving any finding on the Statement of facts as filed along with memo of appeal.
3. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition of Rs. 2,31,29,100/- made on account of deposits in the bank account as unexplained money by invoking the provision of section 69A of the Income Tax Act, 1961. 4. BECAUSE the learned Commissioner of Income Tax (Appeals) has failed to appreciate the fact that Bank Account with Bank of Baroda don't belongs to the appellant firm. The aforesaid Bank Account belongs to Mr. Aftab Alam (PAN- AJPPA1596F) who is the proprietor of firm named as M/s Auto King. 5. BECAUSE Mr. Aftab Alam is regularly filing his return of income and he has fully and truly disclosed the aforesaid bank account in his financial statement of account filed along with return of income and audit report under section 44AB of the Income Tax Act, 1961 in Form No. 3CB and 3CD. 6. BECAUSE the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining addition of Rs. 3,37,115/- made on account of commission and brokerage received from- a) Mahindra & Mahindra Financial Service Ltd. Rs. 2,95,415/- b) Kokak Mahindra Bank Ltd. Rs. 38,700/- c) Indusind Bank Ltd. Rs. 3,000/- 7. BECAUSE the brokerage and commission Rs. 3,37,115/- is fully and truly accounted for and credited to profit and loss account of M/s Auto Kind, the proprietary business entity of Mr. Aftab Alam and offered for taxation. 8. BECAUSE the PAN of the appellant firm was wrongly mapped in the Bank Account opened in the name of M/s Auto King as proprietary business entity of Mr. Aftab Alam who's PAN is AJPPA1596F. 9. BECAUSE the appellant denies for levy of interest under section 234A, 2348 and 234C of the Income Tax Act, 1961.
,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King
BECAUSE the order appealed against is contrary to the facts, law and principle of natural justice.”
The facts of the case are that the assessee is a partnership firm and was allotted a PAN No.AAOFM6183C in the name of M/s Auto King. Since it did not file a return for the assessment year 2015-16 or the assessment year 2018-19 and the ld. AO received information of the assessee indulging in various transactions, a notice under section 148A(b) was issued to the assessee and upon the failure of the assessee to respond, an order under Clause (d) of section 148A was passed by the ld. AO, that it was a fit case for issue of notice under section 148. Accordingly, notices under section 148 were issued for both assessment years by the ld. AO. The ld. AO records the fact that he gave several opportunities to the assesse to submit a response, but no response was received, therefore show cause notice was issued in both cases, for response on 11.02.2023. Upon the failure to receive a reply, the ld. AO proceeded to make additions of Rs.5,16,96,718/- in assessment year 2015-16 and Rs.2,34,66,215/- in assessment year 2018-19 respectively. Penalty proceedings under section 271AAC(1) of the Act for the assessment year 2018-19 and section 271(1)(c) of the Act for the assessment year 2015-16 were also initiated.
Aggrieved with these additions, the assessee filed appeals before the NFAC. However, the ld. CIT(A), NFAC records the facts that despite three notices issued by him on 2.07.2024, 11.07.2024 and 22.07.2024, no compliance was made by the assessee. He further pointed out that the National Faceless Appeal Centre had enabled a communication window in November, 2023 to facilitate filing of submissions by assessees, but assessee had not filed submissions at that time also. From all the above, he concluded that the assessee was not keen to pursue the appeal and had not brought any material / argument on record in support of the grounds taken in appeal and against the order of the ld. AO. Therefore, relying upon ,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King the decision of the Hon’ble Supreme Court in the case of CIT vs. B.N. Bhattarchya (1997) 118 ITR 461 (SC) and the ITAT, Delhi Benches in the case of CIT vs. Multiplan India Private Limited 38 ITD 320 Delhi as also the decision of the ITAT, Delhi Benches in the case of Vipul Logistic and Warehousing (Pvt. Ltd.) vs. ITO , he dismissed the appeals of the assessee holding that no interference was called for in the AO’s order.
Aggrieved with the summary disposal of his appeal, the assessee has come in appeal before us. Shri. S.K. Jaiswal, C.A. (hereinafter referred to as the ‘ld. AR’) appearing on behalf of the assessee submitted that the ld. CIT(A) had failed to appreciate that the bank account with the Bank of Baroda did not belong to the assessee firm but belonged to Shri. Aftab Alam (PAN-AJPPA1596F) who was a proprietor of the firm named as M/s Auto King. It was submitted that M/s Aftab Alam was regularly filing his return of income and he had fully and truly disclosed the aforesaid bank account in his financial statements of accounts filed along with the return of income and the audit report under section 44AB of the Income Tax Act, 1961 in Form Nos.3CB and 3CD. It was submitted that the PAN of the assessee firm was wrongly mapped to the bank account opened in the name of M/s Auto King, the proprietary business entity of M/s Aftab Alam. It was further submitted that the issue had been examined by the Income Tax Department in detail in A.Y. 2017-18, wherein the fact of deposit of cash of Rs.32,70,500/- into the said bank A/c No. 35590200000018 in Bank of Baroda, Mauaima, Allahabad had been investigated in the hands of the assessee. After enquiries with the bank, the Income Tax Department had ascertained that the PAN attached to this account was AJPPA1596F i.e. the PAN number of Mr. Aftab Alam. It was submitted that the PAN No. AAOFM6183C (which was the PAN of the firm) was used for opening of the current account in the Bank of Baroda in the name of M/s Auto King, but the return of income had been filed under the proprietorship of the firm and all the details were 5 ,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King shown in the audit report and ITR of M/s Aftab Alam in the audit report and ITR of the corresponding assessment year. It was submitted that Shri. Aftab Alam was doing business in the sale purchase of Tractor, Tractor parts, Tractor Trolly, E- Rickshaw and Farming appliances. The ld. AR submitted that these issues had been examined in detail in the assessment year 2017-18 and the ld. AO had come to a conclusion that the beneficiary of this account was M/s Auto King proprietor Shri. Aftab Alam, bearing PAN No. AJPPA1596F. The ld. AR submitted that once the Income Tax Department had already come to a conclusion regarding the beneficial owner of the said bank account, there was no reason to repeatedly issue notices to the assessee firm and seek its explanation in the matter. Accordingly, it was prayed that since the findings of the Income Tax Officer in the assessment year 2017-18 had not been considered by either the ld. AO or the ld. CIT(A), their orders were bad in law and therefore deserving of being quashed.
On the other hand, Shri. A.K. Singh, Sr. DR (hereinafter referred to as the ‘ld. Sr. DR’) submitted that owing to the fact that the PAN had been mapped to the concerned bank account, the notice had been issued in the name of the assessee firm and thereafter, it was due to the repeated non-compliance of the assessee that the facts, as determined the by the ld. AO in assessment year 2017-18, were not in the knowledge of either the ld. AO or the ld. CIT(A) when they were passing their orders. It was, therefore, prayed that rather than quashing the order, the ITAT may be pleased to remand the matter back to the ld. AO to reconsider his findings in the light of the findings rendered by the ld. AO in A.Y. 2017-18. It was also prayed that the assessee may be directed to cooperate in such assessment proceedings to assist in finding the true position.
We have duly considered the facts and circumstances of the case. It is observed that a detailed enquiry took place in the assessment year 2017-18, and ,146/Alld/2024 A.Ys. 2015-16 & 2018-19 M/s Auto King