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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Kul Bharat & Shri Amarjit Singh
आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
These two appeals are filed by the different assessees against the decision of ld. CIT(A)-7, Ahmedabad. Since the grounds involved in both these appeals are pertained to the similar issues on identical facts, therefore, for the sake of convenience, both these appeals filed by the assessees are adjudicated together by taking the case of Shri Raj. R. Ahir vide as lead case and its findings will be applicable to the other case of the assessee, Shri Bhavna Ramesh Marand vide ITA No. 2877/Ahd/2017.
The assessee has raised following grounds of appeal:- “The Appellant is an individual and has filed the return of income for A.Y. 2014-15 on 31/07/2014 declaring total income of Rs. 17,85,150. The case was selected for scrutiny through cash and in response to notice u/s 142(1) of the Act the appellant had filed all the relevant details before the A.O. stating that form no. 16 could not be filed as it was not furnished by the employer on account of dispute with him. However, the appellant collected Form no. 16 from the office staff of the employer after 3 months and submitted to the A.O.. The A.O. procured Form No. 16 directly from the employer at the end of the December, 2016 and found the difference as compared to the Form No. 16 filed by the appellant. The A.O. then issued show cause notice dated 21/12/2016 requiring the appellant to explain the difference amount of Rs. 6,14,907 being exempt income claimed by the appellant. The appellant explained the reason vide reply dated 23/12/2016 but without affording any opportunity to cross examine the employer to the appellant and passed the assessment order. During the course of the appellant proceedings Ld. CIT(A)-7, Ahmedabad without properly appreciating the submission made by the appellant confirmed the addition of Rs. 6,14,907/- by passing non-speaking order. As regard addition of Rs. 3,49,000/- toward cash deposit in the bank, it was explained at the time of the appellate proceedings that cash was deposited in to the bank out of the various withdrawal from the bank and the copy of the cash book was also submitted to the CIT(A)-7, Ahmedabad proving that the appellant was having sufficient cash balance on hand. Without properly appreciating the submission of the appellant, the Ld. CIT(A)-7, Ahmedabad has confirmed the addition of Rs. 3,49,000/-. The appellant is therefore before your honor for justice.”
The fact in brief is that assessee has filed return of income for assessment year 2014-15 on 31st July, 2014 declaring total income at Rs. 17,85,150/-. The case was subject to scrutiny and notice u/s. 143(2) of the act was issued on 3rd Sep, 2015. The assessment u/s. 143(3) was finalized on 29th Sep, 2016 and total income was assessed at Rs. 28,74,057/-. The following additions made by the assessing officer are contested by the assessee in the present appeal filed:- 1. Cash deposited in HDFC Bank treated as unexplained money. Rs. 3,49,000/- 2. Difference in income shown in 26AS and return income. Rs. 6,14,907/- The first ground of appeal
is filed against the addition of Rs. 664907/- being difference between returned income and income as per form 26AS. The relevant fact pertained to this issue in ground of appeal is that during the course of assessment, the assessing officer has noticed that there was difference of income shown by the assessee in return of income to the amount of Rs. 6,15,007/- as compared to the income reflected in the form no. 26AS. The assessing officer has noticed that as per form no. 26AS the income from salary was reflected at Rs. 39,30,157/- whereas in the return of income the total salary income was shown at Rs. 33,15,150/-. On query, the assessee has explained that there was dispute with the employer and he had not provided salary certificate or form mo. 16, therefore, he has obtained the form no. 16 from the staff of the employer as the employer has denied to provide copy of form no.
16. It was further submitted that as he has left the company and the employer in order to harass him has deducted more TDS without any reason. However, the assessing officer has not accepted the submission of the assessee stating that as per copy of form no. 16 directly received by the assessing officer u/s. 133(6) of the act from the employer of the assessee namely Sparsh Technology the correct net salary was Rs. 39,30,157/- as against salary in the return of income at Rs. 33,15,150/- shown by the assessee. Therefore, a difference of Rs. 6,15,007/- has been considered as concealed income and added to the total income of the assessee.
4. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts as cited by the assessing officer.
During the course of appellate proceedings before us, the ld. counsel has submitted paper book comprising detail and information furnished before the assessing officer and ld. CIT(A) during the course of assessment proceedings and appellate proceedings. At the outset, the ld. counsel has submitted that identical issue on similar fact in respect of salary income received from the same employer M/s. Sparsh Technology has been adjudicated by the Co-ordinate Bench of the ITAT in the case of Ramesh A. Marand vs. ACIT vide dated 19-9-2019. On other hand, ld. departmental representative has supported the order of ld. CIT(A).
We have heard both the sides and perused the material on record and the finding of the Co-ordinate Bench on identical issue and fact in the judicial pronouncement as cited above by the ld. counsel. The relevant part of the decision of the Co-ordinate Bench in the case of Shri Ramesh A. Marand as cited above is reproduced as under:- “8. We have heard the rival submissions and perused the relevant material on record. We find that the assessee has not submitted Form No. 16, as according to him, the employer has not provided him due to dispute by which the assessee has resigned from service. However, later on, the assessee has procured Form No. 16, through hose staff of his employer. In meanwhile, the AO obtained Form No. 16 from employer. Thus, there was difference between two Form No. 16 submitted before the AO. However, the AO believed the Form No. 16 submitted by the employer of the assessee and disbelieved the Form No.16 submitted by the assessee and treated it as false. However, before treating the same the AO should have verified the correct facts from the employer by calling him and producing records. The perusal of letter received on 23.12.2016 by the AO from Sparsh Technologies (PB-21) shows that they have not furnished individual cheque/ transfer details of the employee on the ground that that same is not traceable in the bank statement. Therefore, the gross salary paid by them and claimed to be at Rs. 87,77,543 is not ascertainable. However, this could be ascertained from individual ledger account of salary or from the payroll registers maintained by the employee. Further, the 26as part And B are not verified by the AO as the assessee has only submitted Form No. 16 with part B. The mismatch between bank account of the assessee and salary credited by the employer needs verification to arrive at correct amount and reason for claiming deduction / exemption under chapter VIA. Thus, we find that the Ld.AO has not allowed proper opportunity of being heard nor allowed opportunity of cross examination of the employer to the assessee before accepting his supply. We find that there was dispute between employee and employer therefore, it was necessary for the AO to examine and allow cross-examination. The principle of audi alteram partem is the basic concept of natural justice. The expression "audi alteram partem" implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross examination, right to legal representation, disclosure of evidence to party, report of enquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India, wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of norm of rule of audi alteram partem. We find that in this instant case, the assessee was not given proper hearing. Therefore, we are of the view that the assessee must be given one more opportunity of hearing and to represent his case. Therefore, we restore this appeal to the file of the AO for reconsideration all grounds of appeal
after allowing proper opportunity of being heard in accordance with law and allowing cross examination of the employer of the assessee to the assessee. The AO may issue summons under section 131 of the Act to the employer and ask to produce salary register and payments details and copy of bank statement to verify the payment made to the assessee. Nevertheless, to mention that the assessee will cooperate in the appeal proceedings and his failure will entail confirmation of the impugned addition made by the AO. The assessee will file necessary evidences on which he wants to rely upon.
9. In the result, the appeal is allowed for statistical purposes.” Considering the facts and circumstances of the case, it is clear that assessing officer has not verified the correct facts from the record maintained by the employer and the assessing officer has also not provided any opportunity to the assessee to confront the assessee with the record maintained by the employer. Therefore, in the light of the decision of the Co-ordinate Bench as cited above, we restore this issue to the file of assessing officer for deciding afresh as directed by the Co-ordinate Bench as cited in this order. Therefore, this ground of appeal of the assessee is allowed for statistical purposes. Similarly ground of appeal in the case of Shri Bhavna Ramesh Marand is also allowed for statistical purposes.
The other ground of appeal of the assessee is filed against the addition of Rs. 3,49,000/- towards cash deposit found in the bank account of the assessee.
During the course of assessment, the assessing officer noticed that there was cash deposit of Rs. 3,49,000/- in the bank account of the assessee maintained with the HDFC bank. On query, the assessee has submitted copy of cash book and claimed that the amount was deposited to the bank account as explained in the cash book. The assessee has not accepted the submission of the assessee and added the amount of cash to the amount of Rs. 3,49,000/- treating as unexplained.
The ld. CIT(A) has also sustained the disallowance reiterating the facts reported by the assessing officer in his order.
We have heard rival contentions and perused the material on record. The assessing officer added the amount of Rs. 3,49,000/- to the total income of the assessee stating that assessee has not explained the source of cash deposited into his bank account. On perusal of the material on record, it is observed that assessee explained that there was opening balance of cash of Rs. 17,42,500/- as on 01-04-2013 as per the cash book and out of this opening balance, the assessee has deposited the amount of Rs. 3,49,000/- in his bank account. However, it is noticed that neither the assessing officer nor the ld. CIT(A) has disproved the fact that assessee has had deposited the impugned cash into his bank account out of the opening cash balance available in his cash book for the year under consideration. Therefore, we consider it is appropriate to restore this issue also to the file of assessing officer for verification of the claim of the assessee from the cash book and other relevant material after providing adequate opportunity to the assessee. Therefore, this ground of appeal of the assessee is also allowed for statistical purposes. Similarly ground of appeal in the case of Shri Bhavna Ramesh Marand is also allowed for statistical purposes