SHRI MAHESH YADAV, A-225, JAI NAGAR, SIKAR ROAD, JAIPUR,JAIPUR vs. ITO WARD-4(3), JAIPUR, WARD-4(3), JAIPUR

3. The ld. CIT(A) has erred in law and on facts in confirming the addition of Rs. 46,27,571/- made by the AO. On account of unexplained cash deposited in the saving bank account, ignoring 2 ITA 590/JP/2019_ Mahesh Yadav Vs ITO the fact that the same was on account of business receipts of transportation.

Brief facts of the case are that on the basis of AIR information, the assessee deposited cash of Rs. 46,27,571/- in his saving bank account maintained with ICICI bank Ltd. Further as per 26AS details, the assessee received Rs. 6,57,945/- from various companies on which TDS has also been deducted. As per details available, the assessee had not filed the return of income for the year under consideration, on the basis of which, the A.O. issued notice U/s 148 of the Income Tax Act, 1961 (in short, the Act) on 13/03/2015. The A.O. passed assessment order on 17/03/2016 assessing total income of assessee at Rs. 48,67,430/-.

Ground No. 1 and 2 of the appeal raised by the assessee relates to challenging the order of the ld. CIT(A) in not admitting the additional evidence during the course of appellate proceedings under Rule 46A of the Income Tax Rules. In this regard, the ld AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied upon the written submissions filed before the Bench and the same is reproduced below: “1.1 The appellant very humbly submits that during the assessment proceedings, the assessee had certain dispute with his AR Shri 4 ITA 590/JP/2019_ Mahesh Yadav Vs ITO Vijay Soni, regarding charging of fee. The AR had all the details called for by the AO with him, but he did not present the same before the AO. He also refused to give NOC so as to enable the appellant to appoint another AR to represent his case. When the AR did not comply to the notices, finally the appellant had to take charge. He submitted whatever facts were within his knowledge. The Ld.AO finding them insufficient, made the additions.

On the other hand, the ld DR has relied on the orders of the authorities below.

We have heard the rival contentions and carefully perused the material available on record. As per facts of the present case, we noticed that the additions were made by the A.O. in the case of assessee by treating the bank deposits of Rs. 46,27,571/- as unexplained deposit U/s 68 of the Act as the assessee could not furnish the supporting documents and therefore, in absence of those supporting documents, added these amounts in the total income of the assessee. During the pendency of the appeal before the ld. CIT(A), the assessee filed an application under Rule 7 ITA 590/JP/2019_ Mahesh Yadav Vs ITO 46A of the Income Tax Rules for admitting the documents in the shape of ICICI bank account summary for the period, bank of Baroda account summary for the period, account confirmation of party M/s Faridabad Assam Roadways, Faridabad with PAN card copy, account confirmation of party M/s Bhamra Road Lines, Delhi with PAN card copy, account confirmation of party M/s New Saini Coargo Carier, Faridabad with PAN card copy, account confirmation of party M/s Allied Transport Co. P. Ltd. Delhi with PAN card copy, account confirmation of party M/s Siddarth Transport Company, Dehradun with PAN card copy and account confirmation of party M/s National Road carrier, Ludhiana with PAN card copy. However, the ld. CIT(A) forwarded the written submissions alongwith the documents to the A.O. and called for the remand report but the A.O. having been issued remainders, had not submitted remand report. Therefore, the ld. CIT(A) took the view that the appeal of the assessee could not been kept pending indefinitely for want of remand report, therefore, the ld. CIT(A) decided to adjudicate the appeal in absence of remand report. In our view, while doing so, the non- submission of remand report by the A.O. was used to the disadvantage of the assessee by the ld. CIT(A) as the A.O. failed to submit the desires report. Therefore, in that eventuality, the inference should have been drawn in favour of the assessee as the A.O. had no valid basis or reasons 8 ITA 590/JP/2019_ Mahesh Yadav Vs ITO to rebut the additional evidences produced by the assessee but by doing so the ld. CIT(A) had committed an error and simply dismissed the appeal of the assessee by holding that the assessee has failed to explain the nature and source of cash deposit in the bank account.

The ld AR, in order to support his contention, has specifically pleaded before us that the assessee had certain disputes with his authorized representative regarding charging of fee and although the assesseee had all the details called for by the A.O. with him but he could not produce the same before the A.O. as the said details were handed over to the assessee by his authorized representative. Even the said authorized representative had also refused to give NOC to enable the assessee to appoint another authorized representative to represent his case. Although, before the ld. CIT(A), all those documents as mentioned above had been placed on record by the assessee and the ld. CIT(A) had accepted without any objection and in furtherance of his action of having accepted the same, he forwarded it to the A.O. for seeking his remand report. This act of the ld. CIT(A) shown his intention that he had accepted the additional evidences and had no reservations about it but in absence of remand report submitted by the A.O., the ld. CIT(A) has taken contrary view and dismissed the appeal of the assessee by not admitting 9 ITA 590/JP/2019_ Mahesh Yadav Vs ITO the documents submitted by the assessee which in our view, is not correct. Even the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs Mst. Katiji 167 ITR 471 (SC) had categorically held that “technical considerations are pitted against the cause of substantial justice it is the cause of substantial justice that must prevail.” Therefore, in view of the above proposition as laid down by the Hon’ble Supreme Court and also keeping in view the principles laid down in the decisions in the cases of CIT v. Virgin Securities and Credits P. Ltd (2011) 332 ITR 396 (Del), Chandrakant Chanu Bhai Patel 202 Taxman 262(Del), Avan Gidwani Vs ACTT Mumbai) and Abhay Kumar Shroff V/s. ITO 63 ITD 144(Pat) (ITAT Patna). We allow both these grounds of appeal raised by the assessee and admit the documents placed on record by the assessee as additional evidences. In view of the above facts and circumstances, we have admitted the additional evidences, therefore, the matter is remanded back to the A.O. for the deciding the issue afresh.

In the result, this appeal of the assessee is allowed for statistical purposes only.