SHRI K.N. SHARMA,DEHRADUN vs. ITO, DEHRADUN

Facts of the case, in brief, are that the assessee is an individual. A search u/s 132 of the Act was carried out in the premises of the assessee on 25th February, 2008. Various notices issued by the AO were returned unserved by the Postal Authorities with the remark that ‘the house is locked since long time back.’ The , 1687/Del/2015, & 512/Del/2014 CO No.231/Del/2015 notice given to the notice server of the Department was also returned back with the remark that the above person does not reside at this address from last one year. Subsequently, the Inspector of the office was deputed to make enquiry in the matter and to serve the said notice through affixture. The notice was affixed by the Inspector on 30.11.2009 on the gate wall of the assessee in the presence of two witnesses of the Department and one local member of the area residing opposite side of the assessee’s residence, but, he refused to sign on any of the documents. Subsequently, there was also non-compliance to the notice issued u/s 143(2) of the Act. In view of the above and on the basis of the various seized documents, the AO completed the assessment u/s 144 of the Act, determining the total income of the assessee at Rs.87,75,897/- which included unexplained credit entries in the bank accounts of Rs.17,41,894/-, interest income of Rs.2,415/- and various other unexplained investment and unexplained income on the basis of various seized documents.

In appeal, the ld.CIT(A) gave part relief, but, sustained the addition of Rs.20 lakhs on account of amount received by the assessee from Shri Hazi Ekan Ali, Rs.8,16,588/- being unexplained investment by the assessee in cash and Rs.8 lakhs on account of receipt by the assessee on 04.04.2008.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. , 1687/Del/2015, & 512/Del/2014 CO No.231/Del/2015 6. The ld. counsel for the assessee submitted that the assessee was not staying at Dehradun and was staying at Delhi and, therefore, could not participate in the assessment proceedings due to non-receipt of the statutory notices. Even the same were never brought to his notice. Only after the demand was raised that he came to know of the same and filed appeal before the CIT(A). Even there also the various objections raised by the assessee regarding the nature, source and utilization of the receipts were not properly appreciated by the CIT(A). He submitted that in the interest of justice, the assessee should be given one final opportunity to substantiate his case.

The ld. DR, on the other hand, submitted that the assessee did not appear before the AO for which he made the addition. Although the assessee was able to appear before the CIT(A), however, he could not substantiate the various entries found in the seized documents for which the ld.CIT(A) gave only part relief to the assessee and, therefore, the order of the CIT(A) is fully justified. He accordingly submitted that the grounds raised by the assessee should be dismissed.

We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find, the AO, in the instant case, completed the assessment u/s 144 of the Act, determining the total income at Rs.87,75,897/-. We find, the ld.CIT(A) gave only part relief to the assessee and sustained the major additions. It is the submission of , 1687/Del/2015, & 512/Del/2014 CO No.231/Del/2015 the ld. Counsel for the assessee that the assessee was staying at Delhi and could not appear before the AO due to non-receipt of the statutory notices which the AO has also mentioned in the assessment order and the notice was served through affixture. It is also his submission that the ld.CIT(A) has not appreciated the facts of the case properly and given an opportunity, the assessee is in a position to substantiate his case either before the AO or before the CIT(A). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate his case. The assessee is also hereby directed to appear before the AO and substantiate his case without seeking any adjournment under any pretext and cooperate with the AO for completion of the assessment proceedings at the earliest failing which the AO is at liberty to pass appropriate order as per law. The grounds raised by the assessee are accordingly allowed for statistical purposes.

After hearing both the sides, we find the appeal filed by the Revenue has been dismissed on account of low tax effect. Therefore, the CO filed by the assessee becomes infructuous. Accordingly, the same is dismissed.