YAKUB HASANBHAI MALEK,,MEHSANA vs. INCOME TAX OFFICER, WARD-4,, GANDHINAGAR

The appeal filed by the assessee for A.Y. 2011-12, arise from order of the CIT(Appeals), Gandhinagar dated 21.09.2015, in proceedings under section 144 of the Income Tax Act, 1961; in short “the Act”.

The instant appeal is against the order of CIT(A) in confirming the addition of unaccounted cash deposited to bank amounting to Rs. 3,14,96,000/- by the AO.

The fact in brief if that the assessee has filed return of income declaring income of Rs. 1,48,174/- on 06.06.2011. The case was subject to scrutiny assessment and during the course of assessment proceedings the AO has noticed that as per the information received through AIR data the assessee has deposited cash of Rs. 31,49,600/- in his bank account. The assessee has deposited the aforesaid cash in his two bank accounts (Rs. 29,49,600/- was deposited in Bank of India Santaj Branch and the remaining cash of Rs. 2,00,000/- was deposited in Bank of India Jamalpura Branch, Ahmedabad). The AO has issued a number of notices and letters to the assessee to explain the sources of the said cash deposited in the bank account. However, the assessee has not made any compliance during the course of assessment proceedings. Consequently, the AO has added the impugned amount of cash deposited of Rs. 31,49,600/- to the total income of the assessee.

Aggrieved assessee has filed appeal before the Ld. CIT(A). The assessee has also not made any compliance during the course of appellate proceedings before the Ld. CIT(A). Therefore, the Ld. CIT(A) has sustained the addition made by the AO.

During the course of appellate proceedings before us the Ld. Counsel has contended that there was dispute between the assessee and his wife and his wife has left him and started living in her father’s home. Since the family was broken the assessee was under heavy mental stress tension and agony and was not in a working condition. The Ld. Counsel has further submitted that life of the assessee has become extremely stressful and painful due to which he could not concentrate on scrutiny assessment and also could not make compliance at the time of appellate proceeding before the Ld. CIT(A). The Ld. Counsel has also placed additional evidences in the Paper Book comprising copies of bank pass book, banakhat dated 15.04.2008, bank pass book of the land purchaser etc. The Ld. Counsel has also submitted affidavit of the assessee pleading that he could not concentrate on the scrutiny assessment proceeding because of family dispute with his wife. It was pleaded in the affidavit that necessary documents and other evidences could not be submitted during assessment proceeding because of family problem as stated above. The assessee has also submitted affidavit from Mahirhusen Mujjafarhusen Ghanchi and Ghanchi Ramijhusen Asalambhai regarding payment received on purchase of agriculture land. He has also submitted affidavit of Maulavi Shekh Abusale who had tried to make compromise between the assessee and his wife. The Ld. Counsel has further submitted that the case of the assessee was not decided on merit.

On the other hand, the Ld. DR has supported the order of lower authority and submitted that in spite of giving a number of opportunities the assessee has failed to make any compliance before the AO and the Ld. CIT(A) during the course of assessment proceedings and appellate proceedings.

We have heard both the sides and perused the material on record carefully. During the course of assessment proceedings the assessee has failed to make any compliance, therefore, the assessment order was passed ex-parte under Sec. 144 of the Act treating the total cash deposit made in his bank account as unexplained and added to the total income. During the course of appellate proceeding before CIT(A) the assessee has also failed to make any compliance, therefore, the Ld. CIT(A) has sustained the addition made by the AO. Because of non-compliance from the side of the assessee the Ld. CIT(A) could not adjudicate the case of the assessee on merit. As reported above in this order the assessee has pleaded that he could not make compliance before lower authority on the reason of prevailing strained relation with his wife, however, we observe that the assessee has neither made a single compliance before the lower authority nor submitted any written submission at the stage of assessment proceedings and appellate proceedings before the AO and Ld. CIT(A). Consequently, the impugned issue in the appeal could not be adjudicated at any stage at the time of assessment proceedings or at the time of appellate proceedings. In the light of the facts and circumstances as adduced above which were referred by the assessee as impediment in making compliance before the lower authorities, we consider appropriate to restore the Ld. CIT(A) to adjudicate the case on merit according to provision of Sec. 250(6) of the Act after considering the documents/material to be furnished by the assessee in the set-aside proceedings.

In the result, the appeal of the assessee is allowed for statistical purpose.