DINESH VISANJI RUPAREL,SANGLI vs. INCOME TAX OFFICER WARD 1, SANGLI

Although a number of grounds have been raised by the assessee, however, these are all relate to the order of the Ld.CIT(A)/NFAC in confirming the addition of Rs. 79,86,319/- made by the Ld. Assessing Officer (“AO”) on account of cash deposited in bank account maintained with Shri Renuka Mata Multistate Co-operative Credit Society Ltd. by the assessee during the relevant AY under consideration.

Briefly stated, the facts of the case are that the assessee is an individual. For AY 2018-19, the assessee filed his return of income on 28- 08-2018, declaring total income of Rs. 2,87,860/-. Based on the information available with the Department, the Ld.AO found that the assessee had deposited cash amounting to Rs. 79,86,319/- into the bank account maintained with Shri Renuka Mata Multistate Co-operative Credit Society Ltd. during the FY. 2017-18 relevant to AY. 2018-19. Since the assessee had not disclosed the said cash amount of Rs. 79,86,319/- in his return of income, the case of the assessee was reopened u/s. 147 of the Act. Notice u/s. 148 of the Act was issued on 27-04-2022, in response to which the assessee filed return of income on 29-06-2022, declaring income of Rs. 9,26,770/- and turnover of Rs. 99,07,567/-. Thereafter, various notices u/s. 142(1) of the Act were issued to the assessee, requesting the assessee to explain the nature and source of cash deposits in the aforesaid bank account of the assessee along with documentary evidence. However, the assessee failed to respond to these notices. The assessee submitted part reply on 12-03-2024 in response to the final show cause notice issued on 21-02-2024, wherein the assessee stated as under:

After considering the above reply of the assessee, the Ld.AO observed that the assessee has not filed any corroborative evidence to prove that he has actually carried out trading business of food grains and other agro commodities as alleged by him. Further, the assessee failed to 4 furnish the cash flow statement. The assessee has also not submitted any justification or evidences regarding the increase in turnover shown in the return filed in response to the notice u/s. 148 of the Act. The Ld.AO, therefore, proceeded to complete the assessment thereby making an addition of Rs. 79,86,319/- on account of cash deposited in bank account of the assessee i.e. Shri Renuka Mata Multistate Co-operative Credit Society Ltd., treating the said cash deposits as ‘unexplained money’ u/s. 69A of the Act vide his order passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dt. 20-03-2024. 6. The assessee filed appeal before the Ld.CIT(A)/NFAC, challenging the aforesaid addition. Despite service of notices of hearing issued during the appellate proceedings, there was non-compliance which resulted in ex-parte decision by the Ld.CIT(A)/NFAC, dismissing the appeal of the assessee for non-prosecution and endorsing the findings of the Ld.AO.

Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

The Ld.AR submitted that non-compliance to the notice(s) issued by the Ld.CIT(A)/NFAC was not intentional. The assessee is keen to ensure complete and total compliance as so required before the Ld.CIT(A)/NFAC and the present situation is simply a fall-out of communication gap. The Ld.AR submitted that the assessee has a strong case on merits and, therefore, humbly prayed that in the interest of justice, the assessee may be granted with one more opportunity to substantiate his claim before the Ld.CIT(A)/NFAC by filing the requisite explanation/details/documents.

The Ld.DR relied on the order of the Ld.CIT(A)/NFAC and submitted that since the assessee failed to make any submissions in spite of several opportunities granted, the Ld.CIT(A)/NFAC was completely justified in dismissing the appeal of the assessee.

We have heard the Ld. representatives of the parties and perused the material available on record. Admittedly, there was non-compliance to the notice(s) issued by the Ld.CIT(A)/NFAC which constrained him to pass ex- parte impugned order. We observe that the Ld.CIT(A)/NFAC, in the instant case, has passed the impugned order, in concurrence with the order of the Ld.AO without himself going into the merits of the case due to lack of any evidence, material or explanation filed by the assessee in support of his claim. The appellate order reveals that the Ld.CIT(A)/NFAC has applied the decision in the case of B.N. Bhattacharjee and Another [118 ITR 461] and various other decisions and dismissed the case of the assessee for non- prosecution. No doubt, the Ld.CIT(A)/NFAC may decide the appeal where the assessee does not prosecute his appeal in spite of several opportunities, nonetheless, he has to adhere to legislative mandate enshrined in sub-section (6) of section 250 of the Act, which requires him to state the points for determination, the decision thereon and the reasons for the decision. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.

On the facts and in the circumstances of the case enumerated above, we are of the opinion that in the interest of justice, the matter deserves to be sent back to the file of the Ld.CIT(A)/NFAC for adjudicating the assessee’s appeal before him afresh on merits as per fact and law, after allowing reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

The concerned Pr.CIT, Pune

DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////