HEM CHANDRA KALAL,UDAIPUR vs. ITO WARD-2(1), UDAIPUR

At the outset, the Ld. Counsel for the assessee submitted that the appellant did not file return of income for the assessment year under consideration i.e. 2019-20 under the bona fide belief that his income was below the taxable limit. Subsequently, based on the information relating to the

The Ld. AR submitted that the assessee belongs to rural, is not highly educated and was not regularly accessing the e-filing portal or registered e- mail account. The entire assessment was completed without any meaningful participation of the assessee. The Ld. AR stated that even in the faceless proceedings, effective opportunity and meaningful compliance with principles of natural justice is mandatory. He refers to the judgment of Hon’ble Supreme Court in the case of State of Orissa Vs. Dr. (Miss) Binapani Dei & Others where it was held that any order having civil consequences passed without proper opportunity is invalid in law. He further took support from the Apex Court judgment in the case of Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) where it is held that the assessment is framed without proper opportunity to the assessee, the matter deserves to be restored back for fresh adjudication.

On the other hand, the Ld. DR has no objection to the request of the assessee.

We find that the authorities below proceeded to pass orders ex-parte qua the assessee at the time of passing the assessment order by the AO and the impugned order by Ld. CIT(A) where assessee could not place supporting documentary evidences to explain the bank entries. In view of that matter, we are of the considered view, that matter deserves to be restored to the file of the Assessing Officer to pass assessment order after granting adequate opportunity of hearing to the appellant assessee. We further mentioned that the addition of the entire bank credits amounting to Rs. 42,69,005/- u/s 69A is arbitrary, excessive and contrary to settled legal principles of law where the appellant specifically contended that bank deposits represents transportation business receipts and loan transactions.

In the case of CIT Vs. President Industries (2002) 258 ITR 654 (Guj), it was held that entire sale proceeds cannot represent income and only profit embedded therein can be taxed.

In view of the principles of natural justice, we consider it deem fit to restore the matter back to the file of the AO for fresh adjudication of the matter after granting adequate and effective opportunity of hearing to the appellant assessee and after considering the written submissions filed by the assessee in the proceedings before the AO. Assessee shall file the requisite information during the fresh assessment proceedings before the AO, in compliance to the notices issued to the assessee.

Accordingly, the matter is remanded back to the file of the AO to pass de novo assessment order in accordance with law.

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