M/S VISHNU ESTATES,BANGALORE vs. INCOME TAX OFFICER, WARD-1(2)(1), BANGALORE

The brief facts of the case are that the assessee is a firm and not filed their return of income. The AO based on the information that the assessee had withdrawn cash from their current account had initiated proceedings u/s. 147 of the Act. Notice u/s. 148 was issued and the assessee had not responded to the said notice. Thereafter, notices u/s. 142(1) were issued but the assessee had not responded to the said notices also. Show cause notices u/s. 144 were issued twice proposing to treat the said withdrawals as unexplained investment u/s. 69 of the Act. The assessee had not responded to the said two notices and therefore the AO had made the assessment u/s. 144 of the Act.

As against the said order, the present appeal has been filed by the assessee with a delay of 135 days. The assessee also filed an application to condone the said delay. In the said application, the assessee had stated that the email address given at the time of registration was not in use and therefore not responded to any of the notices and therefore the assessee has no knowledge about the appellate order and therefore there is a delay of 135 days in filing the appeal. We have considered the said submissions and satisfied that the assessee has valid explanations for not appearing before the Ld.CIT(A) as well as for not presenting the appeal in time before this Tribunal. Therefore, we are condoning the said delay and proceeded to decide the appeal on merits.

At the time of hearing, the Ld.AR submitted that the assessee is having all the documentary evidences to show that the cash withdrawals are from the current account maintained by them and the source for the said balance is the capital contribution by the partners. The Ld.AR further submitted that section 69 addition could not be made for the cash withdrawal from the bank account. The Ld.AR therefore submitted that an another opportunity may be granted to the assessee to furnish the various documentary evidences including the summary of capital contributions made by the managing partners which would establishes the sources for the cash into their bank account.

The Ld.DR submitted that the assessee is a non-co-operative assessee as seen from the assessment order as well as the appellate order and therefore prayed that the assessee need not be shown any indulgence and prayed to dismiss the appeal.

We have heard the arguments of both sides and perused the materials available on record.

Considering the said facts and also the legal plea raised by the assessee, we are inclined to set aside the order of the Ld.CIT(A) and remit this issue to the file of the Ld.CIT(A) for fresh consideration in accordance with law. We also direct the assessee to pay a sum of Rs. 10,000/- towards the cost for showing the indulgence. The said cost amount should be paid into the account of Prime Minister’s National Relief Fund and the receipt should be produced before the Ld.CIT(A), otherwise the benefit granted under this order would go automatically.

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