SHRI. SHAMSHEER AHMED,BENGALURU vs. THE INCOME TAX OFFICER, WARD INTERNATIONAL TAXATION- 1(1), BENGALURU

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ITITA 1163/BANG/2022Status: DisposedITAT Bangalore16 January 2023AY 2017-185 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's argument that the assessment order was passed ex-parte. The CIT(A) heard the case on limited dates and passed the order hastily, without discussing the assessee's submissions. The Tribunal acknowledged that the CIT(A) did not forward the evidence to the AO for examination. In the interest of justice, the Tribunal decided to remand the entire issue in dispute back to the file of the AO for fresh consideration. The AO is directed to dispose of the case after providing an opportunity of hearing to the assessee and examining the submissions properly. The Tribunal refrained from commenting on the merits of the issue. The ratio decidendi is that where an assessment order is ex-parte and the appellate authority's order appears to be passed hastily without proper appreciation of evidence and submissions, a remand to the AO for fresh adjudication is warranted in the interest of justice.

What were the facts?

The appeal by Shri Shamsheer Ahmed (the assessee) is against the order of CIT(A)-12, Bengaluru, dated 30.11.2022, for Assessment Year 2017-18. The Assessing Officer (AO) made an ex-parte assessment under Section 144, adding Rs. 20,00,000/- for cash deposits in the assessee's bank account during the demonetization period. The assessee contended the funds were from savings accumulated over 10 years of working in Saudi Arabia. The CIT(A) confirmed the addition, stating the assessee did not produce bank account details of earlier savings. The assessee appealed to the Tribunal, raising grounds related to the CIT(A)'s order, the total income determination, non-forwarding of evidence, confirmation of the addition, and the source of funds, as well as interest under Sections 234A and 234B. Additional grounds concerning principles of natural justice and undue haste by the AO were also filed.

What were the issues?

1. Whether the learned Commissioner of Income Tax [Appeals] erred in confirming the addition of cash deposits amounting to Rs. 20,00,000/- under Section 69 read with Section 115BBE of the Income Tax Act, 1961 (the Act), on the facts and circumstances of the case? 2. Whether the learned Commissioner of Income Tax [Appeals] erred in not forwarding the evidences furnished by the Appellant for the first time during the appellate proceedings to the learned assessing officer for examination and comments? 3. Whether the learned Commissioner of Income Tax [Appeals] failed to appreciate that the source for cash deposits amounting to Rs. 20,00,000/- were from accumulated savings? 4. Whether the learned Commissioner of Income Tax [Appeals] failed to appreciate that the learned assessing officer erred in passing the assessment order without following the principles of natural justice and by passing the order in undue haste with a prejudiced mind? Assessee's Contentions: The AO passed an ex-parte assessment order. The CIT(A) heard the case hastily and did not properly consider the submissions and evidence. The CIT(A) failed to forward the evidence to the AO for examination. The cash deposits were from accumulated savings from working abroad. The assessment order was passed without following principles of natural justice and in undue haste. The assessee relied on judgments in Karanvir Singh, NTPC Ltd. vs. CIT, and Gundathur Thimmappa & Sons vs. CIT. Revenue's Contentions: The learned DR strongly opposed the admission of additional grounds, stating there was no reasonable cause for not raising them earlier.

Which sections of the Income-tax Act were involved?

Section 69,Section 115BBE,Section 144,Section 234A,Section 234B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENGALURU (SMC

Before: Shri Chandra Poojari

For Appellant: Shri Pranav Krishna, Advocate
For Respondent: Shri Ganesh R. Ghale, Standing Counsel
Hearing: 16.01.2023Pronounced: 16.01.2023

IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU (SMC) “C” BENCH, BENGALURU Before Shri Chandra Poojari, Accountant Member IT(IT)A No. 1163/Bang/2022 (Assessment Year: 2017-18)

Shri Shamsheer Ahmed vs The Income Tax Officer No. 43, 1st Floor, RBI Extension International Taxation 1(1) Rajanna Layout, Jayanagar Bengaluru Bengaluru 560043 PAN – ACBAA2610B (Appellant) (Respondent) Assessee by: Shri Pranav Krishna, Advocate Revenue by: Shri Ganesh R. Ghale, Standing Counsel Date of hearing: 16.01.2023 Date of pronouncement: 16.01.2023 O R D E R Per: Chandra Poojari, A.M. This appeal is directed against the order of learned CIT(A)-12, Bengaluru dated 30.11.2022 for AY 2017-18.

2.

The assessee has raised the following grounds of appeal: - “1. The Order of the learned Commissioner of Income Tax [Appeals] - 12, Bengaluru passed under Section 250 of the Act dated 30/11/2022 in so far as it is against the Appellant, is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case. 2. The Appellant denies himself liable to be assessed on a total income of Rs. 20,19,025/- as determined by the learned assessing officer and confirmed by the learned Commissioner of Income Tax [Appeals] as against the correct income of Rs. Nil/- on the facts and circumstances of the case. 3. The learned Commissioner of Income Tax [Appeals] erred in not forwarding the evidences furnished by the Appellant for the first time during the appellate proceedings to the learned

2 IT(IT)A No. 1163/Bang/2022 Shri Shamsheer Ahmed assessing officer for examination and comments on the facts and circumstances of the case. 4. The learned Commissioner of Income Tax [Appeals] erred in confirming the addition of cash deposits made in the bank account of the Appellant under Section 69 r.w.s. 115BBE of the Act amounting to Rs. 20,00,000/- on the facts and circumstances of the case. 5. The learned Commissioner of Income Tax [Appeals] failed to appreciate that the source for cash deposits made in the bank account of the Appellant amounting to Rs. 20,00,000/- were from accumulated savings on the facts and circumstances of the case. 6. Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies himself liable to be charged to interest under Section 234A, 234B of the Income Tax Act on the facts and circumstances of the case. Further the levy of interest under Section 234A, 2343 of the Act is also bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernible and are wrong on the facts of the case.” The assessee has also filed the following additional grounds: - “1. The Learned Commissioner of Income Tax [Appeals] failed to appreciate that the learning assessing officer erred in passing the assessment order without following the principles of natural justice and consequently the assessment order is liable to be cancelled on the facts and circumstances of the case. 2 The Learned Commissioner of Income Tax [Appeals] failed to appreciate that the learning assessing officer was not justified in passing the order in undue haste with a prejudiced mind, without considering the details filed by the Appellant and by not providing opportunity to the Appellant in making submissions and furnishing evidences on the facts and circumstances of the case.” 3. The assessee filed petition for admission of additional grounds stating that these grounds do not involve any investigation of facts otherwise on the record of the Department and are also pure question of law. He placed reliance on the judgment of the Hon'ble Supreme Court in the case of NTPC Ltd. vs.

3 IT(IT)A No. 1163/Bang/2022 Shri Shamsheer Ahmed CIT (1998) 229 ITR 382 (SC) and also the judgement of Hon'ble Karnataka High Court in the case of Gundathur Thimmappa & Sons vs. CIT 70 ITR 70 (Kar.) and prayed that these additional grounds may be admitted in the interest of justice and adjudicated.

4.

The learned D.R. strongly opposed admission of additional grounds and also submitted that there is no reasonable cause for not raising these grounds before the lower authorities on earlier occasions.

5.

I have heard the rival contentions and perused the material on record. In my opinion these grounds are emanated from the orders of the lower authorities and there is no need of investigation of any fact otherwise on record of the Department. Being so, I admit the additional grounds of appeal in the interest of justice for the purpose of adjudication.

6.

In this case the AO framed ex-parte assessment order making an addition of Rs,.20,00,000/- under Section 69 of the Income Tax Act, 1961 (the Act). On cash deposit of Rs.20,00,000/- into assessee’s bank account No. 000201628749 with the ICICI Bank during demonetisation period. The assessee carried appeal before the CIT(A) challenging the addition wherein the assessee explained that the said amount of Rs.20,00,000/- was from savings of money remitted by him to India while working in Saudi Arabia for more than a period of 10 years. According to the learned CIT(A) the assessee has not produced bank account details where the assessee kept the earlier savings. Hence, he confirmed the addition. Against this the assessee is in appeal before the Tribunal by way of above grounds.

7.

At the time of hearing the learned A.R. submitted that the assessment order passed by the AO is ex-parte. Before the CIT(A) the case has been heard on very haste i.e., on 03.11.2022 and 24.11.2022. The assessee has produced various submissions and filed evidences in support of the claim of assessee

4 IT(IT)A No. 1163/Bang/2022 Shri Shamsheer Ahmed which has not been properly considered by learned CIT(A) and he has not forwarded the evidences furnished by the assessee for the first time before him to AO for examination and comments. Further the learned CIT(A) passed the order very hastily on 30,.11.2022 without proper appreciation of the submissions made before him by the learned A.R. Hence, the learned A.R. prayed that the issue may be remanded to the AO for effective hearing and disposal of the case of the assessee on merits.

8.

I find force in the argument of the learned A.R. Admittedly the assessment order was passed ex-parte under Section 144 of the Income Tax Act, 1961 (the Act). The learned CIT(A) heard the case on 03.11.2022 and also on 24.11.2022 and passed the order on 30.11.2022 and there is no discussion in his order with regarding to appreciation of various submissions made by the assessee. Hence, in the interest of justice, I remand the entire issue of dispute to the file of the AO for fresh consideration and he shall dispose of the case of the assessee after giving opportunity of hearing to the assessee and examining the submission made by the assessee in proper perspective. Since, I remanded the entire issue in dispute to the file of the AO for fresh adjudication, I refrain from commenting on merits of the issue raised before me.

9.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Dictated and pronounced in the open Court on 16th January, 2023.

Sd/- (Chandra Poojari) Accountant Member Bengaluru, Dated: 16th January, 2023

5 IT(IT)A No. 1163/Bang/2022 Shri Shamsheer Ahmed Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) -12, Bengaluru 4. The CIT - (Intl. Taxn), Bengal 5. The DR, ITAT, Bengaluru 6. Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.

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