AMRUTLAL NARANDAS RAITHATHA,VERAVAL vs. ITO, WARD-4, VERAVAL, VERAVAL

Grounds of appeal raised by the assessee are as follows: 1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in rejecting ground of appeal related to validity of notice issued u/s 148 of the Income tax Act, 1961. That on facts as also in law, proceedings-initiated u/s 147 of the Act is invalid and assessment finalized on such invalid initiation deserves to be quashed and may kindly be quashed. 3. The Id. Commissioner of Income-tax (Appeal) erred in confirming addition of Rs. 5,87,613/-,u/s 69A of the Act on the alleged that the assessee failed to explain source of cash payment for purchase of flat no. 602, Aakar Heights. The addition made and confirmed is bad in law on facts and in law, which may kindly be deleted. 4. Your Honour's assessee craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.

The facts of the case which can be stated quite shortly are as follows: Assessee is an individual and filed his return of income for A.Y. 2015-16, on 07.10.2015, showing total income of Rs. 3,11,930/-. As per the information available with the Department, the assessee is involved in making payments in cash totaling to an amount of Rs. 5,87,613/-, during the year on various dates to builder M/s Arva Infratech for purchase of flats no. 602 at Aakar Heights Apparently these cash payments are not reconcilable as involving explainable sources as per the return of income (ROI) filed by the assessee and thereby AO initiated relevant re- assessment proceedings as applicable as per law as explained in the assessment order and issued notice u/s 148 of I.T. Act calling for assessee, the ROI for which assessee could not make any compliances as applicable as per law. Subsequently AO issued various hearing notices u/s 142(1) of I.T. Act including the SCN u/s 144 of I.T Act seeking assessee explanation on the explainable sources of said payments involving supporting proofs attributable to assessee as per I.T Act. the assessing officer, then framed the assessment order by making addition of cash payments totaling to an amount of Rs. 5,87,613/-.

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the CIT(A), who has confirmed the action of the assessing officer, observing as follows: 2 “With reference to the same apparently assessee is reiterating the same submissions / contentions as advanced before AO during the assessment proceedings holding the unsecured loans as received in amounts less than Rs.20000 from various persons as involving justifiable claims as lent by these persons from their savings and thereby contended such findings of AO to hold the same as not explainable in the guise of after thought is claimed as not maintainable and requested to consider the same as explainable sources. Apparently assessee did not adduce any such reconcilable substantiations / evidences for availing such small loans that too not exceeding Rs.20000 from various persons for incurring cash payments in making investments in flat as it apparently looks cumbersome and impractical / not likely in practical circumstances of day to day life to avail such small loans for investment purposes as such occasions arises only in times of crises like medical requirements etc., to seek for crowd funding / availment of loans from many individuals that too in varying amounts as per the conveniences of such creditors even in such circumstances. In the instance case it is surprising that assessee is availing uniformly amounts below Rs.20000 from a such 30 or so individuals which apparently looks to overcome provisions of law not to justify amounts in excess of Rs.20000 in cash from each such individual and accordingly in the light of these facts, it is held that, AO has reasonably concluded the same as involving mere after thought in the guise of unsecured loans so as to make an attempt to explain unexplainable cash payments as involving explainable sources and thereby apparently there exists no infirmity in the reasoning adduced by AO in holding such cash payments as involving unexplained money u/s 69A of IT Act as assessee failed to reasonably establish correctness of such loans as involving verifiable claims as per law. Accordingly, assessee various claims as advanced on this analogy to hold the cash payments as explainable contrary to the findings and reasoning of AO is to be treated as not maintainable as per the facts of case as available on record on merits. Further in the submissions assessee is contending to treat these claims of assessee as already made before AO as involving loan availment from 30 persons or so as involving additional evidences to considered afresh under Rule 46A of I.T Rules without appreciating the fact that the same has been perused and examined by AO during assessment proceedings resulting in treating the same as involving mere after thought as analyzed and discussed by AO in the assessment order and accordingly assessee mere contentions as advanced on this analogy to hold the AO examined evidences / submissions as involving fresh submissions is to be treated as not maintainable and accordingly such claims of the assessee are to be treated as not substantiated as per law. Further, assessee has placed reliance on various citations as per the submissions to hold the same as allowable and on perusal of facts of case / ratios of adjudication of the citations as applicable to assessee facts of case involving incurring of unexplainable cash payments in purchase of property and as involving live nexus for initiation of re-assessment proceedings with consequent findings on the after thought claims of the assessee as analyzed and discussed in the assessment order and the same are neither comparable nor equitable in its facts of case and ratios of adjudication apparently as per law. Further, assessee did not bring out such comparative analysis as applicable to assessee facts of case and ratios of adjudication as attributable to the citations as needed to adduce and thereby assessee mere contentions on this analogy is to be treated as not maintainable as per the facts of case and circumstances as explained above. Considering all these facts of case, apparently there exists no infirmity in the order of the AO as per the facts available on record and in view of the same, assessee various inter-related /over-lapping contentions as advanced in grounds of appeal needs to be treated as not maintainable as per law. In the result, assessee appeal is dismissed as not maintainable as per facts 3 available on record on merits as assessee is failed to adduce any such supporting proofs/ evidences as needed to advance the grounds of appeal contrary to the findings of AO in the assessment order. Accordingly, assessee appeal is dismissed as not maintainable as per law”. 5. Being aggrieved by the said order of the Assessing Officer, the assessee filed an appeal before the Ld.CIT(A), but remained unsuccessful. Therefore, assessee is left with no other alternative but to knock on the doors of the Tribunal with this appeal praying for justice.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Learner Counsel for the assessee submitted that assessee could not file the required documents and evidences before learned CIT(A) to prove his claim. Besides, before assessing officer, also the assessee could not submit the required documents and detail, and therefore assessing officer framed the assessment order under section 144 of the Act. Before learned CIT(A) also the assessee could not file the relevant documents and evidences, despite of several opportunities of hearings, vide para no.4 of the order of the CIT(A). Therefore, matter may be restored back to the file of the assessing officer for fresh adjudication.

The ld. DR for the Revenue debarred from objecting the stand of the ld. Counsel.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. I note that in the assessee’s case under consideration, the assessment was carried out u/s 144 of the Act and the 4 impugned order passed by the ld. CIT(A), is non-speaking order, as the assessee could not file required documents and details before the learned CIT(A). Therefore, I do not wish to make any comments on the merits of the grounds raised by the assessee. Considering the above facts, I note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the ld. CIT(A). I note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, I restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, I deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed.

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