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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI ANIL CHATURVEDI
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal filed by the assessee is emanating out of the order of Commissioner of Income Tax (A) – 4, Pune dated 23.01.2019 for the assessment year 2010-11.
The relevant facts as culled out from the material on record are as under :-
Assessee is an individual. In this case, as per AIR information assessment was initially completed u/s 143(3) r.w.s.
147 of the Act on 18.03.2013. Thereafter, assessment was re-
opened u/s 147 of the Act by issuing notice u/s 148 of the Act
dt.23.03.2015 and was served on assessee on 27.03.2015. In
response to notice u/s 148 of the Act, assessee replied that the
return of income filed earlier may be treated as return of income
filed in response to notice u/s 148 of the Act. Subsequently,
notices u/s 143(2) and 142(1) of the Act dated 10.12.2015 were
issued. Thereafter, the case was taken up for scrutiny and
assessment was framed u/s 143(3) r.w.s. 147 of the Act vide order
dt.27.01.2016 and the total loss was assessed at Rs.22,76,613/-.
Aggrieved by the order of AO, assessee carried the matter before
Ld.CIT(A), who vide order dt.23.01.2019 (in appeal No.PN/CIT(A)-
4/Wd-5(2), Pune/238/ 2016-17) dismissed the appeal of assessee.
Aggrieved by the order of Ld.CIT(A), assessee is now in appeal and
has and raised the following grounds :
“1 Appellant contends that, the learned AO erred in law and on facts in assuming jurisdiction u/s 147 of the ITA, 1961, as necessary sanction of the learned JCIT, which is mandatory requirement of section 151 of the ITA, 1961, is not discerning from:
a) notice u/s 148 of the ITA, 1961; b) reasons record by the learned AO and c) assessment order and assessment records
As such, appellant contends that, order passed u/s 143(3) r.w.s. 147 of the ITA, 1961 is bad in law.
Appellant contends that the reassessment proceedings initiated u/s 147 of the ITA, 1961 by the learned AO were based on mere suspicion and not based on a valid reason to believe escapement of income. From the "reasons" recorded, it reveals, no any conspicuous application of mind is reached to form belief of any escapement of income.
Appellant contends that the order passed by the learned AO u/s 143(3) r.w.s. 147 of the ITA, 1961 is bad in law, since, objections raised by the appellant to the reassessment proceedings were not disposed-off by passing a speaking order by the learned AO.
Appellant contends that the learned CIT(A)-4, Pune erred in law and on facts in sustaining the addition of Rs. 19,00,000/- u/s 69C of the ITA, 1961 made by the learned AO.
Appellant contends that the learned AO erred in law and on facts in invoking provisions .of section 69C of the ITA, 1961 though no any expenditure was claimed by the appellant w.r.t. payments made to Mr. Sanjay Wagholikar.
Appellant contends that the learned AO erred in law and on facts in making addition of Rs. 19,00,000/- u/s 69C of the ITA, 1961. The learned AO ought to have appreciated the fact that the payments of Rs. 19,00,000/- were made out of withdrawals from the bank.”
Ground Nos. 1 to 3 are with respect to the re-opening of
assessment proceedings and ground No.4 to 6 are with respect to
addition of Rs.19,00,000/- u/s 69C of the Act. All the grounds are
considered together.
4.1. During the course of assessment proceedings, on
verification of cash books of assessee, AO noticed that assessee
had made cash payments aggregating to Rs.19,00,000/-, to Shri
Sanjay Wagholikar on different dates which according to AO had
escaped assessment. On inquiry assessee submitted that cash
payments were made to Shri Sanjay Wagholikar to discharge
business liability but failed to prove the nature of business and
also could not produce any documentary evidence to prove that
there was business exigency with Shri Sanjay Wagholikar. As
assessee did not offer any satisfactory explanation in respect of
transactions with Shri Sanjay Wagholikar, AO invoked the
provisions of Sec.69C of the Act and accordingly made an addition
of Rs.19,00,000/- on account of unexplained expenditure to the
total income of the assessee. Aggrieved by the order of AO,
assessee carried the matter before Ld.CIT(A), who upheld the order
of AO.
Aggrieved by the order of Ld.CIT(A), assessee is now in
appeal.
Before me, Ld.A.R. submitted that Ld.CIT(A) has passed ex-
parte order and has not decided the issue on merits. He
submitted that non-attendance on the last date of hearing before
Ld.CIT(A) was on account of non-serving of notice. He submitted
that the matter may be remitted back to Ld.CIT(A) for adjudication
on merits and further assessee undertakes to appear before
Ld.CIT(A). Ld. D.R. on the other hand supported the order of lower
authorities.
I have heard the rival submissions and perused the material
on record. The issue in grounds 1 to 3 is with respect to the re-
opening of assessment proceedings u/s 143(3) r.w.s 147 of the Act
and ground Nos.4 to 6 is with respect to the addition of
Rs.19,00,000/- on account of unexplained cash payments made
to Shri Sanjay Wagholikar. The perusal of the assessment order
reveals that no details were filed by the assessee before AO in
respect of cash payments to Shri Sanjay Wagholikar and therefore
he considered the entire cash payments as unexplained
expenditure and made its addition u/s 69C of the Act. The order
of Ld.CIT(A) reveals that Ld.CIT(A) has passed an ex-parte order
without deciding the issue on merits. It is a settled law that
Ld.CIT(A) has no jurisdiction to dismiss the appeal of the assessee
without going into the merits of the issue before her. Even in an
ex-parte order, the Ld.CIT(A) should have decided the grounds of
appeal of the assessee on merits thereof. Considering the aforesaid
facts and in view of Ld.A.R.’s undertaking that assessee will co-
operate and appear before Ld.CIT(A), I am of the view that in the
interests of justice and fair play, the assessee be given one more
opportunity to present his case before Ld.CIT(A). I therefore remit
the issue back to Ld.CIT(A) to decide the issue on merits in
accordance with law. Needless to state that Ld.CIT(A) shall grant
adequate opportunity of hearing to both the parties. In view of my
decision to restore the issue to Ld.CIT(A), I am not adjudicating on
merits the grounds of the appeal raised by the assessee. Thus, the
grounds of assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for
statistical purposes.
Order pronounced on 30th day of October, 2019.
Sd/-- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 30th October, 2019. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-4, Pune. 4. Pr. CIT-3, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक सद�य” / DR, ITAT, “SMC” Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार/ BY ORDER
// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.