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Facts
The Assessing Officer made an addition of Rs.10,62,049/- as unexplained bank deposits under Section 69A of the Income Tax Act, 1961, based on an assessment under Section 144. The Assessee's claim that his electronically filed ITR for A.Y. 2020-21 was not considered was rejected by the Ld. CIT(A) as the ITR was e-verified late and no evidence was provided to substantiate the deposits as business receipts eligible for Section 44AD. The Assessee has now presented additional evidence including invoices and Form 26AS.
Held
The Tribunal noted the Assessee's failure to submit relevant documents before the lower authorities, which led to the ex-parte assessment. Considering that the new documents submitted by the Assessee are crucial for a just decision and would not prejudice the Revenue, the Tribunal decided to remand the case back to the Assessing Officer for fresh determination after taking into consideration these additional documents.
Key Issues
Whether the addition of unexplained bank deposits under Section 69A was justified without considering the Assessee's belated ITR filed under Section 139(4) showing income under Section 44AD, and the admissibility of additional evidence at the appellate stage.
Sections Cited
250, 144, 69A, 139(4), 44AD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER Assessment Year: 2020-21 Shri Vijay Kashinath Asstt. Commissioner of Somwanshi, Income Tax Officer Room No.17, Central Circle-1, Shrisai Krupa Chawl No.1, Qureshi Mansion, MIDC Pipe Line, Vs. Gokhale Road, Behind Jagruti Apartment, Thane (West), Shastri Nagar, Maharashtra - 421301 Kalwa, Maharashtra – 400 605 PAN: CLYPS6479J (Appellant) (Respondent) Present for: Assessee by : Shri Rajesh Athavale, Ld. A.R. Revenue by : Shri Kiran Unavekar, Ld. Sr. D.R. Date of Hearing : 16.01.2025 Date of Pronouncement : 16.01.2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 26.09.2024, impugned herein, passed by the Ld. Addl/Joint Commissioner of Income Tax (Appeals) (in short “Ld. Addl./Joint Commissioner”) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2020-21.
Shri Vijay Kashinath Somwanshi 2. In the instant case, the Assessing Officer (in short ‘the AO’) vide assessment order dated 25.09.2021 u/s 144 of the Act has made the addition of Rs.10,62,049/- on account of bank deposits in the G. Parshik Sahkari Bank Ltd. which was treated by the Assessee as unexplained and added the same in the income of the Assessee u/s 69A of the Act.
The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner by filing first appeal and claimed that during the assessment proceedings in the faceless scheme, the Assessee’s CA filed his reply and also verified his ITR electronically on 31.03.2021, however, the return filed by the Assessee was still not considered by the AO.
The Ld. Commissioner considering the claim of the Assessee affirmed the aforesaid addition of Rs.10,62,049/- by dismissing the appeal of the Assessee and holding as under:
“That no proof of sending the duly signed ITR-5 form to CPC Bengaluru has been filed by the Assessee and from the submission filed by the Assessee it is seen that the said return was e-verified only on 07.10.2021 i.e. after completion of the assessment. Thus, the return filed by the Assessee cannot be considered as valid return because the last date of filing the ITR was 31.03.2021. Hence, the claim of the Assessee that AO did Shri Vijay Kashinath Somwanshi not consider the ITR filed by him is factually incorrect. Because in the absence of verification ITR submitted on income tax portal, ITR is not complete and the AO cannot assess the same. The Assessee has not made any attempt to substantiate the deposits in the bank accounts or on account of particular business receipts. In the absence of any documentary evidence that such deposits are in the nature of business receipts, the Assessee cannot claim that it should be taxed as per the provision of section 44AD of the Act”.
The Assessee, being aggrieved, has preferred the instant appeal before this Tribunal and has claimed that during the appellate proceedings, the Assessee had filed a belated income tax return u/s 139(4) of the Act by showing his business income u/s 44AD of the Act and therefore the Ld. Commissioner should have considered profit declared in the income tax return as income instead of gross profit receipts, which were credited to his bank accounts. Since the Assessee could not file the proper submission and documentary evidence, which are filed before this Court, the Ld. Commissioner confirmed the addition made by the AO. The Assessee due to lack of knowledge or miscommunication could not file the copies of invoices raised by his proprietary concern on his clients and Form 26AS before the authorities below, however, the documents have material bearing on the grounds of appeal and crucial for the substantial justice and therefore the same may be admitted as additional evidence. The Assessee in support of non
On the contrary the Ld. DR refuted the claim of the Assessee by supporting the orders passed by the Authorities below.
Heard the parties and perused the material available on record and given thoughtful considerations to the peculiar facts and circumstances of the case and the orders passed by the authorities below. Admittedly, the Assessee before the authorities below failed to file relevant documentary evidence, which resulted into passing the assessment order u/s 144 of the Act and the impugned order more or less as ex-parte. As the documents filed by the Assessee goes to the root of the case and no prejudice shall be caused to the Revenue Department if the same are to be considered for proper and just decision of the case. Even otherwise in the absence of relevant documents the issue involved in the instant case remained to be adjudicated in its right perspective and proper manner, thus for the just and proper decision of the case and substantial justice this Court is inclined to remand the instant case to the file of the AO for determination afresh by taking into consideration the documents as filed before this Court, which the Assessee undertakes to file before the AO.