MALVINDER SINGH,KURUKSHETRA vs. ITO, KURUKSHETRA

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ITA 527/CHANDI/2017Status: DisposedITAT Chandigarh23 July 2019AY 2011-127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that mere narrations of bank entries without supporting evidence do not constitute a sufficient explanation. However, considering the assessee's plea and the lack of discussion on past business history, the case was remanded.

What were the facts?

The assessee failed to participate in assessment proceedings, leading to an ex-parte order under Section 144. The assessee later filed fresh evidence before the CIT(A) explaining bank deposits, citing involvement in a criminal case as the reason for non-appearance.

What were the issues?

Whether the CIT(A) erred in confirming the addition made ex-parte and whether the assessee was prevented by sufficient cause from participating in the assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCH

Before: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM

For Appellant: Shri Sudhir Sehgal
Hearing: 15.07.2019Pronounced: 23.07.2019

आदेश/ORDER PER DIVA SINGH

The present appeal has been filed by the assessee assailing the correctness of the order dated 04.01.2017 of CIT(A) Karnal pertaining to 2011-12 assessment year on the following grounds:

1.

That Ld. CIT (A) erred in confirming the addition of A.O made in ex-parte order u/s 144. 2. That Ld. CIT (A) failed to appreciate the true facts of the case explained before him and in written submissions too. 3. That Ld. CIT (A) also failed to appreciate and consider that cash-deposits were either out of sale- proceeds of tractors, agriculture loan raised from banks and other general transactions. 4. That the appellant be allowed to submit an additional evidence at this stage as appellant could not submit before A.O or CIT (A) level as was involved in a criminal proceedings. 5. That the appellant craves leave to amend, alter or delete any of the above grounds of appeal before or at the time of hearing of appeal. (emphasis supplied)

ITA 527/CHD/2017 A.Y. 2011-12 Page 2 of 7

2.

The ld. AR inviting attention to the record submitted that the

assessment in the case of the assessee had been concluded u/s

144 of the Act by an order dated 04.03.2014 as the assessee failed

to participate in the proceedings before the AO. Accordingly, in

these circumstances the assessee filed fresh evidences before the

CIT(A). These evidences, it was submitted, were referred to the AO

by the CIT(A) and without confronting the Report, the CIT(A) by

merely relying upon the report of the AO dismissed the appeal of

the assessee. It was his submission addressing the impugned

order that in case the evidences were found to be not sufficient or

complete, either by the AO or the CIT(A) then this fact should have

been communicated to the assessee.

2.1 Addressing the reasons for the non-appearance before the

AO, copy of the decision dated 13.01.2015 of the Additional

Session Judge (exclusive Court for heinous crimes against

women) Kurukshetra was filed. Referring to the said order, it

was submitted that the assessee had been implicated in a false

case instituted on 13.10.2011/24.02.2014 and had been acquitted

subsequently. Thus, in the facts of the present case, it was

submitted that the assessee was prevented by a sufficient cause

for non-participating before the AO justifying the filing of fresh

evidences. Referring to the order it was submitted that the

assessee was one of the accused and his name is appearing at

Sr.No. 4, Malwinder Singh S/o Shri Gurnam Singh. On a perusal

ITA 527/CHD/2017 A.Y. 2011-12 Page 3 of 7

of the order it is seen that a criminal case instituted on the basis

of a dying declaration of Ms. Dhanpati implicating the assessee

amongst others for offences under sections 148, 302, 120-B, 109

and 149 of the Indian Penal Code, 1860 who died of burn injuries

on the night of 25.06.2011 claiming that she was set ablaze in

broad daylight on 24.06.2011 at about 11 a.m. while ploughing a

field which she had taken on lease from Gram Panchayat in an

open auction on 02.06.2011. The case was closed as it was seen

that on 23.06.2011 physical possession of land was handed over to

her and no untoward incident had happened. The prosecution

failed to show previous enimity and lack of motive noticing that

the witnesses relied upon had turned hostile. Relying on the order

of acquittal, it was submitted that the assessee admittedly

remained pre-occupied and non-represented before the AO.

2.2 Inviting attention to the impugned order as well as the

assessment order, it was submitted that the assessee has been

described as ‘Malwinder Singh S/o Shri Gurnam Singh, M/s

Dashmesh Automobiles. Thus, it was his submission that the

assessee had a stated business was a fact available to the AO as

well as the CIT(A). Relying on the copy of the narrations of the

credit and debit entries maintained in the ICICI Bank account

filed before the CIT(A) as fresh evidences confronted to the AO, it

was submitted that the assessee believed that these narrations of

the entries fully explained the credit and the debit entries. On a

ITA 527/CHD/2017 A.Y. 2011-12 Page 4 of 7

perusal of the same it was seen that these were mere narrations

without any supporting evidences and thus, to the extent that the

explanation was not substantiated, we find cannot be faulted with.

2.3 The ld. AR in response re-iterated that had this fact been

communicated, the assessee being in a position to file supporting

documents would have filed them.

2.4 Accordingly, it was his prayer that the issue may be

remanded back.

2.5 Without prejudice to the above arguments, it was also

submitted that in the facts of the present case, there is no clear

finding as to whether the evidences have been admitted or not by

the CIT(A) is not clear.

2.6 Addressing the past history of the assessee on the stated

activity, on query it was stated that the assessee has been

engaged in this line of business of selling agricultural implements

and old tractors etc. for the last many years, the exact numbers, it

was stated, he was not readily in a position to address

immediately, the matter may be enquired into by the tax

authorities on remand.

3.

The ld. Sr.DR Mr.Jaiswal, on the other hand on a perusal of

the narrations of the credit and debit entries in the specific Saving

Bank Account maintained in ICICI, Pehowa submitted that most

definitely the evidence is neither sufficient nor complete.

ITA 527/CHD/2017 A.Y. 2011-12 Page 5 of 7

Accordingly, it was submitted that the CIT(A) on facts was fully

justified in coming to the said conclusion.

3.1 The fact that this shortcoming pointed out by the AO was not

confronted to the assessee was not disputed by him. Prayer for

remand back, accordingly was not objected to.

4.

We have heard the rival submissions and perused the

material available on record. It is seen that admittedly at the

assessment stage, the assessee who had returned an income of Rs.

1,79,730/- was required to explain the deposits of Rs. 72,15,100/-

made in ICICI Bank, Pehowa, Kurukshetra by the AO after

issuance of statutory notices etc. On a failure of the assessee to

participate in the proceedings, addition of the said amount stood

made by the AO by an order u/s 144 of the Act.

5.

In appeal, the assessee explained that on account of a

criminal case against him, he could not participate before AO.

Accordingly, fresh evidences were filed to explain the deposits

made in the specific bank account. We have considered the fresh

evidences before the CIT(A) which is shown to consist of mere

narrations of the entries in the specific bank account. On a

consideration thereof, we have no hesitation in holding that

without the benefit of supporting evidences these cannot be

contemplated to be a “sufficient explanation” on facts in the eyes

of law.

ITA 527/CHD/2017 A.Y. 2011-12 Page 6 of 7

6.

The submissions of the ld. Sr.DR are held to be fully justified

Considering the prayer made by the ld. AR praying for remand so

that supporting evidences can be filed, the parties were required

to address their arguments especially keeping in mind the fact

that the stated activity of dealing in sale of agricultural

implements and old tractors etc. has been stated to have been

carried out for many years which aspect has to be considered as in

the orders of the tax authorities, there is no discussion on the

past history of the assessee. The ld. Sr.DR made a prayer that

since fresh evidences need to be considered by the AO, the matter

may be remanded to the AO. Mr. Sehgal appearing on behalf of

the assessee submitted that the assessee shall place full facts and

evidences before the said authority. Accordingly, accepting the

prayer in the interests of substantial justice after hearing the

parties, it was deemed appropriate to set aside the impugned order

back to the file of the AO with a direction to pass a speaking order

in accordance with law taking into consideration the past history

of the assessee from the stated activity and considering the

evidences filed.

7.

In the eventuality the evidences are found to be insufficient

or incomplete, the AO shall duly confront the said shortcoming

and thereafter pass an order in accordance with law.

8.

While remanding back, it is hoped that the assessee

participates in the proceedings fully and fairly and does not abuse

ITA 527/CHD/2017 A.Y. 2011-12 Page 7 of 7

the trust reposed as in the eventuality of abuse of the trust, it is

made clear that the ld. Assessing Officer shall be at liberty to pass

an order on the basis of record. Said order was pronounced in the

Open Court at the time of hearing itself.

9.

In the result, the appeal of the assessee is allowed for

statistical purposes.

Order pronounced in the Open Court on 23 rd July,2019.

Sd/- Sd/- ( अ�नपूणा� गु�ता ) ( �दवा �संह ) (ANNAPURNA GUPTA) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant – 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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