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Facts
The assessee's assessment for AY 2012-13 was re-opened under Section 147 due to cash credits of Rs. 2.30 Crs and an unexplained transaction of Rs. 10,64,940/-. The assessee contended that notices were issued during the Covid-19 pandemic without adequate opportunity to provide evidence. A similar issue in AY 2013-14 was set aside for de novo adjudication.
Held
The Tribunal noted that the assessee did not provide timely details, and the AO did not have sufficient opportunity to examine all facts. Following a similar decision for AY 2013-14, the Tribunal restored the case to the AO for fresh assessment, providing an opportunity to the assessee to present all relevant documents.
Key Issues
Whether the assessment proceedings were vitiated due to the issuance of notices during the Covid-19 pandemic without adequate opportunity to the assessee, and if the case should be restored for de novo assessment similar to a previous year's decision.
Sections Cited
147, 148, 69A, 142(1), 143(2), 144, 144B, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 29.07.2024 for the Assessment Year (hereinafter referred to as "AY”) 2012-13.
At the outset, the Ld.AR of the assessee submitted that the AO after issuing two (2) notices on 01.02.2021 & 16.08.2021 during Covid-19 pandemic period had fastened liability of addition of Rs.2.30 Crs. without giving adequate opportunity to the assessee. In this regard, the Ld.AR also drew our attention to the subsequent AY 2013-14 (in the assessee’s own case) wherein, the AO had made similar addition of Rs.5,43,50,000/- on similar reason, which was set aside back to the file of the AO for de novo adjudication vide order dated 04.09.2024 in for AY 2013-14. Therefore, he prayed that since the issues are similar and for the sake of consistency as well as for the fairness, the assessment for AY 2012-13 also may be restored back to the file of the AO for de- novo adjudication. The Ld.DR opposed the prayer of the assessee and doesn’t want us to give one more innings to the assessee.
Having heard both the parties, we note that the assessee is an individual whose assessment for AY 2012-13 was re-opened u/s.147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) by issuing notice u/s.148 of the Act on 27.03.2019 by taking note that the assessee had cash credits amounting to Rs.2.30 Crs. in his State Bank of India (SBI) bank account. The AO noted that the assessee didn’t file return of income (RoI) and failed to submit any evidences in support of source of cash deposits. Hence, he was pleased to add Rs.2.30 Crs. u/s.69A of the Act; and also made addition of Rs.10,64,940/-, since assessee failed to explain the transaction with M/s.Jay Kay Chemicals, therefore, he added Rs.10,64,940/-. On appeal, the Ld.CIT(A) confirmed the action of the AO.
Before us, the Ld.AR has contended that only two (2) notice were issued by the AO before making the addition and that too during Covid-19 pandemic period. In order to show that notices were issued during Covid- 19 period, he referred to the caption of the assessment order wherein, details of notices issued is found to be recorded, wherein we note that only two (2) notices u/s.142(1) was issued on 01.02.2021 & 16.08.2021 which was during the Covid-19 pandemic. According to assessee, during Covid-19 pandemic, the assessee couldn’t collect relevant evidences to substantiate the nature and source of cash deposits. According to the assessee, due to the second wave of Covid-19 in his place, restrictions were clamped down by the local government because of spread of virus in his area, which prevented the assessee from collecting the relevant evidences and therefore, couldn’t file it before the AO, which led to the AO making addition of the entire cash deposits which according to the Ld.AR was in gross violation of natural justice. Be that as it may, we notice that similar issue had cropped up in the assessee’s own case for AY 2013-14 and the AO had made similar addition of cash deposits in the bank account during the AY 2013-14 to the tune of Rs.5,43,50,000/- u/s.68 of the Act which had come up for adjudication before this Tribunal and the Tribunal had restored the assessment back to the file of the AO for de novo adjudication. Since issues involved are similar, taking note of the fact that notices were issued during the Covid-19 pandemic for the interest of justice and fair play, we are inclined to follow the decision of the Tribunal in the assessee’s own case for AY 2013-14, wherein, this Tribunal held as under:
4.0 We have heard rival submissions in the light of material available on records. The Ld. AO noted that in this case assessment was reopened u/s 147 on account of information that the assessee had deposited large sums of cash in its bank accounts. The assessee did not comply with the Ld. AO’s initial notice u/s 148 dated 30.03.2021 to file return of income. The assessee contested the notice which was responded by the Ld. AO. The Ld. AO issued further notices which remained un-complied. In response to the show cause notices dated 11.03.2022 the appellant submitted reply and also filed its return of income on 16.03.2022. The assessee asked for reasons for reopening which according to Ld. AO were liable to be supplied only if the return was filed in time given in 148. Yet the Ld. AO proceed to supply the assessee’s reasons of reopening. The Ld. AO however proceeded to treat the return as non-est and therefore did not issue notice u/s 143(2). In response to Ld. AO’s notices, the assessee submitted few details on 24.03.2022. The Ld. AO upon analyzing the details concluded that an amount of Rs.5,43,50,000/- was liable for addition u/s 68. The Ld. AO recorded that assessee deliberately avoided assessment proceedings. The Ld.AO accordingly passed an order u/s 147 r.w.s. 144 r.w.s. 144B. The Ld. CIT(A) proceeded to confirm the order of the Ld. AO. In para-8.2 of his order the Ld. CIT(A) observed that the assessee has provided very late details to the Ld. AO leaving no time for him to conduct any enquiry. Accordingly, he confirmed the addition.
5.0 Upon consideration of material available on records, it is abundantly clear that the Ld. AO has not had the opportunity to examine the full facts of the case in the light of requisite evidences. It is also clear that the assessee has not been forthright in timely providing the requested details. Be that as it may in the interest of justice and of fair play, we deem it appropriate to restore the file back to the Ld. AO with the directions to conduct the assessment proceedings de novo after considering all the material placed on records. The assessee is directed to render all the details required by the Ld. AO and comply with his notices. Any non-compliance shall be adversely viewed. The Ld. AO on his part would offer sufficient opportunity of being heard to the assessee. To this extent the order of lower authorities is set aside and the ground of appeal raised by the assessee are allowed for statistical purposes.
4. In the light of the aforesaid decision of the Tribunal for AY 2013-14, we set aside the impugned order of the Ld.CIT(A) and restore the appeal (AY 2012-13) Srinivasan Raju back to the file of the AO with a direction to de novo assess the income of the assessee. The assessee is directed to file all the relevant documents to prove the nature and source of cash deposits as well as regarding transaction with M/s.Jay Kay Chemicals. The AO is directed to frame assessment in accordance to law after giving opportunity to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.