PINKY LAXMANRAJ MUTHA,MUMBAI vs. ITO 15 (1)(1), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

1. Violation of Natural Justice:

1. The Ld CIT(A) erred in passing the order dated 28/10/2019 without proper notice and opportunity of hearing to the assessee. Copy of remand report was also not provided, notice issued on incorrect email, thus the CIT(A) order is liable to be quashed .

II. Addition of Rs.54,18,568/- as unexplained cash credit.

2. The Ld CIT(A) erred in considering entire deposits in the form of cash and cheques amounting to Rs54,18,568/ in the Savings Bank with ICICI bank as belonging to assessee without properly appreciating the explanation and documentary evidences including the statement recorded of father Shri Laxman Mutha, therefore the addition in hands of assessee is unjustifiable.

5. The Assessee craves leave to add, amend, alter or delete any of all the above grounds of appeal.”

3. The brief facts of the case are that the assessee was a housewife and her source of income was in the form of tuition income and interest received on loans given and bank deposit. She filed the return of income on 22.03.2012 declaring total income at Rs.2,71,402/-. Information on records showed that there were cash deposits of Rs.35,62,855/- in the ICICI Bank account of the assessee. In reply, the assessee claimed that the said account was operated by her father Shri Laxmanraj S. Mutha for his business transaction of his proprietary concern M/s. R. K. Steel who was engaged in the business of trading and supply of automobile parts. Based upon the information disclosed by assessee, the statements of her father of Shri Laxmanraj S. Mutha was recorded u/s 131. The assessee’s bank account with ICICI Bank was not reflected in the books of the assessee’s father and the AO came to the conclusion that the saving bank account was undisclosed bank account by the assessee to carried out her financial transaction with the motive to evade taxes. The AO proceeded to make an addition of Rs.54,18,568/- as unexplained income earned by assessee from sources not disclosed to the Department. The assessment u/s 143(3) of the Act was completed on 14.03.2014 assessing the total income to the tune of Rs.56,89,970/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee has filed the present appeal before us.

4. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The assessee did not argue the case on merits. It is argued that the during the proceeding of the appeal before the CIT(A), the remand report was called and the AO submitted the remand report dated 17.01.2019 which was not considered that the CIT(A) at that time of deciding the matter of controversy, therefore, the assessee was debarred to get an opportunity of hearing and the assessee was under legal obligation to put up his case and to get an opportunity of being heard in the interest of justice. However, on the other hand, the Ld. Representative of the Department has refuted the contention. The copy of order dated 28.10.2019 perused in which it is quite clear that the CIT(A) has called the remand report by virtue of letter dated 02.03.2016 and the AO submitted the remand report vide letter dated 17.01.2019. While deciding the matter of controversy, the remand report was not properly considered. It is against to principle of natural justice, therefore, we set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy after due consideration of the remand report dated 17.01.2019. Needless to say that an opportunity of being heard is liable to be given to the assessee in accordance with law while deciding the issue. Accordingly, we set aside the finding of the CIT(A) on this issue and direct the CIT(A) decide the matter of controversy afresh accordingly. Accordingly, the issue no. 1 is decided in favour of the assessee against the revenue. The remaining issues are academic in nature, therefore, there is no need to adjudicate in the same.