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Facts
The assessee, a commission agent for Shriram City Union Finance Ltd., collected deposits and received commission. The Assessing Officer made additions on account of cash deposits in the bank account as unexplained credit, treating them as the assessee's income. The CIT(A) upheld the addition without considering the assessee's submissions and evidence.
Held
The Tribunal held that the CIT(A) passed the order without considering the assessee's reply and documents. Therefore, the impugned order was set aside, and the matter was remanded to the Assessing Officer for fresh adjudication.
Key Issues
Whether the CIT(A) erred in confirming the addition of unexplained credits without considering the assessee's submissions and evidence, and whether the matter should be remanded for fresh adjudication.
Sections Cited
68, 194H, 271(1)(c), 144
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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated, 30/10/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2014-15.
The assessee has raised the following grounds of appeal:
1. The ld. CIT(A) erred in confirming the addition of Rs. 57,31,412/- in relation to money deposited as unexplained credit u/s. 68 of the Income tax Act, 1961 made by the AO
Page 1 of 6 without considering the submissions made by the appellant during the course of appellate proceedings.
2. The ld. CIT(A) failed to consider the facts and submissions made by the appellant and erred in appreciate the fact that the appellant is an employee of Shriram Group.
3. The ld. CIT(A) erred in considering the submission of the appellant that he is a commission agent for M/s. Shriram City Union Finance Ltd. and his main activities are to collect the deposits on behalf of M/s. Shriram city Union Finance Ltd. from the nearby villages. On the deposits made, he will get the commission.
4. The AO as well as the ld. CIT(A) both have erred in considering the circumstances of the case and appreciate the fact that during the year under consideration as per Form 26AS, the appellant had received commission under sec. 194H of Rs. 3,28,033/- out of which TDS has been deducted at Rs. 32,805/-. He also received Rs. 90,415/- on which TDS deducted at Rs. 9,042/-. These amounts are nothing but the commission received towards the services rendered to Shriram Financial Products Solutions (Chennai) P Ltd.
5. The ld. AO erred in initiating the penalty proceedings under sec. 271(1)(c) of the I T Act.
6. The appellant craves leave to add, amend or delete any of the above ground on or before the final date of hearing.”
At the time of hearing, the learned AR of the assessee has submitted that the assessee is a commission agent, working with Shriram City Union Finance Ltd and his main activity is to collect the deposits on behalf of the company from nearby villages. The Assessing Officer has made addition on account of cash deposits in the bank account which is nothing, but the collection made by the assessee on behalf of the company. He has further submitted that the Assessing Officer has made the addition for Page 2 of 6 want of supporting evidence, however, the assessee has filed the relevant record and reply before the learned CIT (A) vide acknowledgement dated 10/10/2024 place at page 9 of the paper book, but the learned CIT (A) without considering the reply and documents filed by the assessee has passed the impugned order ex-parte. Thus, he has pleaded that the matter may be remanded to the record of the Assessing Officer for verification of the claim from the relevant records showing that the deposits made in the bank account are nothing but the collection made by the assessee from various clients of Shriram City Union Finance Ltd, on which the assessee is getting only commission as his income.
The learned DR, on the other hand, submitted that despite several opportunities given by the Assessing Officer as well as the learned CIT (A), the assessee has failed to comply with any of the notices issued by the authorities. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has passed the assessment order u/s 144 of the I.T. Act, 1961 when there was no compliance on behalf of the assessee to the various notices issued and consequently, the Assessing Officer has made the addition on account of cash deposits in the bank account of the ass as well as the commission income of the assessee. The assessee challenged the action of the Assessing Officer before the Page 3 of 6 learned CIT (A). However, the learned CIT (A) has dismissed the appeal of the assessee by recording the fact that there is no compliance on behalf of the assessee to the various notices issued and thereby it is observed that the assessee has chosen not to submit anything in support of the grounds of appeal. The relevant findings of the learned CIT (A) in para 3.3 and 3.4 are as under:
Thus, the learned CIT (A) has passed the impugned order on the ground that the assessee has not filed anything in support of the grounds of appeal. However, we find that the assessee has filed the reply on 10/10/2024 along with the documents which are attached with the said reply giving the details of cash deposits, bank account statement etc., Acknowledgement of the filing of the reply is placed at page No.9 of the paper book as under:
It appears that the learned CIT (A) passed the impugned order without considering the said reply of the assessee. Therefore, in the facts and circumstances of the case and in the interest of justice, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication for verification and examination of the relevant records to be filed by the assessee in support of the source of deposits made in the bank account of the assessee. Needless to say, the assessee shall be given an opportunity of hearing before passing the order.
In the result, appeal filed by the assessee is allowed for statistical purposes.