ASHOK HIRACHAND SHAH,PANVEL vs. ASSESSING OFFICER WARD 2, PANVEL

Briefly stated the facts are that the assessee is an individual. For the AY 2011-12, he did not file his return of income. Based on AIR information, the Ld. Assessing Officer (“AO”) found that during the relevant AY 2011-12 the assessee has deposited the amount aggregating to Rs.1,99,08,005/- and Rs.84,56,245/- by way of cash/bank transfers in his bank account(s) owned by him and the bank account(s) where he was an authorized signatory. The Ld. AO also observed that the assessee has purchased immovable property of Rs.36,50,000/-; paid credit card bills of Rs.1,24,112/-, the source of which has remained unexplained and also received interest of Rs.1,54,107/- which has not been disclosed for 3

Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC challenging the above additions made by the Ld. AO. There was non-compliance by the assessee to the various notices issued by the Ld. CIT(A)/NFAC. On merits, the Ld. CIT(A)/NFAC upheld the action of the Ld. AO in respect of various grounds of appeal raised by the assessee before him and dismissed the appeal of the assessee for statistical purposes by observing as under : “4. In the grounds of appeal, the appellant has contended that Ld. AO had not specified specific sections under which the addition is made. It is now almost settled that non-mention of section is not fatal to the assessment order. Taxation can be done on general principles of taxation. Reliance is placed on the following decisions: (a) Manoj Agarwal Vs DCIT (2008) 27 CCH 0557 (DelTrib), Special Bench (para 26) (b) A Govind Rajulu Mudaliar Vs CIT (1958) 34 ITR 807 (SC) (c) Shri Arif Vs ACIT ITA No. 976/Bang./2022 (d) Namdev Arora Vs CIT Jalandhar (2016) 72 taxmann.com 124 (P&H) (e) Rajmeet Singh v. Income-tax Officer [2024] 160 taxmann.com 83 (Jharkhand) (f) Dr. Prakash Tiwari Vs Commissioner of Income-tax [1983] 14 Taxman 252 (MP) Thus, the contention of the appellant wherein it has been contended that addition of Rs. 1,49,05,289/- has been made without specifying the section and hence the assessment order is bad in law is rejected.

On merits, it is seen that in the final show cause mentioned on page 2 of the assessment order, AO has mentioned bank accounts owned by the assessee wherein transactions of 1.99 cr. have taken place. In addition, in bank accounts in which assessee is an authorize signatory transactions of Rs. 88,56,245/- have taken place. The assessment order has mentioned and placed response of the assessee in para 4 page 3. In para 5, AO has made an addition of Rs. 1,49,05,289/- as unexplained cash deposits. 6. As per the provisions of S. 69A it is the onus of the assessee to explain money deposited in his bank account to the satisfaction of the assessing officer. The provisions of Section 69A are amongst the deeming provisions of the Act from S. 68 to S. 69D. The jurisprudence of S. 68 is more or less equally applicable to section 69A. The first onus is on the AO to 'find' any credits which in his opinion is an unexplained credit. When the AO raises a query to the assessee, the onus to explain 'nature and source' of such credit shifts on the assessee. It is a settled jurisprudence that the appellant has to discharge the onus of satisfactorily explaining the identity of the creditors, creditworthiness of the creditors and genuineness of the transactions. The Act provides that in the absence of satisfactory explanation by the assessee, the AO is entitled to form an opinion that such unexplained credits are deemed income of the assessee and thereafter consider the same as taxable income of the assessee during the year. 7. In the case of CIT Vs P. Mohankala (2007) 161 Taxman 169 (SC), Hon'ble Supreme Court has held that such opinion of the Assessing Officer is 'evidence against the assessee'. The relevant extract from the decision is as follows: "The Assessing Officer found that the gifts were not real in nature. Various surrounding circumstances had been relied upon by the Assessing Officer to reject the explanation offered by the Assessees. The Commissioner (Appeals) confirmed the findings and conclusion drawn by the Assessing Officer. The Tribunal concurred with the findings of fact. The findings were based on the material available on record and not on any conjectures and surmises. They were not imaginary as sought to be contended. [Para 22] The findings of fact arrived at by the authorities below were based on proper appreciation of the facts, the material available on record and surrounding circumstances. The doubtful nature of the transaction and the manner in which the sums were found credited in the books of account maintained by the Assessees had been duly taken into consideration by the authorities below. The transactions though apparent were held to be not real one. May be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence. [Para 23] It is true that even after rejecting the explanation given by the Assessees, if found unacceptable, the crucial aspect, whether on the facts and circumstances of the case, it should be inferred that the sums credited in the books of the Assessees constituted income of the previous year, must receive the consideration of the authorities, provided that the Assessees rebut the evidence and the inference drawn to reject the explanation offered as unsatisfactory. Section 68 itself provides that where any sum is found credited in the books of the Assessees for any previous year, the same may be charged to income tax as the income of the Assessees of the previous year, if the explanation offered by the Assessees, about the nature and source of such sums found credited in the books of the Assessees, is in the opinion of the Assessing Officer not satisfactory. Such opinion found itself constitutes prima facie evidence against the Assessees, viz., the receipt of money, and if the Assessees fail to rebut the said evidence, the same can be used against the Assessees by holding that it was a receipt of an income nature.

Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

The assessee’s son Mr. Ajinkya Shah appeared for the assessee. He submitted that the assessee is suffering from critical medical condition and his authorized representative is also not available due to some personal reason. He submitted that the non-appearance/non-compliance before the Ld. CIT(A)/NFAC was not intentional but owing to the unavoidable circumstances beyond the control of the assessee. He further submitted that the assessee was not provided with proper opportunity to represent its case before the Ld. AO who passed the order hurriedly without analyzing the impugned transactions properly. The Ld. CIT(A)/NFAC has merely upheld the action of the Ld. AO without any independent adjudication the merits of the case due to the assessee’s failure to present and substantiate his case before him with relevant documentary evidences to controvert the finding and conclusion of the Ld. AO. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to explain all the transactions and substantiate his case by filing all the requisite details/ documentary evidence before the Ld. CIT(A)/ NFAC to his satisfaction. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the CIT(A)/NFAC to decide the impugned issues afresh on merits, after affording reasonable opportunity of hearing to the assessee.

The Ld. DR, on the other hand, supported the order of the Ld. CIT(A)/NFAC and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A)/NFAC. It is an admitted fact that despite number of opportunities granted, the assessee failed to make any submission before the Ld. CIT(A)/NFAC. The Ld. CIT(A) / NFAC dismissed the appeal of the assessee for the reasons reproduced in the preceding paragraphs. Before us, the assessee has pleaded that non- compliance before the Ld. CIT(A)/NFAC that was not intentional but resulted on account of the above bonafide reasons. We find that the Ld. CIT(A)/NFAC in para 2 of his appellate order has observed that “assessee was issued hearing notices on 06.01.2021, 26.03.2024, 08.11.2024 and 31.12.2024 requesting to submit details supporting his contention in the grounds of appeal. However, the assessee has chosen not to submit any details with respect to the contentions in the grounds of appeal. Thus, there is an abject failure at the end of the assessee to submit relevant evidences in support of his grounds of appeal, and also, submit relevant evidences to controvert the findings and conclusions of AO in the assessment order. It is a settled jurisprudence that mere pleadings are not evidence. It is the duty of the assessee to substantiate the grounds of appeal” and thus on merits the Ld. CIT(A)/NFAC has upheld the findings of the Ld. AO. The assessee has contended that he has a strong case on merits and given an opportunity, the assessee is in a position to explain and substantiate his case by filing all the details/documentary evidence, as may be required/called upon, before the Ld. CIT(A)/NFAC to his satisfaction. Considering the totality of the facts and in the circumstances of the case and in the interest of justice and without going into the merits of the appeal, we deem it fit and proper to set aside the impugned order of the Ld. CIT(A)/NFAC and restore the matter back to his file with a direction to decide the impugned issues on merits as per fact and law, after giving due opportunity of being heard to the assessee. Needless to say, the assessee shall appear and make submissions before the Ld. CIT(A)/ NFAC on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A) / NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The 8

In the result, the appeal of the assessee is allowed for statistical purposes.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File.