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Facts
The assessee's appeals are against ex-parte orders confirming additions made under Section 69A on account of unexplained cash deposits in a cooperative credit society. The assessee had challenged the reopening of assessment and the additions.
Held
The Tribunal noted the assessee's failure to appear before the Assessing Officer and the CIT(A)/NFAC, and to file submissions. The Tribunal restored the issue to the CIT(A)/NFAC for one final opportunity, directing the assessee to substantiate the case and imposing a cost of Rs. 5,000/- for negligent attitude.
Key Issues
Whether reassessment proceedings are valid when the assessee fails to appear or make submissions before lower authorities, and whether the issue should be restored for a final opportunity.
Sections Cited
69A, 147, 148, 143(2), 142(1), 144, 115BBE, 132
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
O R D E R PER BENCH : The above three appeals filed by the assessee are directed against the separate orders dated 30.04.2024 of the ld.Commissioner of Income Tax(Appeals)/NFAC-Delhi relating to assessment years 2013-14, 2014-15 and 2016-17 respectively. Since identical grounds have been raised by the assessee in all these three(03) appeals, therefore, these were heard together and are being disposed off by this common order for the sake of convenience.
There is a delay of 86 days in filing of these three appeals for which the assessee has filed a condonation application along with an Affidavit explaining the reasons for the delay which is due to service of notice in the “Spam Email” of the concerned Chartered Accountant. After considering the contents of the condonation application filed along with the Affidavit explaining the reasons for such delay and after hearing ld.DR, the delay in filing of the above three(03) appeals are condoned and the appeals are admitted for adjudication.
In all these three appeals, the assessee has challenged the ex-parte orders passed by the ld.CIT(A)/NFAC confirming the addition of Rs.63,54,000/- for A.Y.2013-14, Rs.49,97,800/- for A.Y.2014-15 and Rs.90,30,550/- for the A.Y.2016-17 made by the Assessing Officer under section 69A of the Act on account of cash deposits made by the assessee in the account maintained with Shri Renuka Mata Multistate Co-op Urban Credit Society Limited.
First we take up the appeal in ITA No.1998/PUN/2024.
4.1 Facts of the case, in brief, are that the assessee filed the Return of Income on 10.07.2013 declaring total income at Rs.2,34,517/-. The case was reopened under section 147 of the Act, by recording the following reasons as mentioned by the Assessing Officer in the body of the assessment order. "During the course of search & Seizure action u/s 132 of the IT Act, 1961 carried out in case of the M/s. Shri Renuka Mata Multi State Urban Co- operative Credit Society Ltd. (in short Society/SRMSCS) on 26.05.2017, it was found that the huge money was deposited in the bank accounts maintained in the society and during the course of assessment proceedings the society could not explain the source for the same. During this search action, it is further found that the assessee had maintained accounts in the society and entered into financial transactions exceeding the taxable limits."
4.2 Accordingly, notice under section 148 of the Act, was issued and served on the assessee in response to which the assessee filed his Return of Income on 01.03.2022 declaring total income of Rs.2,86,520/-. Subsequently, the Assessing Officer issued notice under section 143(2) and 142(1) of the Act. However, the assessee failed to comply to the requirements in the said notice. The Assessing Officer, therefore, proceeded to complete the Assessment under section 144 of the Income Tax Act. Since the assessee failed to explain the source of such cash deposits in the account maintained with Shri Renukamata Multi State Urban Cooperative Credit Society Limited and the source of the same remained unexplained, the AO, invoking the provision under section 69A r.w.s.115BBE of the Income Tax Act, 1961 made addition of Rs.63,54,000/- to the total income of the Assessee. Similar additions were made in the other assessment years.
4.3 Since the assessee did not make any submission before the ld.CIT(A)/NFAC despite number of opportunities granted, the ld.CIT(A)/NFAC confirmed the additions made by the Assessing Officer.
Aggrieved with such order of ld.CIT(A)/NFAC, the assessee is in appeal before the Tribunal.
The ld.Counsel for the assessee at the outset submitted that the issue of reopening stands decided in the favour of the assessee by the decision of the Hon'ble Bombay High Court and Co-ordinate Benches of the Tribunal. He, submitted that the addition was wrongly made by the Assessing Officer and sustained by the ld.CIT(A)/NFAC. Relying on various decision, he submitted that the reopening of assessment should be quashed and the addition made by the Assessing Officer and sustained by ld.CIT(A)/NFAC should be deleted.
The Ld.DR on the other hand strongly opposed the arguments advanced by the ld.Counsel for the assessee. He submitted that the assessee neither appeared before the Assessing Officer nor filed any submission before the ld.CIT(A)/NFAC despite number of opportunities granted. Now the assessee cannot say that the issue stands covered in its favour without bringing on record any evidence as to how the same is covered. He submitted that cost should be levied on the assessee for such non-appearance before the Assessing Officer and ld.CIT(A)/NFAC and the grounds raised by the assessee should be dismissed.
We have heard the rival arguments made by both the sides and perused the material available on record. We find that the case of the assessee was reopened on the ground that assessee has made huge cash deposits in the account maintained with Shri Renukamata Multi State Urban Cooperative Credit Society Limited. Since the assessee did not make any submission before the Assessing Officer explaining the source of such cash deposits, the Assessing Officer, invoking the provision of section 69A r.w.s 115BBE of the Act made the addition. We find since the assessee did not make any submission before the ld.CIT(A)/NFAC for which the ld.CIT(A)/NFAC sustained the addition made by the Assessing Officer. While doing so, the ld.CIT(A)/NFAC has passed a speaking order sustaining the addition on merit. It is the submission of ld.Counsel for the assessee that in view of the various decisions of Co-ordinate Benches of the Tribunal and Hon'ble Jurisdictional High Court, the reassessment proceedings initiated by the Assessing Officer are not in accordance with law.
8.1 We do not want to decide the appeal at present, since the assessee has neither appeared before the Assessing Officer nor made any submission before the ld.CIT(A)/NFAC and all the submissions filed by the assessee in the paper book were never filed before the Assessing Officer or ld.CIT(A)/NFAC. In our opinion, when the assessee has bypassed both the lower forums available before him, he cannot come to the Tribunal and claim relief on merit. Since the assessee has neither participated in the assessment proceedings nor participated in the appeal proceedings, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the ld.CIT(A)/NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to move his submissions before the ld.CIT(A)/NFAC on the appointed date without seeking any adjournment under any pretext, failing which the ld.CIT(A)/NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. Since the assessee neither participated in the assessment proceedings nor participated in the appeal proceedings, therefore, we levy a cost of Rs.5,000/- on the assessee for such negligent attitude. Thus, grounds of appeal raised by assessee in all the three appeals are accordingly allowed for statistical purposes.
In the result, all the three appeals filed by the assessee are allowed for statistical purposes.
Pronounced in the open court at the time of hearing itself i.e. on 03.03.2025.