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Facts
The assessee filed an appeal against the CIT(A)'s order upholding additions made by the AO. The assessment order determined the total income higher than the returned income, including additions under Section 68. The appeal was initially filed beyond the prescribed time limit but was condoned.
Held
The Tribunal, noting the agreement between the parties that the factual matrix was not clear, restored the issues in dispute back to the Assessing Officer for a de novo assessment. This was to be done after due verification and providing a reasonable opportunity to the assessee.
Key Issues
Whether the additions made under Section 68 were justified based on available evidence, and whether the AO properly considered the assessee's submissions and documentary evidence.
Sections Cited
68, 143(3), 253(3)
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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA
2017-18 against impugned appellate order dated 01/10/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1069291550(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. In this appeal, the assessee has raised the following grounds:
“The Appellant, profoundly dissatisfied with the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Lucknow (supra), humbly submits this appeal before the Honorable Income Tax Appellate Tribunal (ITAT), seeking relief on the following grounds:-
1. Erroneous Addition under Section 68 of the Income Tax Act, 1961:-The Learned CIT(A) and the Assessing Officer (AO) erred in making an addition of Rs.13,36,162/- under Section 68 of the Income Tax Act, 1961, disregarding the Appellant's documentary evidence, including audited books, VAT records, and State VAT assessment orders which conclusively validate the genuineness of the transactions.
2. Treatment of Cash Deposits During Demonetization as unexplained income:-The AO incorrectly treated cash deposits of Rs.38,00,000/- during demonetization as unexplained income, ignoring appellant's legitimate business receipts from pre-demonetization sales (October 2016).
3. Double Taxation:- The addition of Rs.9,46,162/- (out of cash sales) amounts to double taxation, as the sales were already declared in the Appellant's income (CIT v. Devi Prasad Vishwanath Prasad (1969) 72 ITR194 (SC).
4. Disregard of VAT-Compliant Records:- The AO ignored the Appellant's VAT-compliant sales records and State VAT assessment order, which had no adverse findings, violating the doctrine of consistency (CIT v. Sun Engineering Works [1992] 198 ITR 297 (SC)).
5. Non-Application of Judicial Precedents : The authorities failed to consider binding judicial precedents, including:
Smt. Harshtta Chordia v. ITO (2008) 298 ITR 349 (Raj): Cash receipts against goods delivery are trade advances, not unexplained credits.
Violation of Natural Justice : The CIT(A) upheld the AO's order without independent inquiry or due consideration of the Appellant's submissions, violating principles of natural justice (Sahara India (Firm) v. CIT [2008J 169 Taxman 328 (SC).”
(A.1) This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. As per noting of registry, this appeal is time barred by 55 days. The assessee has submitted application for condonation of delay in filing of the appeal; pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing.
(B) In this case assessment order dated 29/12/2019 was passed u/s 143(3) of the Act, whereby assessee’s total income was determined at Rs.16,14,457/- as against returned income of Rs.2,78,295/-. In the aforesaid assessment order, two separate additions were made u/s 68 of the Act, amounting to Rs.3,90,000/- and Rs.9,46,162/-; the total addition being Rs.13,36,162/-. The assessee’s appeal was dismissed by the learned CIT(A) vide impugned appellate order dated 01/10/2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 01/10/2024 passed by the learned CIT(A).
(C) In the course of appellate proceedings in Income Tax Appellate Tribunal, statement of fact, grounds of appeal and annexures relating thereto were filed from the assessee’s side. At the time of hearing, representatives of both sides, the learned Counsel for the assessee as well as the learned Addl. CIT (D.R.) for Revenue were in agreement that the factual matrix, as available on record, is not sufficiently clear; and further that the issues in dispute regarding the aforesaid additions of Rs.3,90,000/- and Rs.9,46,162/- (total addition being Rs.13,36,162/-) should be restored back to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after due verification, proper marshaling of facts and after providing reasonable opportunity to the assessee.
(D) In view of the foregoing, as representatives of both sides are in agreement, the issues in dispute are restored back to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after providing reasonable opportunity to the assessee.
(E) In the result, the appeal of the assessee is allowed for statistical purposes.
(Order pronounced in the open court on 09/05/2025)