RAM RAJ CHOUDHARY,JAIPUR vs. ITO, WARD-1(3), JAIPUR

आयकरअपीलीय अधिकरण] जयपुरन्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES,’’A” JAIPUR

Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k
BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA No. 48/JPR/2025
fu/kZkj.ko"kZ@AssessmentYear : 2021-22

Shri Ram Raj Choudhary
A-44, Maa Karni Nagar
Ward-1(3)
Jaipur
LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: ADDPC 8892 Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Shri Rajendra Sisodia, Advocate jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing

: 24/04/2025

mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 04/06/2025

vkns'k@ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM

This appeal filed by the assessee is directed against the order of the learned National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated
12.12.2024 for the assessment year 2021-22 raising therein following grounds of appeal;
‘’1. The Ld CIT(A) has erred on facts and in law in dismissing the appeal of the assessee for non-prosecution notwithstanding the fact that none of the notices of hearing were served on the assessee as provided by law.

2
2. The Ld CIT(A) has erred on facts and in law in dismissing the appeal of the assessee for non-prosecution, whereas in view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution, as held by Hon'ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra HUF,
(2017)291 CTR 614 (Bom.)

b) Since there is no proper submission has been received either on own instance or ample opportunities provided vide notices u/s 250 of the Act since inception of this appeal on 19.01.2023 i.e. even after passing of almost 1 years and 10 months,
I am of the considered opinion that the appellant has no interest in pursuing the instant appeal. Accordingly, the appeal is being decided on the basis of materials available on record.

c) It is settled law that mere filing of an appeal is not a sufficient exercise of the rights available to the appelant and the same must be duly pursued in an effective manner

3
RAM RAJ CHOUDHARY VS ITO, WARD 1(3), JAIPUR d) The continued non-compliance leads to the conclusion that the appellant is not keen on prosecuting its appeal. Considering the facts and circumstances, and relying on the decision of the Hon'ble, ITAT, Delhi Bench, in the case of CIT Vs
Multiplan India Ltd. reported in 38-ITD-320 and the judgement of the Hon'ble
Madhya Pradesh High Court in the case of Estate of Late Tukoji Rao Holker Vs.
CWT (1997) reported in 223-ITR-480, I have no other alternative except to decide the appeal of the appellant ex-parte.

e) As noticed from the assessment order ample opportunities had been provided to the appellant, however, the appellant was unable to justify his contentions and for the want of proper justification, the AO made the addition and passed order u/s 143(3) of the Act. Moreover, the AO has appropriately explained in detailed the reasonings behind additions made.

f) In these facts and circumstances, I am constrained to be in agreement with the finding of the Assessing Officer and hold that the appellant is unable to substantiate his claims and is not able to controvert the assessment order. The addition made by the Assessing Officer is therefore confirmed

MAY IT PLEASE YOUR HONOUR,
The appellant respectfully begs to submit following facts and details for your honor’s kind consideration in support of grounds of appeal already submitted :


Background and action of the Ld. Assessing Officer and CIT(A) - The appellant had filed his return for AY 2021-22 disclosing a total income of Rs.3,63,010/-. His case was selected for scrutiny for examination of “Cash
Deposits” (Large cash deposits in bank account and assessee has also purchased/sold one or more property (ies) during the year (Both buying and selling transaction are to be considered) Assessee replied from time to time along with supporting evidence. The AO did not consider the reply in the right perspective and ignoring the evidence filed, arbitrarily made an addition of Rs.2,42,96,812/- raising a huge demand of Rs. 2,23,49,721/- The Ld.CIT(A) sustained the addition dismissing the appeal of the assessee on account of non-compliance to the notices issued during appellate proceedings and ignoring the submission made and the evidence filed before him.


Facts of the case- The appellantis a farmer. During the year under consideration, the assessee derived income from sale of Milk and letting of properties. He had purchased two properties during the year, by raising loans from banks. On one hand the AO made addition of all the credits appearing in the bank accounts, ignoring the fact that the source of the same was loans raised, while on the other hand made addition presuming the payment made for purchase of properties as unexplained. Apart from that, he also added the difference between the DLC value and the actual consideration paid for purchasing the properties as Income from other sources u/s 56(2)(vii)(b).


Submission on the grounds of appeal -

5
Ground No.1- The Ld CIT(A) has erred on facts and in law in dismissing the appeal of the assessee for non-prosecution notwithstanding the fact that none of the notices of hearing were served on the assessee, as provided by law – Not pressed
Ground No.2 - The Ld. CIT(A) has erred on facts and in law in dismissing the appeal of the assessee for non-prosecution, whereas in view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution, as held by Hon’ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.)
2.1 The Ld. CIT(A) has made the non-compliance of the notices issued by NFAC, as the basis for dismissal of appeal. For better understanding of the sequence of events, in particular, the issue of notices, a chronological chart is appended below-
S.N o.
Date of Notice
Complian ce date
Remarks
1. 01.03.20
23
Not applicabl e
This notice was not a notice of hearing but was an Intimation of Enablement of Communication window. It was only for assessee’s information and no compliance was required to be made on the part of the assessee.
2. 07.06.20
24
13.06.202
4
The assessee did not come to know about this notice as the said notice was sent on the mail id provided in the ITBA portal, i.ebackofficedudu24@gmail.comw hereas while filing Form-35, it had been clearly mentioned that the electronic communication be sent to kcconstruction.6200@gmail.com
3. 11.07.20
24
16.07.202
4
2.2 The remarks given against each notice, clearly show the compliance made by the assessee. The Ld.CIT(A) has misrepresented the facts by mentioning against each notice that – Notice was sent through ITBA but proceedings remained un-complied with. It would be pertinent to mention that the Ld.CIT(A) has reproduced the entire order of the AO (From page-4 to page-22) in his appellate order which also has mention of the assessee’s submission. As an eyewash, he has tried to show that he is disposing off the appeal on merits as well. He has completely ignored the evidence which clearly substantiated the source of deposits in the bank account, and which clearly evidenced the payment made towards purchase of the impugned properties. The appellate order passed by the CIT(A) is non-speaking and arbitrary. The Ld.CIT(A), in utter disregard of his rightful duty to adjudicate the appeal, misrepresenting the facts, ignoring the glaring evidence, dismissed the appeal, for non-prosecution. A bare glance of the order of the CIT(A) shows that CIT(A) has not addressed itself on various points placed for its determination at all and dismissed the appeal of assessee for default in non appearance. Needless to say, the CIT(A) plays role of both adjudicating authority as well as appellate authority. Under the guise of deciding the appeal on merits, he has reproduced the order of the AO and not even bothered to see that the AO had not given cognizance to the credits in the bank account of the assessee, the narration of which clearly showed that the credits are out of loans taken from bank.
Also the debits clearly showed payment having been made to the sellers of the property. Thus, the CIT(A) could not have shunned the appeal for noncompliance without addressing the issue on merits.

Ground No.3The Ld CIT(A) has erred on facts and in law in confirming the addition made by the AO, without deciding the case on merits and arbitrarily rejecting the appeal for non-prosecution.
3.1 The Ld.AO made the following additions –

(a) Unexplained investment in purchase of property

Rs.61,76,844/-

7
(b) Unexplained investment in purchase of property (wife’s name)

Rs.41,70,244/-
(c) Deposits with HDFC Bank

Rs.78,73,028/-
(d) Deposits with CBI Bank

Rs. 3,45,656/-
(e) Deposits with ICICI

Rs.27,20,669/
(f) Difference in Stamp duty for the purchase of both plots
Rs.30,10,374/-
TOTAL ADDITIONS MADE

Rs.2,42,96,815/-

Date
Amount
Cr.
Nature of Amount
Ref. No.
Remarks
29/08/2020
1380000/- KCC overdraft
84442762

29/08/2020
500000/- Term Loan KCC
84442762

30/08/2020
2925028/- KCC Retail Crop
Production
84442762

10/09/2020
3000000/- KCC Retail Working
03/12/2020
65000/- KCC Retail Crop
Production
84442762
Balance out of loan of Rs.30,00,000/- sanctioned

Apart from the above loan availed jointly by the assessee along with his wife, he had also taken loans from ICICI Bank, the details of which are as under-
Date
Amount
Nature of Amount
25/08/2020
14,09,200/-
Gold Loan
02/03/2021
12,58,700/-
Gold Loan

(2) Besides recording declaration of payment for honour, a notary shall also register notings and protests made. Every notary shall maintain a notarial register in the prescribed Form XV.

(3) Where any demand of acceptance or payment or better security has been made by a clerk, a notary shall, after examination of the entry in the Register relating to such demand, affix his signature thereto, and cause the clerk to affix his signature also to the entry.

(4) Each notary shall, before bringing the Notarial Register into use, add a certificate on the title page specifying the number of pages it contains. Such certificate shall be signed and dated by the notary.

(5)
Every notary shall permit the District
Judge or such officer as the appropriate Government from time to time appoint in this behalf to inspect his register at such times, not often than twice a year, as the District Judge or officer may fix. District Judge or officer appointed by the State Government will have power to lodge a report to the appropriate Government for taking action against a notary.

(6) When the original instrument is in a language other than English, any noting or protest or entry in his register which has to be made in respect of the instrument by a notary may be made either in that language or in English.

(7)
In making presentment of bills or notes, a notary shall observe the provisions of Chapter V of the Negotiable Instruments Act,1881 (26
of 1881).
(8) The notary may-

(1) draw, attest or certify documents under his official seal including conveyance of properties;

(2) note and certify the general transactions relating to negotiable instruments;

(3) prepare a Will or other testamentary documents; and 10
The above Rules, mandatorily require only three items to be registered in the Notarial Register maintained by him in Form-XV, and they are (i) for recording a declaration of payment for honour (ii) for noting an instrument (iii) for protesting an instrument. So, the observation of the AO that the affidavit has no legal value is incorrect. As regards the second observation of the AO, the affidavit of the sellers accompanied by the documents of ongoing litigation in Court negates his stand.The Ld.AO asked no further questions or sought clarification from the assessee. He did not even cross-examine the sellers for ascertaining the facts stated by the assessee, but drew an adverse inference.
3.10 It is submitted that according to the decision of the Supreme Court in the case of Mehta Parikh & Co. v. CIT [1956] 30 ITR 181 (SC), if there is no material whatsoever on record for doubting the veracity of the statements made in the affidavits and if the deponents have also not been subjected to cross-examination for bringing out the falsity of their statements, then the Tribunal would not be justified in doubting the correctness of the statements made by the deponents in the affidavits.
3.11 In the present case, apart from raising his doubts, the Assessing Officer has not placed any material on record for doubting the veracity of the statements made in the affidavit. Further, in the written submission filed to the AO, the assessee had specifically requested the AO to refer the valuation of the impugned properties to the Valuation Officer. The Ld.AO, instead of referring the matter to the Valuation
Officer, pointed out irrelevant flaws in the affidavits as pointed out above, and went on to add the difference between the DLC and the actual consideration received by the aseessee. The AO mechanically applied provisions of section 56(2) to difference between stamp duty value and actual sale consideration paid by assessee and made additions, without making any efforts to find out actual cost of property. If the AO was not convinced with the submissions made by the assessee and not happy with the recitals in the sale deeds, he could have at least referred the matter to Department Valuation Officer. Without considering the merits on record, he had rejected the submissions of the assessee and even not bothered to refer the same to the Department Valuation Officer.
3.12 It would be pertinent to reproduce the proviso to Section 56(2)(vii) which reads as under - Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections:
3.13 In the present case the Assessing Officer has made addition under section 56(2)(vii)(b) without making reference to the Valuation officer as required by the 11
RAM RAJ CHOUDHARY VS ITO, WARD 1(3), JAIPUR above proviso. In the case of ITO vs. Aastha Goel the Hon'ble ITAT, Delhi bench held the addition made u/s 56(2)(vii)(b) to be invalid in the absence of the reference to the valuation officer. Further, the Hon'ble ITAT also rejected the request of the Department to set aside the matter to the file of the Assessing
However, the AO, CIT(A) & Tribunal held that as the market value of the land was assessed by the District Sub