MUKESH KUMAR SAINI,DAUSA RAJASTHAN vs. ITO WD, DAUSA, ITO WD, DAUSA

2. On the facts and in the circumstances of the case as well as the AO erred in imposing penalty of Rs.20,57,683/- u/s 271(1) (c ) of I.T. Act, 1961 and simultaneously ld.CIT(A) erred in sustaining the penalty without establishing either the concealment of income which is liable to be quashed.

2.1 Apropos grounds of appeal of the assessee in it is noticed that the ld.CIT(A) has dismissed the appeal of the assessee by observing at 7.4 of his order as under:-

‘’7.4 I have perused the grounds of appeal, statement of facts and the assessment order. In the present appeal total 9 grounds of appeal have been raised. Ground no.1 is general in nature and does not require separate adjudication. Therefore, it is worth dismissal and accordingly, ground no 1 is dismissed. Ground no.9 is residual in nature During the entire appellate proceedings no grounds of appeal were added altered or amended Therefore it is worth dismissal and accordingly ground no 9 is dismissed. Ground No.7 is raised against the initiation of penalty proceedings u/s.271(1)(c) of the Income Tax Act, 1961 Penalty proceedings are separate proceedings. The ground raised in the present appeal is premature at this stage. It is worth dismissal Accordingly, ground no 7 is dismissed. Ground no. 5 is raised for condonation of delay. The condonation of delay has already been allowed and discussed at para 2.1 of the present appellate order Accordingly, ground no 5 is allowed. Grounds no.2,4 and 6 are interrelated and raised directly or indirectly against the addition of Rs. 70,39,970/-made under section 68 of the Act. In this case, the appellant had not filed a return of income u/s 139(1). However, the appellant has deposited cash of Rs 72,42.500/- in Bank of Baroda during the year under consideration. Therefore, notice u/s 148 of the Act was issued after following due procedure for the same. The appellant filed income tax return in response to notice issued u/s 148 on dated 30.05.2022 declaring total income of Rs. 2,02,530/- Further vide reply dated 25- 10-2022, he submitted that the source of cash deposit in the bank account No. 47740100001009 is from cash sales and gift received from mother In this connection, the A. O has called for the quarterly VAT return in support of the purchases and sales, source of incorne of mother along with documentary evidences of creditworthiness, genuineness and identity. But, the appellant has not furnished the requisite evidences. Therefore, the A.O. made addition of cash deposited in a bank account of Rs. 70, 39,970/- under section 68 of the Act. During the course of appellate proceedings, the appellant has not produced any material to controvert the finding of A.O Apart from the statement of facts and grounds of appeal nothing has been put forth by the appellant in support of its claim. Further, from the above conduct of the appellant, it is clear that the appellant is not interested in prosecuting its appeal. In the event, I have no reason to interfere with the findings of the AO In such circumstances, I dismiss the claim of the appellant as raised vide grounds no 2.6 and 8 of the present appeal Ground no.3 and 4 are inter related and raised stating that the appellant is illiterate and doesn't know how to operate the e-mail and he had no information about notices issued. In this regard, it is to be stated that ignorance can never be an excuse. Though the appellant is illiterate, he could have taken help from another person in the family or consultant. However, the appellant failed to do so. The A.O has issued the notices and delivered them through mail In view of above, I found no force in the contention of the appellant Accordingly grounds no. 3 and 4 of the present appeal is dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee submitted that the assessee was ex-parte before the lower authorities as he could not communicate the messages or notices to his earlier counsel being an illiterate person. The ld. AR further submitted that the addition amount is so voluminous which requires proper examination of the facts and the assessee may also be provided one more opportunity to advance/ submit the documents concerning the addition made by the AO amounting to Rs.70,39,970/-. It is noted that the ld. AR of the assessee was thrusting upon that assessee may be provided one more opportunity of being heard by the Department and the case of the assessee may kindly be set aside to the AO for afresh adjudication but by providing adequate opportunity of being heard to the assessee.

2.3 On the other hand, the ld. DR supported the order of the ld.CIT(A) and submitted that the assessee was lethargic in pursuing his case in spite of affording various opportunities to the assessee and therefore, now there is no meaning to provide him one more opportunity.

2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee had deposited cash in Bank of Baroda amounting to Rs.72,42,500/- during the year under consideration. The AO noted that the assessee had not filed his return of income for the relevant yearunder consideration u/s 139(1) of the Act. The case of the assessee was reopened u/s 147 after passing order under clause (d) of Section 148A of the Act dated 28-03-2022 and a notice u/s 148 of the Income Tax Act was issued on 29-09-2022. The case of the assessee was reopened on the issue of cash deposits in Bank of Baroda. The assessee was given number of opportunities and show cause notice dated 18-01-2023 but in spite of that the assessee had failed to comply with the show cause notice and had not submitted any documentary evidence in support of his reply. Thus in absence of documentary evidence of the cash deposited and source of cash of Rs.72,42,500/- was considered as undisclosed income of the assessee and chargeable to tax as per the provisions of Section 68 read with section 115BBE of the Act. Thus, the AO made addition on the basis of the deposits in bank account u/s 68of the Act assuming that the assessee has brought his unaccounted income into bank account through cash deposits. Conclusively the AO made addition of Rs.70,39,970/- in the hands of the assessee computing it as under:-

S.N. Particulars Amount 1. Total taxable income (as per ITR filed on 30-05- Rs. 2,02,530/- 2022) 2. Add:-undisclosed income (72,42,500 minus Rs.70,39,970/- 2,02,530) 3. Total assessed income u/s 144 r.w.s. 144B of the Rs.72,42,500/- I.T. Act, 1961 In first appeal, the ld. CIT(A) has confirmed the action of the AO holding as under:-

‘’7.4………But, the appellant has not furnished the requisite evidences. Therefore, the A.O. made addition of cash deposited in a bank account of Rs. 70, 39,970/- under section 68 of the Act. During the course of appellate proceedings, the appellant has not produced any material to controvert the finding of A.O Apart from the statement of facts and grounds of appeal nothing has been put forth by the appellant in support of its claim. Further, from the above conduct of the appellant, it is clear that the appellant is not interested in prosecuting its appeal. In the event,

I have no reason to interfere with the findings of the AO In such circumstances, I dismiss the claim of the appellant as raised vide grounds no 2.6 and 8 of the present appeal Ground no.3 and 4 are inter related and raised stating that the appellant is illiterate and doesn't know how to operate the e-mail and he had no information about notices issued. In this regard, it is to be stated that ignorance can never be an excuse. Though the appellant is illiterate, he could have taken help from another person in the family or consultant However the appellant failed to do so. The A.O has issued the notices and delivered them through mail In view of above, I found no force in the contention of the appellant Accordingly grounds no. 3 and 4 of the present appeal is dismissed.’’ Since it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A), therefore, he could not put forth his defense. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. The Bench also noted that the ld. CIT(A) has mentioned in his order that the assessee was illiterate and he could have taken help from another person in the family or consultant. However, the appellant failed to do so.’’ In this view of the matter, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 2.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. Thus, the appeal of the assesee is allowed for statistical purposes. 3.1 Apropos grounds of appeal of penalty u/s 271(1)©, it is noticed that the ld. CIT(A) dismissed this appeal of the assessee by observing as under:- ‘’6.4 I have perused the grounds of appeal, statement of facts and the assessment order The only and effective grounds of appeal is raised against the levy of penalty u/s 271(1)(c) of the Act of Rs. 20,57.683/- on the addition made u/s 68 of the Act. In this case, the appellant had not filed a return of income u/s 139(1) However the appellant has deposited cash of Rs 72.42.500/- in Bank of Baroda during the year under consideration Therefore notice uls 148 of the Act was issued after following due procedure for the same. The appellant filed income tax return in response to notice issued u/s 148 on dated 30.05.2022 declaring total income of Rs. 2.02.530 Further, vide reply dated 25-10-2022, he submitted that the source of cash deposit in the bank account No. 47740100001009 is from cash sales and gift received from mother In this connection the A. O has called for the quarterly VAT return in support of the purchases and sales, source of income of mother along with documentary evidences of creditworthiness, genuineness and identity But, the appellant has not furnished the requisite evidences. Therefore, the A.O. made addition of cash deposited in a bank account of Rs. 70, 39,970/- under section 68 of the Act. The AO has levied a penalty of Rs 20,57,683/- u/s 271(1)(c) of the Act vide its order dated 23-08-2023 on the above mentioned addition. Before passing the penalty order. A.O has given the opportunity to the appellant to represent his case. However the appellant has not submitted in response in support of its claim. During the course of appellate proceedings apart from the statement of facts and grounds of appeal nothing has been put forth by the appellant in support of its claim. No specific submission was filed in support of the ground of appeal raised. Further, from the above conduct of the appellant, it is clear that the appellant is not interested in prosecuting its appeal In such circumstances I confirm the penalty of Rs 20.57,683/- levied u/s 271(1)(c) of the Act by the A.O. Accordingly, ground no 1 of the present appeal is dismissed

7.0. In the result, the appeal is Dismissed.

3.2 The Bench has heard both the parties and perused the material available on record. As regards the penalty appeal of the assessee relating to Section 271(1)(c ) of the Act is concerned, the Bench feels that since the quantum appeal of the assessee has been restored to the file of the AO for afresh adjudication, therefore, the fate of penalty appeal will be in accordance with the decision of quantum appeal. Hence, the same is restored to the file of the AO to act in accordance with law.

4.0 In the result, both the appeals of the assessee are allowed for statistical purposes as indicated hereinabove. Order pronounced in the open Court on 11/04/2025.

Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 11/04/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Mukesh Kumar Saini. 2. izR;FkhZ@The Respondent- ITO, Ward-Dausa. 3. vk;djvk;qDr@CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZQkbZy@Guard File {ITA No.168 & 169/JPR/2025} vkns'kkuqlkj@By order

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