VINOD KUMAR DHANJA,AJMER vs. INCOME TAX OFFICER, AJMER

(i) CIT vs Multiplan India Ltd. 38 ITD 320(Del) (ii) Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.)

(iii) New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H) (iv) CIT vs. B. N. Bhatachargee and Another 118 ITR 461 (SC) 3.2 The Hon'ble ITAT, Jabalpur Bench, Jabalpur in the case of M/s Bindra Warehousing Corporation, Itarsi vs ITO, and in Jabalpur Sahkari Dugdh Sangh vs ITO, to 203/Jab/2015 has found assessee as not interested in pursuing appeal on the basis of just one non-attendance before the Hon'ble Tribunal. The Tribunal has dismissed appeals for non-prosecution. The Tribunal has held as follows:- "At the time of hearing, none appeared on behalf of the assessee. The notice of hearing was sent to the assessee through RPAD, but there was no compliance on behalf of the assessee. Even no application seeking adjournment was filed. The laws aid those who are vigilant, not those who sleep upon their rights. This principle is embodied in well-known dictum "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUBVENIUN Under these circumstances, in our considered opinion assessee is not interest in prosecuting the appeal. As such we hold that this appeal is liable to be dismissed for non-prosecution." 3.3 Respectfully, following the view taken in the cases cited at paragraph-3.1 above and the decision of the Hon'ble ITAT, Jabalpur Bench, Jabalpur in the cases cited (supra), the appeal filed by the appellant is liable for dismissal for non-prosecution.

No. 1:The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by dismissing the Appeal instead of deciding the Appeal on merits with information/documents available on record. Detailed Submission:

1. The assessee had preferred an Appeal before Ld. CIT(Appeal) against Assessment Order passed by Ld. Assessing Officer by submitting Form 35 alongwith all the documentary evidences relied upon on dated 28/12/2019.

2. Notices for hearing of appeal were issued by the Ld. CIT (Appeals) on dated 05.01.2021 & 12.04.2021 and again after a gap of 3 years on dated 05.08.2024 & 07.12.2024 through email communications.

3. Sir, the assessee is a salaried employee, working with a private share broker firm. Being not well versed with the scheme of e-proceedings in appeals, due to some unavoidable circumstances, he could not participate in the proceedings with respect to Appeal filed by him.

4. Sir, all the documentary evidences in support of the contention of the assessee was duly uploaded alongwith Form 35 at the time of filing Appeal. Therefore, Ld. CIT should have decided the case of the assessee on merits by adjudicating the issue raised in appeal.

5. However, Ld. CIT(Appeal) has dismissed the Appeal in limine for non- prosecution via Order u/s 250 dated 22/01/2025 instead of deciding the case on merits.

6. The assessee would like to bring to your kind attention to the case law of Ask Chemicals India Private Limited Vs. DCIT, Circle-1(1), Pune wherein Hon'ble Pune ITAT held that "NFAC should go into to the merits of the issue in appeal and dispose the appeal" Hon'ble Pune ITAT stated that "Now, the law is settled to the extent that the Commissioner of Income Tax (Appeals) is bound to dispose of the appeal on merits even in the case of ex- parte orders. The settled positions of law mandate the Commissioner of Income Tax (Appeals) to dispose of the appeal by adjudicating the issue raised in appeal on merits" (Refer Page No. 1 to 3 of Paper Book). In the case of the assessee, Ld. CIT(Appeal) has dismissed the Appeal in limine for non-prosecution instead of deciding the case on merits. Keeping in view the above, you are requested to quash the Order u/s 250 passed by Ld. CIT(Appeal) and provide due relief to the assessee. Grounds of Appeal -

No. 2:- The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by not correcting the action taken by Ld. Assessing officer of treating total deposits of Rs.1,06,98,682/- in bank accounts as undisclosed receipts. Detailed Submission:

1. The summary of all the credit entries in the bank account of the assessee is as follows: Particulars Amount of deposits (in Rs. T/f from India Nivesh Commodities Pvt Ltd. 53,33,942 Cash deposit 39,43,500 SB interest 1,900 ATM withdrawals Reversal 20,000 Other clearing Receipts (non cash) 15,94,451 Total 1,08,93,793

2. In support of the above, the assessee has provided supporting documents to your goodself, the details are as under Bank Statements of all Bank Accounts: Refer Page No. 4 to 21 of Paper Book Ledger of the assessee with India Nivesh Commodities Private Limited: Refer Page No. 22 to 23 of Paper Book 3. The assessee had made cash deposits in his bank account out of available cash in hand and had transferred the same in his Commodity a/c maintained with India Nivesh Commodities Private Limited in order to transact in commodities. At the time of settlement of the transaction, the assessee had obtained pay out the excess funds lying in his Commodity a/c to his bank account and the same was withdrawn by the assessee. During the relevant A.Y the assessee had made Total Cash Withdrawals of Rs.42,58,420/- Subsequently, the assessee had again made cash deposits in his bank account and transferred the funds to Commodity a/c in order to deal in commodities. Sir, as explained earlier, the assessee had deposited cash in his bank account and had transferred the same in his Commodity a/c and thereafter at the time of settlement he had obtained payout of excess funds lying in his Commodity a/c. Hence in order to complete one transaction, the assessee had two credit entries in his bank account le for Cash Deposit as well as for Payout obtained. In the Assessment Order passed by Ld. Assessing Officer, Ld. Assessing Officer had treated both the credit entries as part of Undisclosed Receipts. The assessee had made total cash deposits and cash withdrawals of Rs.39,46,200/- and Rs.42,58,420/- respectively during the year under consideration. From the above explanation, it is very much clear that the assessee had made deposits as well as withdrawals in his Bank account for inter transfer of funds between his Bank account and India Nivesh Commodities Private Limited. Sir, from the above explanation of rotation of funds, the nature and source of credit entries is fully explained and supported by proper documentary evidences. However, the Ld. Assessing Officer has made addition of 8% on entire credit transactions of Rs. 1,06,98,682/-which is totally unjustified. Therefore, you are requested to kindly delete the addition made by Ld. Assessing Officer on alleged undisclosed receipts of Rs.1,06,90,682/-and provide due relief to the assessee. Grounds of Appeal -

No. 3:- The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by not deleting the addition of Rs.8,55,895/-made on account of Presumptive Income of 8% on total deposits in bank accounts. Detailed Submission:

1. Sir, the assessee had already explained with submission to Ground of Appeal No. 2, the Rotation of Funds as well as nature of source of all credit entries in the bank accounts of the assesseo

2. Hence, keeping in view the same, total credit entries in the bank accounts of the assessee cannot be treated as Gross Receipts of the assessee and therefore there arises no question of addition of Rs.8,55,895/ made on account of Presumptive Income of 8% on total deposits in bank accounts as the assessee has fully disclosed his Income in the Income Tax Return filed by the assessee. Therefore, you are requested to kindly delete the addition made by Ld. Assessing Officer of Rs.8,55,895/- made on account of Presumptive Income of 8% on total deposits in bank accounts and provide due relief to the assessee.’’ 2.3 On the other hand, the ld. DR supported the order of the ld CIT(A) and submitted that the various notices were issued by the ld. CIT(A) as mentioned in his order and the assessee had not filed the written submission which is clear disregard of the notices issued by the ld. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that as per information available with the Department, the assessee had deposited cash of Rs.13,70,300/- in his saving bank account maintained with State Bank of India, Diggi Bazar Branch, Ajmer and also deposited cash of Rs.s34,60,000/- in his HDFC saving bank account. It is noticed by the AO that the assessee has also dealt in commodity exchange during the year under consideration and it is mandatory required from the assessee to file his return of income under the provision of Section 139(1) but the assessee had not filed the return of income. A formal letter was issued by the Department to the assessee on 08-01-2019 for making compliance on 16-01-2019. Thereafter, a notice u/s 148 of the Act was issued to the assessee on 25-03-2019 and duly served upon him through speed post. In response thereto, the assessee filed return of income on 26- 04-2019 declaring taxable income of Rs.1,95,180/-. From the records, it is noticed that the details of income declared by the assessee in his return of income is as under:-

Particulars Amount Income from commodities derivates business 1,11,111 Income from salary 84,000 Income from saving bank interest 67 Total income 1,95,180 It is noted from the records that the assessee had turnover of Rs.44,91,404/- from business commodity as the sum of positive and negative differences between the sales value and purchase value which is as follows: Particulars Amount Positive difference 23,01,257 Negative difference 21,90,147 Total turnover 4,91,404 The summary of total deposits of Rs.1,08,93,793/- in all bank accounts of the assessee are as under:- Particulars Amount of deposits (in Rs. T/f from India Nivesh Commodities Pvt Ltd. 53,33,942 Cash deposit 39,43,500 SB interest 1,900 ATM withdrawals Reversal 20,000 Other clearing Receipts (non cash) 15,94,451 Total 1,08,93,793 Further, it is noted that the AO added an amount of Rs.8,55,895/- to the total income of the assessee @ 8% of Rs.1,06,98,682/- whose calculation is as under:-

Particulars Amount of deposits (in Rs. Total of credit entries 1,08,93,793 Less: Income declared in ITR – Salary Income (84,000) Business Income (1,11,111) Total 1,06,98,682/- Thus being aggrieved by the order of the AO, the assessee preferred an appeal before the ld CIT(A) who dismissed the appeal of the assessee in limine for non- prosecution. During the course of hearing, the main thrust made by the ld. AR of the assessee was that the ld.CIT(A) should have decided the appeal of the assessee on merit instead of non-prosecution of appeal by the assessee. From the entire conspectus of the case and the submissions made above, 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 and the matter is restored to the file of the ld. CIT(A) to decide it afresh by providing one more opportunity of hearing. The ld. AR of the assessee is also directed to produce all the relevant records before the ld. CIT(A) to resolve the issue in question and 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.