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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 06.08.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 09.12.2019 passed by learned ITO-4(1), Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
Page 1 of 8 the assessee’s case was selected for limited scrutiny with the reason that large cash deposits in bank a/cs were made by assessee during the previous year 2016-17 relevant to AY 2017-18 under consideration. The AO issued notices u/s 143(2)/142(1) to assessee but the assessee was not able to make compliances. Therefore, the AO completed ex-parte assessment u/s 144 year after making an addition of Rs. 1,23,12,389/- [total amount of deposits in bank a/cs at Rs. 2,00,09,000 (-) the business turnover of assessee declared in return of income at Rs. 76,96,611] u/s 69A on account of unexplained money. Thereafter, Ld. AR draws us to the impugned order of first-appeal passed by CIT(A) to demonstrate that the assessee filed additional evidences to CIT(A) in terms of Rule 46A of Income-tax Rules, 1962 on which the CIT(A) sought remand-report from AO. In remand report, the AO made objection against admissibility of additional evidences without giving any comments on merit of the evidences. The CIT(A), taking into account the objection raised by AO, rejected assessee’s additional evidences.
Ultimately, the CIT(A) upheld the addition of Rs. 1,23,12,389/- made by AO and dismissed assessee’s appeal.
Ld. AR next invited our attention to the following affidavit filed by assessee explaining the reason of non-compliances before AO:
Page 4 of 8 assessee, who was dealing case before AO, was suffering from cancer and that is the only reason of occurrence of non-compliances before AO.
However, during proceeding of first-appeal before CIT(A), the assessee appointed new counsel M/s Harish Khandelwal & Co., who prepared assessee’s case and filed additional evidences but the CIT(A) rejected assessee’s evidences taking into account the objection raised by AO.
Ld. AR next submitted that the assessee has filed an application under Rule 29 of ITAT Rules, 1963 for admission of additional evidences.
Further, the evidences are filed in a separate Paper-Book under following index:
Page 6 of 8 Rs. 2,00,09,000/- as unexplained deposits and given credit of turnover of Rs.
76,96,611/- as disclosed in assessee’s return but the deposits of Rs. 2,00,09,000/- consisted of deposits in cash + deposits in cheques and not only the deposits of business turnover but also other transactions of loans received, etc. in bank a/c. Therefore, the addition made by AO is patently wrong. Ld. AR submitted that the additional evidences filed by assessee are contemporary and sufficient enough to explain the deposits in bank a/cs and the assessee is ready to substantiate all deposits with the evidences and further information/document as the AO may require. Therefore, Ld. AR prays that an opportunity be given to assessee in the interest of justice and the present matter should be remanded to AO for adjudication afresh.
Ld. DR for revenue was fair enough in accepting the circumstances explained by assessee and agrees with the prayer of Ld. AR to remand this matter to the file of AO but, however, makes a request to direct the assessee to represent his case before AO without seeking unnecessary adjournments and also impose a suitable cost upon assessee in order to offset the wastage of revenue’s resources and also to make the assessee obedient to law.
We have considered the submissions of both sides and carefully perused the orders of lower-authorities. We have already noted the precise facts in earlier paras. After a careful consideration of facts; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of Page 7 of 8 AO, we remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee and subject to the condition that the assessee shall pay a cost of Rs. 5,000/- to ‘Prime Minister National Relief Fund’ and submit proof to AO. Needless to mention that the AO shall give necessary opportunity of hearing to assessee and pass appropriate orders uninfluenced by his earlier orders. The assessee is also directed to remain vigilant and ensure participation in the hearings fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate orders in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.