ATUL BANSAL,INDORE vs. ADDITIONA, JOIN, DEPUTY, ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER NFAC DELHI, NATIONAL FACELESS ASSESSMENT CENTRE DELHI

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ITA 704/IND/2024Status: DisposedITAT Indore14 May 2025AY 2017-20187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the AO had rejected the assessee's explanation for the deposit due to a lack of evidence. Subsequently, the CIT(A) dismissed the assessee's appeal for non-prosecution without adjudicating on the merits. The assessee presented supporting evidence before the ITAT and requested a remand to the AO for fresh adjudication. The Tribunal found that restoring the case to the AO would not prejudice the revenue and would lead to a proper determination of the total income and tax liability. The Tribunal agreed to the assessee's prayer to restore the appeal to the AO, directing the AO to adjudicate the matter afresh after giving the assessee necessary opportunities and considering all submissions and evidence. The AO was instructed not to be influenced by his previous order. The assessee was also directed to ensure adequate participation before the AO. The issue of compliance with Section 250(6) was implicitly addressed by remanding the case for fresh adjudication on merits, which would necessitate a reasoned order from the AO. The specific merits of the sources of the deposit were not decided by the Tribunal but were remanded for the AO's consideration.

What were the facts?

The assessee, Atul Bansal, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Commissioner of Income-Tax (Appeals)-NFAC, Delhi, which upheld the assessment order passed by the National Faceless Assessment Centre (AO) under Section 147 read with Section 144 of the Income-tax Act, 1961, for Assessment Year 2017-18. The AO initiated reassessment proceedings based on information that the assessee had made a cash deposit of Rs. 14,00,000/- in his bank account on 08.11.2016, prior to purchasing a vehicle. The assessee claimed the deposit was from business receipts and the sale of a personal car. The AO rejected this claim for lack of evidence and added Rs. 14,00,000/- under Section 69A. The assessee's first appeal before the CIT(A) was dismissed for non-prosecution.

What were the issues?

1. Whether the order of the Commissioner (Appeals) disposing of the appeal is in compliance with the mandate of Section 250(6) of the Income-tax Act, 1961, which requires the order to be in writing and state the points for determination, the decision thereon, and the reasons for the decision, despite dismissing the appeal for non-prosecution. Assessee's contention: The Ld. AR argued that Section 250(6) mandates a reasoned order, and the CIT(A)'s dismissal for non-prosecution without adjudication on merits violates this provision, thus the impugned order deserves to be set aside. Revenue's contention: The Revenue did not have any objection to the submissions and prayer of the assessee. 2. Whether the addition of Rs. 14,00,000/- as unexplained money under Section 69A is justified, considering the assessee's explanation of the sources of the deposit. Assessee's contention: The Ld. AR submitted that Rs. 10,00,000/- was from business turnover/receipts of Rs. 96,58,540/- declared under Section 44AD, and the remaining Rs. 4,00,000/- was from the sale of an old personal car. Evidence for both sources, including customer PANs, Aadhar cards, affidavits, invoices, and car sale documents, were filed. The assessee also expressed willingness to cooperate fully with the AO for fresh adjudication. Revenue's contention: The Revenue did not have any objection to the submissions and prayer of the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69A,Section 143(1)(a),Section 250(6),Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Ms. Priyal Luhadiya, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 13.05.2025Pronounced: 14.05.2025

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

1.

Feeling aggrieved by order of first appeal dated 26.07.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 14.09.2021 passed by learned National Faceless Assessment Centre, Delhi [“AO”] u/s 147 r.w.s. 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds as mentioned in Appeal Memo (Form No. 36).

Page 1 of 7 – AY 2017-18 2. The background facts leading to present appeal are such that the assessee-individual filed his return of income of AY 2017-18 on 28.03.2018 declaring a total income of Rs. 8,21,960/- which was processed u/s 143(1)(a). Subsequently, the AO received an information from DDIT, Unit-II, Indore indicating that the assessee had purchased a vehicle during the financial year 2016-17 relevant to AY 2017-18 and before purchasing such vehicle, made a cash deposit of Rs. 14,00,000/- in bank a/c on 08.11.2016.

Accordingly, the AO made certain enquiries from assessee but in absence of any response from assessee, the AO ultimately took action u/s 147 through a notice u/s 148 dated 18.03.2020. During proceeding, the assessee filed reply dated 31.03.2021 as acknowledged by AO in Para 4 of assessment- order. In the reply so filed, the assessee claimed that the deposit of Rs. 14,00,000/- was made from two sources, namely (i) sale proceed/receipts of business, and (ii) sale of a personal old car. The AO, however, rejected claim of assessee by assigning the reason that the assessee has not filed any evidence/document. Ultimately, the AO made addition of Rs. 14,00,000/- u/s 69A treating the deposit as unexplained money. Aggrieved, the assessee carried matter in first-appeal but could not make compliances of notices issued by CIT(A). The CIT(A) dismissed assessee’s appeal in limine, vide Para 5 of impugned order, for the reason of non-prosecution. Still aggrieved, the assessee has come in next appeal before us.

Page 2 of 7 – AY 2017-18 3. Ld. AR for assessee at the outset submitted that the section 250(6) of the Income-tax Act, 1961 provides “The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.”. She submitted that in present case, the Ld. CIT(A) has dismissed assessee’s appeal although due to non-prosecution by assessee on the dates of hearing but still without complying with the mandate of section 250(6). Therefore, the impugned first appeal-order passed by Ld. CIT(A) deserves to be set aside.

4.

Having explained thus, Ld. AR went ahead to make submissions qua the sources of deposits available to assessee. In so far as the first source of business turnover/receipts having been deposited is concerned, Ld. AR drew us to Page 33 of Paper-Book where a business licence issued by Municipal Corporation of Indore to assessee to run a proprietorship concern named “M/s Bansal Real Estate & Building Material Supplier” is filed. Then, Ld. AR drew us to Page No. 19 to 21 of Paper-Book to show that the assessee has declared turnover/gross receipts of Rs. 96,58,540/- with net profit/taxable business income of Rs. 8,38,880/- u/s 44AD from this very business of “M/s Bansal Real Estate & Building Material Supplier” in the return of income filed to Income-tax Department (the net profit/taxable business income of Rs. 8,38,880/- is included in the total income of Rs. 8,21,960/- declared return of income). She submitted that out of such turnover/gross

Page 3 of 7 – AY 2017-18 receipts of business, the assessee made deposit of Rs. 10,00,000/- in bank a/c. She submitted that the assessee is having immunity from maintenance of books of accounts since he has declared income under presumptive scheme of section 44AD and that the turnover/gross receipts of business at Rs. 96,58,540/- declared by assessee is also manifold of the deposit of Rs.

10,00,000/-. Therefore, in the situation, the assessee cannot and should not be asked to explain the source of Rs. 10,00,000/- deposited in bank a/c by utilizing turnover of business. Without prejudice, Ld. AR submitted, the assessee has still filed evidences of cash received from customers towards sales invoices of business, for the sake of satisfaction of authorities. Such evidences are in the shape of (i) PAN cards of customers, (ii) Aadhar cards of customers, (iii) Affidavits of customers, and (iv) Invoices issued by assessee to customers, filed at Pages 39-51 of Paper-Book.

5.

Then, Ld. AR explained the second source of sale of old personal car.

She submitted that the assessee sold car to Shri Bharat Tiwari and the documents in the shape of (i) R/C of old card owned by assessee, (ii) PAN Card of buyer, (iii) Aadhar card of buyer, and (iv) Affidavit of buyer, are submitted at Pages 35-38 of Paper-Book.

6.

Ld. AR has also filed following Written-Submission and prays for remanding this case back to the file of AO while acknowledging in Para 2 thereof that the assessee is willing to co-operate fully in the proceedings before AO:

Page 4 of 7 – AY 2017-18

7.

Ld. DR for revenue does not have any objection to the submission and prayer of assessee/Ld. AR.

Page 5 of 7 – AY 2017-18 8. We have considered submissions of both sides and perused the case record. We find that during assessment-proceeding, when the AO asked assessee to explain the source of deposit of Rs. 14,00,000/- made in bank a/c, the assessee explained two sources, namely (i) the turnover/business receipts of business, and (ii) sale proceed of a personal car. However, the AO rejected asesssee’s submission for want of evidences. Thereafter, during first-appeal, the assessee could not attend the hearings which led the CIT(A) to dismiss assessee’s appeal in limine without adjudication on merit. Now, the assessee has filed supporting evidences before us as discussed above and requesting to remand this matter to the file of AO for adjudication afresh on merit. The assessee is showing strong willingness to make representation before AO. The Ld. DR for revenue is also fair enough in not objecting to the submission/prayer of assessee. We also find that if the case is restored at the level of AO, there would be no prejudice to revenue instead there would be a proper determination of total income and tax liability in accordance with law. Being so, we agree to the prayer made by Ld. AR to restore this appeal back to the file of AO. The AO shall adjudicate this matter afresh after giving necessary opportunities to assessee and after considering assessee’s all submissions including the evidences filed as above.

In doing so, the AO shall not be influenced by his previous order in any manner. The assessee is also directed to ensure adequate participation before AO failing which the AO shall be entitled to pass order as he thinks fit in accordance with law.

Page 6 of 7 – AY 2017-18 9. Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 14/05/2025

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