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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 25.06.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 28.09.2019 passed by learned ITO, Raisen u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on following grounds:
Page 1 of 8 “1. On the facts and circumstances of the case and in law, the AO grossly erred in making and the CIT(A) grossly erred in confirming the addition of Rs. 26,98,100/- under section 69A of the Income Tax Act, 1961 (hereinafter referred to as "Act") ignoring the fact that the nature and source of the amount so deposited in bank account is duly explained and the said amount cannot be treated as unexplained as wrongly assessed by AO and further wrongly confirmed by CIT(A). The addition of Rs. 26,98,100/- under section 69A is grossly illegal and deserves to be deleted as per law and in the interest of justice.
On the facts and circumstances of the case and in law, the addition made in 69A is grossly illegal and deserves to be deleted as per law and in the interest of justice.
The Appellant denies liability to be assessed to tax under section 115BBE as charged.
4. The Appellant denies liability to be assessed to interest under section 234A of the Act as charged. Without prejudice, the levy of interest is unjustified, unwarranted, and excessive.
5. The Appellant craves leave to add, amend, alter, vary, and / or withdraw the above ground of appeal
with the kind permission of the Hon'ble Tribunal.”
2. The assessee in this case is “Shri Madan Mohan Jhawar” who has deceased and the assessee’s daughter “Priya Gilda” has filed present appeal in the capacity as Legal Heir. Accordingly, the case title is “Late Shri Madan Mohan Jhawar Through Legal Heir - Priya Gilda”.
3. The background facts leading to present appeal are such that the assessee-individual did not file return of income for AY 2017-18. The ITO, Ward-1, Chindwara, on the basis of information available in Insight Portal of Income-tax Department regarding cash deposits of Rs. 26,98,100/- made by assessee in Bank A/c during the demonetization period (09/11/2016 to 30/12/2016) falling within AY 2017-18, issued notice dated 13.12.2017 u/s Page 2 of 8 142(1) calling the assessee to furnish return but the assessee did not comply with notice. Thereafter, the case of assessee was transferred to ITO, Raisen [“AO”] on 01.08.2019. The AO issued show-cause notice dated 02.09.2019 to assessee proposing for completion of assessment ex-parte u/s 144 on the basis of material available on record. The AO also issued a notice u/s 142(1) calling various details from assessee as well as explanation qua the source of deposits. These notices issued by AO also remained uncompiled by assessee. Ultimately, finding no response from assessee, the AO completed assessment to the best of his judgement treating the deposits of Rs. 26,98,100/- as unexplained money u/s 69A and thereby assessing total income at Rs. 26,98,100/-. Aggrieved, the assessee carried matter in first-appeal but did not get any success. Now, the assessee has come in next appeal before us challenging the orders of lower-authorities.
We have heard learned Representatives of both sides and carefully perused the orders of lower-authorities as well as the documents filed in Paper-Book to which our attention has been drawn.
We find that the AO has passed assessment-order ex-parte u/s 144 due to non-compliances of various statutory notices issued to assessee. The AO has treated the deposits in bank a/c as unexplained money u/s 69A
Page 3 of 8 since no detail/document was filed by assessee explaining the source of deposits. During first-appeal, the assessee filed a reply to CIT(A), copy of same is filed at Pages 15-17 of Paper-Book and the same is also re-produced verbatim by CIT(A) in Para 5 of impugned order; we refrain to re-produce the same for the sake of brevity. Suffice it to mention that in the reply so filed, the assessee submitted that the impugned deposits in bank a/c were made from two sources, namely (i) cash of Rs. 24,22,346/- withdrawn from KCC A/c maintained for agricultural activity was re-deposited, and (ii) the cash receipt of Rs. 8,99,656/- generated from sale of crop was utilized. The assessee filed supporting documents in the shape of (i) statement of Bank A/c No. 03470100000005 maintained with UCo Bank from which the impugned cash-withdrawals were made and (ii) copies of payment-vouchers issued by Krishi Upaj Mandi Samiti, Bareli through which the sale-proceed of crop was received. Copies of these documents are also filed at Pages 18- 22 of Paper-Book to which our attention is drawn during hearing. Since the assessee did not make any representation to AO during assessment- proceedings but filed submission/documents for the first time before CIT(A), the CIT(A) forwarded assessee’s documents to AO seeking remand-report.
The AO submitted remand-report dated 24.05.2024 which is re-produced by CIT(A) in Para 6 of impugned order. In Remand-Report, the AO made certain
Page 4 of 8 adverse comments qua the documents filed by assessee and therefore the CIT(A) issued notices dated 27.05.2024 & 20.06.2024 asking the assessee to furnish reply, if any, in the light of Remand-Report but the assessee failed to respond to those notices issued by CIT(A) [Para 7 of impugned order of CIT(A)]. Therefore, the CIT(A) dismissed assessee’s appeal without granting any relief by concluding thus in Para 9 and 10 of impugned order:
“9. Decisions: By the ground (only one) filed in the Form No. 35, the appellant has objected to invoking of provisions of section 69A and treating entire cash deposit as unexplained money. In this regard, the submission / additional evidences, made by the appellant before the Faceless Appeal i.e. NFAC, the remand report was called for from the Assessing Officer. The findings, submitted by the AO through the remand report dated 24/05/2024, are as under: "It is pertinent to mention here that the credit limit is only Rs.5,66,000/- during the F.Y. 2016-17. Therefore, the claim of the assessee that he has withdrawn Rs. 24,22,346/- from KCC account on the following date 02/02/2016, 14/01/2016 and 17/09/2015 out of the KCC does not appear to be tenable. Further, the assessee has not submitted the expense related to agriculture activities, Documentary proof of expense like labour, seeds, pesticide, electricity bills for irrigation purpose. The assessee has not produced any document from PARTWARI regarding the agricultural produce". Under the facts and remand report submitted by the AO, the amount of Rs. 26,98,100/- was correctly added u/s 69A of the Act to which provisions of section 115BBE are squarely applicable. During the appellate proceedings, vide notice dated 27/05/2024 & 20/06/2024 with the attachment of Remand Report dated 24/05/2024, the appellant was given another opportunity to furnish his comments or contentions in the light of the said remand report and by which the appellant was to respond by 25/06/2024 [11:30 A.M.]. The very fact that the appellant did not respond to any of the two notices dated 27/05/2024 & 20/06/2024 by which the appellant was requested to offer his comments or make further submission, leads to the presumption that the appellant is not keen on pursuing his Page 5 of 8 appeal. Accordingly, the conclusion arrived at by the Assessing Officer in the Remand Report is treated as correct. Under these circumstances, I conclude that the appellant is not serious to pursue the appeal and therefore the current appeal is dismissed and the action of the AO is confirmed.
In the result, the appeal is dismissed. [Emphasis supplied] 6. Ld. AR for assessee carried us to the submissions/documents filed by assessee to CIT(A) and attempted to convince that the submission/ documents of assessee are self-sufficient to explain the sources of impugned deposits made in bank a/c and taking into account the same, the addition made by AO must be deleted.
Per contra, Ld. DR for revenue made a strong opposition to the submission of Ld. AR. He submitted that firstly the AO had to pass ex-parte assessment-order because the assessee remained non-compliant to all notices including final show-cause notice issued by AO. He submitted that the assessee did not provide any detail/document to AO qua the source of deposits made in bank a/c. Secondly, he submitted that when the AO found certain infirmities/adverse points in the submission/documents filed by assessee before CIT(A) and informed those infirmities/adverse points in Remand-Report and thereafter the CIT(A) afforded opportunity to assessee to counter the Remand-Report, even at that stage the assessee did not turn up.
Page 6 of 8 Therefore, in the situation, the assessee/Ld. AR cannot claim before ITAT for deletion of addition. Ld. DR submitted that in such a situation when the assessee has not availed the opportunity to counter the Remand-Report filed by AO, the matter can be re-stored at the level of CIT(A) in the interest of justice. But since the assessment-order itself is ex-parte u/s 144 and the adverse remarks made by AO in Remand-Report have to be resolved ultimately at the level of AO, it would be better to restore this matter to the file of AO for a proper examination and adjudication. Ld. DR submitted that he would have no objection if the case is restored at the level of AO.
In rejoinder, Ld. AR for assessee submitted that he would also have no objection if the case is remanded to the file of AO.
In view of above submissions of parties and having regard to the facts of case, we deem it fit to remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
10. Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 28/04/2025