PINTU TILLANI,BURHANPUR vs. INCOME TAX OFFICER, BURHANPUR, BURHANPUR

आदेश / O R D E R

Per Paresh M Joshi, J.M.:

This is an appeal filed by the Assessee Under Section 253 of

the Income Tax Act, 1961 (hereinafter referred to as the “Act” for

sake of brevity) before this Tribunal as and by way second

appeal. The assessee is aggrieved by order bearing Number

ITBA/NFAC/S/ 250/2023-24/1060873597(1) dated 13.02.2024

of Ld. CIT(A), passed U/s 250 of the Act which is hereinafter

referred to as the “impugned order”. The relevant Assessment Page 1 of 14

Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 Year is 2017-18 and the corresponding previous year period is

from 01.04.2016 to 31.03.2017.

2.1 That the assessee filed return of income electronically

declaring total income of Rs.81,870/-.

2.2 That the case of the assessee was selected for scrutiny and

that notice u/s 143(2) was issued on 16.08.2018. It was a case of

limited scrutiny and the solitary issue identified for scrutiny

examination was “cash deposited during the year”. (page 21 of

PB).

2.3 That subsequently a notice u/s 142(1) was issued on

04.06.2019 in which the preliminary information and final

accounts of the assessee were called for. In response to this

notice, one Shri Bhupendra Shroff, CA attended the assessment

proceedings and filed part reply which was placed on record.

2.4 That thereafter once again a notice u/s 142(1) was issued

on 19.08.2019 in which Ld. AO called for some specific

information and so also called upon the assessee to produce

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 complete set of book of accounts. The assessee however did not

attend the proceedings nor any submission was filed.

2.5 That thereafter once again a notice u/s 142(1) was issued

to the assessee on 06.12.2019 in which it was clearly and

expressly stated that the assessee has not been making any

compliance to the notices hence the assessee was called upon

as to why the assessment should not be completed as per the

provision of section 144 of the Act even then this notice was

not complied by the assessee under these tiring facts and the

circumstances of the case, the Ld. AO was left with no other

option but to proceed u/s 144 of the Act.

2.6 That the assessee is engaged in the business of Gukta and

PANMASALA trading under the name and style of M/s Prince

Enterprises.

2.7 The Ld. AO assessed the total income of the assessee as

under captionwise:-

(1) Unexplained unsecured loan u/s 68:

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 The Ld. AO noticed in the balance sheet and tax audit

report that the assessee had accepted loan of

Rs.10,00,000/- from one Shri Vijay Tillani, and despite

opportunity to establish identity, genuineness and

creditworthiness no explanation was offered by the assessee

nor any document in support of unsecured loan of Rs.10

lakhs were ever furnished accordingly the same were held

as unexplained by the Ld. AO, as unexplained cash credit

and added to the total income of the assessee r.w.s 115BBE

of the Act.

(2) Unexplained Sundry Creditors:

That the balance sheet of the assesee showed and reflected

outstanding creditors for the aggregate amount of

Rs.6,68,100/- in the name of “Vishnu Pouch Packaging P.

Ltd.” (Rs.1,03,020/-) and “Vishnu Tobacco Product”

(Rs.5,65,080/-). Despite opportunity by Ld. AO to the

assessee to furnish duly confirmed copy of his account- in

the books of “Vishnu Pouch Packaging P. Ltd.” and ‘Vishnu

Tobacco Product” no such confirmation copy of his account

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 in the books of creditors was produced/shown to Ld. AO

despite opportunity leading to unexplanation. The Ld. AO

was therefore, left with no other option but to add aggregate

amount of Rs.6,68,100/- to the total income of the assessee

by treating the same as unexplained.

(3) Undisclosed Cash Credited in Capital Account-

The Ld. AO basis capital account of the assessee in his

propitiatory concern noticed that the ‘capital account’ was

credited by Rs.17,20,000/- on account of “Cash declared

(under PMGKY 2016). It was further observed that this

account was debited by Rs.8,58,280/- under “It paid under

IDS(PMGKY 2016)” however no fixed deposit was made

under this scheme, was appearing in balance sheet of the

assessee. That the assessee failed to file the evidence i.e.

FDR under the “Income declaration scheme” and by

considering the fact that the assessee himself admitted

his undisclosed cash to the tax of Rs.17,20,000/-

declared under the scheme without furnishing any better

and material particulars, the Ld. AO despite opportunity

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 was left with no other option but to treat the same as

unexplained & added Rs.17,20,000/- to the income of the

assessee.

(4) Unexplained Cash deposits during demonitization

Period:-

There was deposit of Rs.52,97,500/- in specified bank

notes (total cash aggregating to Rs.77,07,500/-. No

explanation offered despite opportunity since assessee had

declared Rs.17,20,000/- under “income declaration

scheme” on account of unexplained cash balance cash of

Rs.35,77,500/- was considered unexplained and added to

the income of the assessee (Rs.52,97,500-Rs.17,20,000).

2.8 The Ld. AO in his assessment order had given number of

opportunity to the assessee to given explanation but assessee

offered no explanation and therefore, Ld. AO in exercise of power

conferred upon him by virtue of section 144 of the Act carried out

best judgment assessment and computed total income of the

assessee as Rs.70,47,470/- u/s 68 r.w.s 115BBE of the Act. That

the assessment order of Ld. AO bears number :

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 ITBA/AST/S/144/2019-20/1022157979(1) and same is dated

11/12/2019 which is hereinafter referred to as the “Impugned

Assessment Order”.

2.9 That the assessee being aggrieved by the “Impugned

Assessment Order” prefers first Appeal u/s 246A of the Act before

Ld. CIT(A) and the Ld. CIT(A) by the “Impugned Order” has

dimissed the appeal of the assessee on the grounds specified

therein.

2.10 That the assessee being aggrieved by the “Impugned

Order” has filed the present appeal before us on the following

grounds which are specified in form no.36 which are as under

including additional grounds:-

“1. That, the learned CIT(A) as well as the Id. AO grossly erred, both on facts and in law, in passing the ex-parte orders without giving proper and effective opportunity of being heard to the appellant. 2. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for determining the income of the appellant at Rs.70,47,470/- as against the returned income of Rs.81,870/- for the relevant assessment year by framing an Assessment Order under s. 144 of the Income-Tax Act, 1961, without affording proper opportunity of being heard to the appellant, which is quite illegal, bad-in-law and void-ab-initio. 3. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the Id. AO for making an addition of Rs.10,00,000/-, by invoking the provisions

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 of s. 68 of the Act, on the allegation of unexplained unsecured loans appearing in the audited financial statements of the appellant. 4. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the Id. AO for making an addition of Rs.6,68,100/- in the appellant's income, by invoking the provisions of s. 68 of the Act, on the allegation of unexplained sundry creditors appearing in the audited financial statements of the appellant. 5. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the Id. AO for making an addition of Rs.17,20,000/- in the appellant's income, by invoking the provisions of s. 68 of the Act, on the allegation of unexplained cash introduced in the Capital Account. 6. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the Id. AO for making an addition of Rs.35,77,500/- in the appellant's income, by invoking the provisions of s. 68 of the Act, on the allegation of unexplained cash deposits in bank account during the demonetization period. 7. That, the appellant further craves leave to add, alter or amend the foregoing ground of appeal as and when considered necessary.” Additonal Grounds: 1. "That, the learned CIT(A) grossly erred in confirming the action of the learned AO in converting the limited scrutiny case of the appellant, impliedly, into complete scrutiny without obtaining the necessary approval from the concerning Pr. CIT and without intimating such fact to the appellant." 2(a). "That, the learned CIT(A) grossly erred in confirming the addition of Rs.10,00,000/- made by the AO in the appellant's income on the allegation of unexplained unsecured loans by invoking the provisions of s. 68 of the Act without properly considering and appreciating the material fact that the case of the appellant was selected for scrutiny for limited purpose of verifying the cash deposits in bank accounts and without first converting the case into complete scrutiny, no addition could have been made in the hands of the appellant on any other ground." 2(b). "That, the learned CIT(A) grossly erred in confirming the addition of Rs.6,68,100/- made by the AO in the appellant's income on the allegation of unexplained sundry creditors by invoking the provisions

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 of s. 68 of the Act without properly considering and appreciating the material fact that the case of the appellant was selected for scrutiny for limited purpose of verifying the cash deposits in bank accounts and without first converting the case into complete scrutiny, no addition could have been made in the hands of the appellant on any other ground." 2(c). "That, the learned CIT(A) grossly erred in confirming the addition of Rs.17,20,000/- måde by the AO in the appellant's income on the allegation of unexplained cash introduced in proprietor's capital account by invoking the provisions of s. 68 of the Act without properly considering and appreciating the material fact that the case of the appellant was selected for scrutiny for limited purpose of verifying the cash deposits in bank accounts and without first converting the case into complete scrutiny, no addition could have been made in the hands of the appellant on any other ground."

3.1 That the hearing in the matter took place before this

Tribunal on 24.03.2025 when Ld. AR for and on behalf of the

assessee appeared before us and interalia bought to our notice

application dated 3.01.2025 filed in terms and Rule 11 of the

Income tax Tribunal Rules 1963 to raise additional grounds &

also brought to our attention yet another application for being

additional evidence in terms of Rule 29 r.w.r. 18(4) of the Rules.

We then heard patiently Ld. AR on various issues which he

canvassed basis above two applications. Thereafter, we heard

Ld. DR for and on behalf of the revenue who interalia opposed

two applications (supra) and contended that since orders of lower

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 authorities i.e Ld. AO and Ld. CIT(A) are legal and proper no

application as and by way additional grounds and additional

evidence should be entertained by this Tribunal. Further all

required opportunities were given to the assessee. The sheet

anchor of argument of Ld. DR was that Impugned assessment

order of Ld. AO is well within the four corners of law. The Ld.

AO has correctly invoked section 144 of the Act which speaks

of best judgment assessment. The Ld. AR has failed to bring

out any concrete material that Ld. AO erroneously exercised

Power u/s 144. Further on 1st Appeal the Ld. CIT(A) in the

impugned order has rightly rejected the 1st Appeal of the assessee

by giving a detailed explanation on page 12 of his Impugned

order. The Ld. CIT(A) has rightly observed as under:_

“8. Adjudication and decision: On due consideration of the statement of facts and grounds of appeal with the observations of the AO in the assessment order, this order is passed. All the grounds relate to the lack of opportunity to present the case and the AO was in a hurry to pass an exparte assessment even though the time barring date permitted sufficient time to the AO to complete the assessment. Form 35 filed did not show any additional evidence to support the grounds taken assailing the additions made.

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 Under these circumstances, the grounds relating to the lack of opportunity of being heard is decided against the appellant for the reasons set out in the assessment order as under: The assessee filed his return of income electronically declaring total income of Rs. 81,870/-. The case was selected for scrutiny, hence notice u/s 143(2) was issued on 16.08.2018. Subsequently, notice u/s 142(1) was issued on 04.06.2019 in which preliminary information and final accounts of the assessee were called for. In response to this notice, Shri Bhupendra Shroff, CA attended and filed part reply which is placed on record. Thereafter, notice u/s 142(1) was issued on 19.08.2019 in which some specific information were called for and also asked to produce complete set of books of accounts. However, the assessee did not attend the proceedings, nor any submission was filed in response to this notice. Again, notice u/s 142(1) was issued on 06.12.2019, in which the assessee was clearly stated that he had not been making compliance to the notices, hence please explain as to why assessment should not be completed ex-parte as per the provisions of section 144 of the Income-tax Act. Even after this, the assessee did not make any compliance. In the light of the above, the assessment of the assessee is being completed u/s 144 of the Income-tax Act on merit of the case on the basis of information available on record. Decision: These grounds are dismissed for the appellant cannot dictate terms to the AO as to when he should complete the assessment and why he should not wait until the time barring date. On merits, the appellant did not raise any grounds and did not file any evidence towards the unsecured loans, sundry creditors, Cash Declared under PMGKY 2016 and Cash deposited during the demonetization period. Therefore, no interference is called for on the quantum addition made. In the result, the appeal is dismissed.”

3.2 Ld. AR then coming to the merits of the case inter alia

contended that in case of limited scrutiny it is not permissible for

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 revenue to enlarge the scope of scrutiny and in the instance

case Ld. AO ought to have restricted himself only to cash deposit

made during demonetization period and ought not to have

decided other issues/additions. Per contra Ld. DR for Revenue

brought to our attention that assessment was for scrutiny under

caption “cash deposit during the year” meaning thereby that

all the cash deposit for A.Y.2017-18 and entire computation of

income for the year under consideration falls under this broad

caption. The Ld. AR is speaking of cash deposit made during

demonetization only which fact is wrong and is not borne out of

records. Records of the case speaks of all gamuts of cash

transactions during the year under consideration including as

made out by Ld. AO in his Impugned assessment order. At the

end of hearing after much debates there was near unanimity that

the matter be remanded back to Ld. AO to re-look the entire

gamut of case afresh denovo basis.

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 4.1 We have to decide the legality, validity and proprietary of

the “impugned order” basis records of the case and the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard rival submissions minutely.

4.3 We are of the considered view that the assessee is making out

a totally new case before us which was not in existence either at

the original stage nor at 1st Appellate Stage. The assessee is

giving legal cover to his case by raising legal contentions when

admittedly both at original stage as well as at First Appellate

Stage he has remained totally non-compliant. Needless to state

law helps those who are diligent and vigilant and not negligent.

Law does not help those who sleep over on their rights. The

assessee admittedly was in slumber mode with regard to his

rights.

4.4 In the premises, we in order to meet ends of justice give

one last opportunity to assessee to present his case before Ld. AO

and direct assessee to cooperate with the department. Assessee

shall not seek any adjournment. Hence the impugned order is set

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Pintu Tillani ITA No. 321/Ind/2024 A.Y. 2017-18 aside and matter is remanded back to the file of Ld. AO to pass a

fresh order on denovo basis as and by way of exception due to

peculiar facts and circumstances of present case.

5.1 In result-Impugned order is set aside as and by way of

remand with directions as aforesaid.

5.2. In result, appeal is allowed for statistical purpose.

Order pronounced in open court on 26.03.2025.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक /Dated : 26/03/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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