INCOME TAX OFFICER WARD 4(3), NAGPUR vs. NARESH NARAYANDAS RAMRAKHYANI, NAGPUR

Sr. Date of hearing(s) no. 1. 21/08/2023 2. 09/08/2024 3. 22/08/2024 4. 30/08/2024 5. 06/09/2024 01/10/2024 6. (final opportunity)

4.2 Against all these notices, there was no response from the assessee. A final opportunity i.e. show-cause notice was issued on 24.09.2024 and the appellant was informed that if no reply is received on or before 01.10.2024, the appeal would be disposed of based on the materials available on record. The appellant has not responded to the hearing posted. Despite providing numerous opportunities, the appellant did not file his submission. As has been brought out above, sufficient time is allowed to the appellant to submit the response online. However, it is evident that the appellant has not availed any of the opportunities of being heard under the principle of natural justice and 3 Naresh Narayandas Ramrakhyani ITA no.632–633/Nag./2024 also was not interested in filing any details during the appellate proceedings in support of his claim. In response to the notices issued, the assessee has not furnished any submissions in support of his claim, to prove why the addition made by the Assessing Officer should not be sustained. In such a situation, the only conclusion which can be drawn is that the appellant is not interested in pursuing the appeal. 4.3. It has been held by the Hon'ble Supreme Court in the case of B.N. Bhattacharjee and Another (118 ITR 461) (at pages 477 & 478) that appeal does not mean merely filing of memo of appeal but also pursuing it effectively. In cases where the appellant does not want to pursue the appeal, appellate authorities have inherent power to dismiss the appeal for non-prosecution as held by the Hon'ble Bombay High Court in the case of M/s Chemipol vs. Union of India in Excise Appeal No. 62 of 2009. 4.4. This appeal has been filed by the appellant claiming that the action of the Assessing Officer is not supported by facts and laws and that it is unjust. In such a situation, it is for the appellant to furnish submissions with relevant evidence(s), case laws, if any, to support the claim. The 'burden of proof is always on the person who makes the claim. In this case, it is the appellant who has made the claim by filing the appeal. Thus, in cases where a particular receipt is sought to be taxed as income, the initial onus is on the Assessing Officer to prove that it is taxable. Where, however, the assessee claims exemption, the burden is on the assessee to prove it to be exempt. Same is the position in case of all allowances, deductions, claims or loss, etc. Since an appeal is nothing, but the claim of the appellant that he has been unduly unjustifiably taxed, it is for the appellant to prove its case. The appellant has not availed any opportunity to do so. 4.5 From the conduct of the appellant, as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal. Even otherwise, on merits also, I do not see any reason to differ with the findings of the AO. The AO was in receipt of information that the appellant had made cash deposits in his bank account to the tune of Rs.1,92,98,275/- during the FY 2014-15. During the assessment proceedings, the appellant failed to furnish details regarding the source of cash deposits despite being provided various opportunities by the AO. The appellant has not furnished any documentary evidence either during the assessment proceedings as well as during the present appeal proceedings. However, the appellant stated that the assessment was completed without giving any proper opportunity of hearing. Therefore, in the interest of fairness and justice, the AO is directed to verify the cash/credit entries made in Current bank account of the appellant and find out who has deposited Cash and who is the owner of the cash deposited. The AO is also directed to verify the withdrawals made by the appellant and the destination of the same into any asset. In case it is proved that the appellant is a "benamidar" of any other person necessary legal action may be taken by the AO after conducting due factual enquiries. In case, the appellant remains non-cooperative during these proceedings also, the AO may proceed to treat the cash deposits as unexplained as per law and determine the tax demand applying the correct rates of tax. 4.6 The AO may follow the line of action as described below:

4 Naresh Narayandas Ramrakhyani ITA no.632–633/Nag./2024 a) The AO is directed to delve into the nature of business of the appellant to see whether the operations of the business are carried out in cash or he is capable of generating that much of cash through his business activities by calling bank account statements. b) To verify the source for cash deposits alongwith counterfoils of cash deposits made. c) Once again verify the KYC documents and application form of the applicatnt while opening the bank account. d) Details of cash withdrawals alongwith counterfoils and cash withdrawals slip of AY 15-16 & 18-19. e) The AO also may verify details of loan obtained by the appellant in his name or in the name family members in the above mentioned bank. 1) The AO may verify the locker facility availed by the appellant or his family members in the above mentioned bank. g) The AO may verify the immovable properties held by the appellant provided as collateral security for any loan obtained. h) The AO may verify whether Mr. Naresh Shivlal Rajai, Resident of Savitri Nivas, Behind Janta Hall, Chaproo Nagar, Hanuman Chowk, Nagpur-440008, Director of Kingfisher Forex Pvt Ltd having PAN AADCK7939A is having bank account in M/s Mangaldeep Multi State Urban Co-operative Society Ltd. i) The AO also may verify any FIR lodged in this matter or not. j) The AO may also examine if the appellant is in the business of unaccounted money lending. k) The AO is directed to verify all the credit entries into the bank account and examine the cash trail as well as credit trail. 1) While doing the above scrutiny the AO is directed to attach the properties of the appellant or any person connected to this scrutiny proceedings to enforce compliance following the due procedure laid down in the Income Tax Act, 1961. m) If the appellant is found to be the "benamidar" of Mr. Naresh Shivlal Rajai or any other person the same may be informed to the Benami Unit of the Department. n) If there is complete non-cooperation by the appellant, the non-cooperation may be recorded in detail in the record along with documentary evidence collected from the above bank. O) Similarly, after conducting third party enquiry, the collected details may be furnished to the corresponding AO for taking further necessary action in the case of Mr. Naresh Shivlal Rajai or any other person involved.

5 Naresh Narayandas Ramrakhyani ITA no.632–633/Nag./2024 4.7 Thus, the case of the appellant is set aside to the file of the AO for de- novo consideration. 5. In the result, the appeal is allowed for statistical purposes.”

6 Naresh Narayandas Ramrakhyani ITA no.632–633/Nag./2024 satisfied that the assessee has concealed its true particulars of Income and the penalty u/s 271AAC is initiated separately in this case. 4.7 However, a perusal of the trading account of the appellant demonstrates that the appellant has made cash sales of Rs.23,12,02,480/- and cash purchase of Rs.22,68,13,026/-. The opening stock and the closing stock of the appellant is also clearly available. Therefore, in the interest of fairness and justice, the AO is directed to verify the cash/credit entries made in bank account of the appellant. The AO is also directed to verify the credits made into the bank account by cash or otherwise and also verify the withdrawals made by the appellant and the destination of the same. In order to ensure compliance by the appellant, the Assessing Officer is directed to provisionally attach the properties of the appellant or his family members. In view of the above findings and directions, the appeal is set aside to the file of the Assessing Officer for de-novo consideration.

5. The direction of the learned CIT(A) are flawed and superfluous, because the Assessing Officer has made the addition as the assessee failed to discharge its onus. The assessee cannot be permitted to improve his cases by permitting a second innings. Moreover, the assessment orders having not been revised under section 263 of the Act cannot be held to be lacking on the aspect of enquiry. The impugned orders passed by the learned CIT(A) for both the years under consideration are set aside and the assessment orders passed by the Assessing Officer for A.Y. 2015–16 and 2018–19 are hereby restored. Accordingly, all the grounds raised by the Revenue in the years under consideration are allowed.