PUJA KHANDELWAL,KOLKATA vs. I.T.O.,WARD-31(1), KOLKATA

The assessee in the present case is an individual, who filed her return of income for the year under consideration on 18.03.2011 declaring total income of Rs.1,37,964/-. The said return was initially processed by the Assessing Officer under section 143(1) of the Act on 22.06.2011. The assessment, however, was subsequently reopened by the Assessing Officer and a notice under section 148 was issued by him after recording the reasons. In reply, a letter was filed by the assessee stating therein that the return originally filed by her on 18.03.2011 may be treated as the return filed in response to notice under section 148. During the course of assessment proceedings, the assessee was called Assessment Year: 2010-2011 Puja Khandelwal upon by the Assessing Officer to explain the cash deposits of Rs.29,71,405/- and cheque deposits of Rs.4,46,473/- found to be made in her Bank account maintained with Punjab National Bank during the year under consideration, which were not accounted for. In reply, it was submitted by the assessee that the said deposits represented sale proceeds of cotton waste sales. In the absence of any evidence filed by the assessee in the form of bills etc. to support and substantiate the said explanation, the Assessing Officer did not accept the same. He issued a notice requiring the assessee to show-cause as to why peak credit appearing in his undisclosed Bank account should not be treated as unexplained cash credit and an addition to that extent be made under section 68. In reply, it was submitted on behalf of the assessee that her income may be assessed by applying a net profit rate of 8% to the total deposits made in the Bank account with Punjab National Bank by treating the same as business turnover as per section 44AD of the Act. Alternatively it was also submitted on behalf of the assessee that even by the peak credit formula, the addition could not be made exceeding Rs.5,00,000/-.Keeping in view this submission made on behalf of the assessee, the Assessing Officer treated the peak credit of Rs.5,00,000/- appearing in the undisclosed Bank account of the assessee with Punjab National Bank as unexplained cash credit and an addition to that extent was made by him under section 68 to the total income of the assessee in the assessment completed under section 143(3)/147 of the Act vide an order dated 26.12.2017.

Against the order passed by the Assessing Officer under section 143(3)/147 of the Act, an appeal was preferred by the assessee before the ld. CIT(Appeals) challenging the addition of Rs.5,00,000/- made by the Assessing Officer to her total income under section 68. There was, however, no satisfactory compliance on the part of the assessee to the notices issued by the ld. CIT(Appeals) fixing the said appeal for hearing from time to time and keeping in view the same, the ld. CIT(Appeals)

I have heard the arguments of both the sides and also perused the relevant material available on record. In support of the preliminary issue raised by the assessee in this appeal challenging the impugned order passed by the ld. CIT(Appeals) ex-parte dismissing the appeal of the assessee for non-prosecution, the ld. Counsel for the assessee has submitted that the appeal of the assessee was fixed for hearing by the ld. CIT(Appeals) on three dates, i.e. 12.11.2018, 27.11.2018 and 25.03.2019. He has submitted that the assessee sought adjournment of the hearing fixed on 12.11.2018 and 25.03.2019 by filing applications in writing on the ground that he was sick at the relevant time. He has submitted that the ld. CIT(Appeals), however, did not give any further opportunity to the assessee and proceeded to dismiss the appeal of the assessee for non- prosecution vide his impugned order passed ex-parte. He has contended that the ld. CIT(Appeals) thus has not given proper and sufficient opportunity to the assessee of being heard before dismissing the appeal for non-prosecution vide his impugned order passed ex-parte and there is a clear violation of principle of natural justice. Keeping in view this submission made by the ld. Counsel for the assesese in the light of the facts of the case as evident from record, I find merit in this contention raised by the ld. Counsel for the assessee. Even the ld. D.R. has not raised any objection in this regard. Moreover, the ld. CIT(Appeals) as per the provisions of sub-section (6) of section 250 was required to dispose of the appeal of the assessee vide an order in writing stating the points for determination, the decision thereon and the reasons for the decision. It is observed that the impugned order passed by the ld. CIT(Appeals) does not comply with these requirements. I, therefore, consider it fair and proper and in the interest of justice to set aside the impugned order Assessment Year: 2010-2011 Puja Khandelwal passed by the ld. CIT(Appeals) ex-parte dismissing the appeal of the assessee for non-prosecution and remit the matter back to him for disposing of the appeal of the assessee afresh on merit in accordance with law after giving proper and sufficient opportunity of being heard to the assessee. As undertaken by the ld. Counsel for the assessee, the assessee shall make due compliance before the ld. CIT(Appeals) and shall extend all the possible cooperation in order to enable the ld. CIT(Appeals) to dispose of the appeal afresh expeditiously.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on March 20, 2020.