SUNITA DEVI,PATNA vs. ITO, WARD- 6 (1), PATNA

7. That the delay in filing the appeal was not intentional, nor due to any negligence or laxity on my part, but due to bona fide reasons beyond my control: 8. That I submit that substantial justice should not be denied merely due to procedural delay and that the appeal may be decided on merits.

raised by the assessee is reproduced as under: “1. Addition of Rs. 1,26,24,890/- in income is bad in law.”

3. Brief facts of the case are that the assessee is an individual and is the proprietor of M/s Balajee Polly Packaging and had filed her return of income on 07.11.2017 showing total income of ₹4,52,050/. The return was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) for the reason "cash deposit during demonetisation period". Statutory notices were issued along with a questionnaire but the assessee did not comply with the notices issued. Thereafter a notice u/s 133(6) of the Act was issued calling for the bank statement and other details. On perusal of the bank statement, it was found that the assessee had deposited a sum of ₹1,17,84,500/- during the demonetisation period.

Sunita Devi AY: 2017-18 Further, on perusal of P & L A/c and balance sheet of the appellant, it was also found that the assessee had shown total sales/gross turnover of ₹4,22,81,711/- which was over and above ₹4,05,35,287/- i.e. the amount credited in all the bank accounts during the year under consideration, but no explanation was furnished by the assessee regarding the nature and source of the cash of Rs. 1,17,84,500/- during the demonetisation period. Thus, the balance amount of Rs. 3,04,97,211/- was treated as turnover by the Ld. AO. Information sought from the Commercial Tax Department was, however, not received. The Ld. AO applied a Net Profit to turnover ratio @2% on this turnover and added the differential amount of Rs. 1,34,724/- (difference in NP computed and NP shown in the return) to the total income of the assessee as business income with other additions. Further, in the absence of any material evidence, the amount of cash deposited during the demonetisation period i.e. ₹ 1,17,84,500/- remained unexplained within the meaning of section 69A of the Act and was added to the total income. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who, vide the impugned order, partly allowed the appeal as there was no compliance to the various notices issued for hearing. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

5. In the course of the appeal before us, the Ld. AR sought adjournment, which was refused. It was informed to the Ld. AR that before the Ld. AO as well as before the Ld. CIT(Appeals), no compliance was made to the various notices issued for hearing and the assessment order was made under section 144 of the Act and even the appeal was decided ex parte. Before us, along with the appeal memo, the assessee has filed the written Sunita Devi AY: 2017-18 submission, though it is addressed to the Income Tax Administrative Tribunal, Patna. It is mentioned that the notices issued by the Ld. AO were not complied with but when a show cause notice for penalty was received, the assessee submitted the reply along with certain documents. It was stated that the assessee had not received any previous notice and was not aware of or knowledgeable about the seriousness of the matter and had requested that the penalty under section 271(1)(b) of the Act may be dropped. In the appeal before the Ld. CIT(Appeals), the appeal was partly allowed and as the turnover of ₹4,22,81,711/- was found to be higher than the amount credited in the bank account at ₹4,05,35,287/-, the credits in bank were found favourable. It was stated before the Ld. CIT(A) that the cash deposited during the demonetisation period was from sale proceeds i.e. either from cash sales or from debtors for credit sales but as the assessee failed to submit any documents relating to the same, the addition u/s 69A was confirmed but relief was allowed on other grounds. The assessee has furnished the copy of sales register and cash book before us. However, since the same was not filed before the Ld. AO or before the Ld. CIT(Appeals), it was considered in the interest of justice and fair play that the matter may be remanded to the Ld. AO to examine the documents filed in support of the claim that the cash deposit was out of the sale proceeds/receipt of money from the debtors. Hence, the order of the Ld. CIT(A) is hereby set aside on the issue of cash deposit during the demonetisation period which is remanded to the Ld. AO for considering the documents filed by the assessee before us, which should also be filed before the Ld. AO, who shall grant an opportunity of being heard to the assessee and delete the addition if the submission is acceptable as once the turnover is accepted, there is no Sunita Devi AY: 2017-18 justification for making any separate addition under 69A for the cash deposited during the demonetisation period.

6. Since there was no proper compliance before both the Ld. AO as well as before the Ld. CIT(A), in the interest of justice and fair play it was considered by the Bench that the request of the assessee to remand the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) on the additions sustained and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the ground taken by the assessee in her appeal are allowed for statistical purposes.