Loading judgment…
Facts
The assessee filed an appeal against the CIT(A)'s order upholding an addition of Rs. 11,12,000/-. The assessee had deposited this amount in cash during demonetization. The Assessing Officer (AO) made the addition under section 69A of the Act as the source of the cash was not substantiated. The CIT(A) confirmed the addition, holding that the burden of proof was on the assessee.
Held
The Tribunal noted that the assessee failed to appear on multiple hearing dates and did not file any submissions. The assessee also failed to provide any material to support their grounds of appeal. Therefore, the Tribunal found no reason to interfere with the addition confirmed by the AO and CIT(A).
Key Issues
Whether the addition of Rs. 11,12,000/- on account of unexplained cash deposit during demonetization is justified, given the assessee's failure to appear or provide supporting evidence.
Sections Cited
250, 143(3), 69A, 115BBE, 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 19.02.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18.
The grounds of appeal
raised by the assessee are as follows: “1. The assessment order passed u/s 143(3) of Income Tax Act by the Assessing Officer and confirmed by the first appellate authority u/s 250 in bad in law and deserved to be uncalled for.
2. The assessing officer as well as first appellate authority has erred in law and on facts in making and confirming respectively the addition of Rs.11,12,000/-. The same deserves to be deleted.
3. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing.”
/AY.2017-18 Liyakat Rojan Miya Ansari 3. The case was initially posted for hearing on 16.07.2024. None attended on behalf of the assessee. The case was subsequently posted for hearing on 04.09.2024 and 11.11.2024. The Inspector of the Department, Shri Ranjit Kumar was present in the Court on 11.11.2024. He informed that he had contacted Mr. Chirag Shah, CA, the date before the hearing, who told that the notice of hearing was received and he would file an application for adjournment. However, nobody appeared nor any application for adjournment was filed. Considering the request of the President of ITAT Bar, Surat, a liberal view was taken regarding attendance of the applicant / appellant due to post-diwali period. Accordingly, case was adjourned to 16.01.2025, which was the last and final opportunity given to the assessee. None appeared on behalf of the assessee on 16.01.2025 nor any written submission nor any request for adjournment was made. Hence, no useful purpose would be served by prolonging the proceedings before us. Therefore, we proceed to dispose of the appeal based on material on record.
Facts of the case in brief are that the assessee had electronically filed return of income for the AY.2017-18 on 01.06.2017, declaring total income at Rs.3,77,280/-. The case of the assessee was selected for limited scrutiny under CASS. Various notices were issued to the assessee and he was asked to furnish requisite details and explanation. The assessee had deposited cash of Rs.11,12,000/- during the demonetization period over and above cash sale of Rs.3,42,400/-. The assessee submitted that he received cash of Rs.3,42,400/- /AY.2017-18 Liyakat Rojan Miya Ansari from sales and received Rs.8,00,000/- as loans and advances from various parties. However, the claim was not substantiated with any confirmation letters or evidence. Hence, Rs.11,12,000/- was added u/s 69A of the Act. The AO determined the total income at Rs.14,89,280/- as against the returned income of Rs.3,77,280/-. The same was taxed as per provisions of section 115BBE of the Act. Penalty proceedings u/s 270A of the Act are initiated by AO.
Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The appellant stated that the AO misinterpreted Rs.8,00,000/- as unsecured loans but the above sum was advances from customers. The CIT(A) observed that no confirmations of customer’s advances were given. The appellant also stated that the withdrawn cash was deposited, but complete bank account statement showing the withdrawals, deposits and the working of peak credit were not given. The CIT(A) observed that with no books of account or complete bank account statements or any evidence on how the cash was generated, the cash deposits in the bank account of the appellant remained unexplained. The CIT(A) relied upon the decisions of Chuharmul vs. CIT, (1988) 38 Taxman 190 (SC), wherein it was stated that once a person is in possession of the stated money, the burden of proof is on him to show he is not the owner. The same principle was upheld by the Hon’ble Supreme Court in case of Shashi Garg vs. PCIT, (2020) 113 taxmann.com 93 (SC), when the SLP against the Hon’ble High Court decision of upholding the Tribunal order of sustaining addition u/s 69A of the Act, was dismissed and it was held that burden to explain the source of cash /AY.2017-18 Liyakat Rojan Miya Ansari deposit was on the appellant-assessee, who as per the finding has not been able to discharge this burden. The CIT(A) held that as the money was found with the appellant in his bank account, it was on the appellant to prove the source of money. Since the burden has not been discharged by the appellant, there lies no further burden on the revenue to prove anything. Hence, the CIT(A) confirmed the addition made by the AO and dismissed the appeal of assessee.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The notices of hearing were served on the assessee on four occasions. The assessee had not complied with any of the notices. The Inspector of the Department had also contacted the ld. AR of the assessee, but there was no compliance on 11.11.2024 for 16.01.2025. The assessee has also not filed any written submission and details in support of the grounds raised
in the appeal. The assessee has also not requested for any adjournment.
7. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities.
8. We have head both the parties and perused the materials available on record. The assessee had filed the return of income for AY.2017-18. As discussed in the facts of the case, assessee had deposited cash of Rs.11,12,000/- in the bank account during demonetization. The assessee has failed to explain the nature and source of the cash deposited in his bank account. Before us, the appellant was provided four opportunities of hearing. The ld. AR of the assessee was also personally contacted by the Inspector of Income-tax Department. He /AY.2017-18 Liyakat Rojan Miya Ansari also did not respond to the notices issued by us nor any written submission was made. Thus, we find that assessee has no material to support the grounds raised by him; otherwise, there was no reason for the silence of the assessee. In absence of explanation regarding nature and source of investment, the addition of Rs.11,12,000/- u/s 69A of the Act by the AO, which has been confirmed by CIT(A), does not require any interference. Hence, the grounds are dismissed.
9. It has also been held in a number of cases that dismissal of appeal is an inherent power which every Tribunal possesses. The Hon’ble Bombay High Court in case of M/s Chemipol vs. UOI, Central Excise Appeal No.62 of 2009, referred to the decision in case of Sundarlal vs. Nandramdas, AIR 1958 MP 206 where it was observed that though the Act does not give any power of dismissal, it is axiomatic that no Court or Tribunal is supposed continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every Tribunal possesses. This was approved in Dr. P. Nalla Thampy vs. Shankar, 1984 (Supp) SCC 631. In New India Assurance vs. Srinivasan, (2000) 3 SCC 242, it was held that every Court or judicial body or authority which has a duty to decide a lis between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the Court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. The Hon’ble Supreme Court in