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Facts
The assessee, Pragnesh Kantariya, is a partner in M/s Kamnath Enterprise and had provided an unsecured loan. The Assessing Officer (AO) reopened the case based on information that the assessee had deposited a large sum of cash into bank accounts, significantly exceeding his declared income. The assessee failed to provide explanations for these deposits despite multiple notices.
Held
The CIT(A) upheld the AO's order, adding the unexplained cash deposits to the assessee's total income under Section 69A of the Income Tax Act. The assessee appealed this order, but did not appear for hearings before the AO, CIT(A), or the Tribunal, indicating a lack of interest in pursuing the appeal.
Key Issues
Whether the additions made by the AO and confirmed by the CIT(A) on account of unexplained cash deposits are sustainable, and whether the assessment order was passed without giving a proper opportunity of being heard to the assessee.
Sections Cited
147, 144, 144B, 250, 69A, 115BE, 234A, 234B, 234C, 271AAC, 272A(1)(d)
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
(�नधा�रणवष� / Assessment Year: (2017-18) (Hybrid Hearing) Pragnesh Kantariya Vs. Income Tax Officer, wd –1, (Prop. of Vision Industies) Surendranagar, Income Tax Office, B2-1101, Shilpan Onyx, Gangotri Park Opp. Mela Medan, Main Road, University Road, Surendranagar-363001 Rajkot – 360005 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: BBSPK0467P (Appellant) (Respondent) Appellant by : None Respondent by : Shri K. L. Solanki, Ld. Sr. DR Date of Hearing : 24/04/2025 Date of Pronouncement : 09/07/2025 आदेश / O R D E R PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by the assessee, pertaining to Assessment Year 2017-18, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), Commissioner of Income-tax (Appeal), dated 08.12.2023, which in turn arises out of an order passed by the Assessing Officer, u/s. 147 r.w.s. 144 and 144B of the Act, on 21.09.2021.
Grounds of appeal
raised by the assessee are as follows:
1. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred in passing Appeal Order, without giving effective opportunity of being heard without granting opportunity of mandatory (AY 2017-18) Pragnesh kantariya personal hearing through video conferencing and thus passing appeal order in violation of principle of natural justice.
2. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred on facts as well as in law in upholding total income at Rs.1,82,11,300/- as assessed by Learned Assessing Officer based on the Assessment Order under section 147 r.w.s. 144 of the Act, which is arbitrary, erroneous, unjustified and bad in law.
3. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred on facts as well as in law in passing Appeal Order, in so far as upholding total income at Rs. 1,82,11,300/- as assessed by Learned Assessing Officer.
4. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred on facts as well as in law in passing Appeal Order, by upholding addition of Income of Rs. 1,77,30,600/-, made by the Learned Assessing Officer, which is equal to cash deposited in bank account during the year under consideration, treating the same as Unexplained money under section 69A of the Income Tax Act, 1961 r.w.s 115BE of the Income Tax Act, 1961. The addition is in total disregards to the facts of the appellant's case and is totally unjustified and deserves to be deleted and may kindly be deleted.
5. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred in passing Appeal Order, by upholding the action of Learned Assessing Officer in charging interest u/s. 234A, 2348 and u/s 234C of the Act when demand of Income Tax itself is not sustainable.
6. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred in passing Appeal Order, by upholding the action of Learned Assessing Officer in initiating penalty proceedings u/s. 271AAC of the Act on addition of Rs. 1,77,30,600/-.
7. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), has erred in passing Appeal Order, by upholding the action of Learned Assessing Officer in in initiating penalty proceedings u/s 272A(1)(d) of the Act.
Brief facts of the case that during the course of assessment proceedings that the assessee is a partner in M/s Kamnath Enterprise with 45% share. It was further reported that the assessee had given unsecured loan of Rs. 1,73,40,000/- on behalf of Mis Vision Industries to M/s Kamnath Enterprise during F.Y. 2016-17 out of which the outstanding amount as on 31/03/2017 was of Rs.1,30,40,000/- and accordingly submitted his ledger confirmation, copy of bank statement and copy of ROI etc. for the concerned period. The assessee had admitted vide his letter dated 28/11/2019 that the source of the (AY 2017-18) Pragnesh kantariya loan given was from the loan taken from Union Bank of India of Rs.90,00,000/- and remaining amount was managed from personal income and other sources. On perusal of bank statement of M/s Vision Industries, it is found that the assessee had maintained a bank account of his proprietary concern, with Union Bank of India, race course circle, Rajkot, A/c No. 536905010000135, during the F.Y. 2016-17. The bank account of M/s Vision Industries had several cash deposits to the tune of Rs.1,64,32,000/- during the F.Y. 2016-17. However, the assessee had filed the Return of Income for AY 2017-18 declaring nominal total income of Rs.4,80.700/- which clearly doesn't match creditworthiness of loan given to M/s Kamnath Enterprise. Further the source of cash deposits in bank account of Rs. 1,64,32,000/- during the F.Y.-2016-17, is also not found explained and accounted for considering the total income of only Rs.4.80,700/-, declared by the assessee, in the ROI filed for AY 2017-18. The case was reopened with the prior approval of Range Head, Surendranagar and notice u/s 148 was issued to the assessee on 28/01/2020 and the assessee was asked to file the return of income in response to the notice u/s 148. In response to the notice u/s 148 neither the return was filed nor any response was given by the assessee. Thereafter a vide notice u/s 142(1) dated 02/02/2021 the assessee was again requested to file his return of income in response to notice issued u/s 148 of the Act. Further he was requested to furnish the details of source of income and note on business activities carried out in F.Y. 2016- 17computation of income, balance sheet of proprietorship concern and personal balance sheet, P& L account, PAR, Tax Audit report(if applicable) for A.Y. 2017-18, along with the copy of all bank statements alongwith the narration of major entries for F.Y. 2016-17. The assessee did not respond to the said notice. Vide notice dated 11.08.21, the assessee was once again requested to provide the requisite information. Vide the said notice it was also intimated that in absence of reply, the cash credit in the bank account (AY 2017-18) Pragnesh kantariya during the relevant Assessment Year will be treated as undisclosed income during the year and will be taxed accordingly. But no response has been furnished by the assessee till date. The assessee was given opportunities to explain the nature and source of cash deposits during but the assessee has failed to comply with the notices and has failed to furnish any details with respect to cash deposits made in the bank accounts during the relevant assessment year. Show Cause Notice was issued to the assessee on 02.09.2021 and the assessee was given an opportunity to show cause as to why the assessment should not be completed under section 144 of the Income-tax Act, 1961 in view of the above facts and circumstances of the case. Further, it was clearly mentioned in the show-cause notice that the case will be finalized ex-parte under section144 on the basis of material/information available on record But the assessee has failed to respond to the said show-cause notice. The above non-compliance of the statutory notices and show cause are sufficient to prove that the assessee does not wish to say anything in the matter or he has no explanation to offer in support of his claim. In view of the aforementioned facts on record, I have no option left with me but to complete the assessment proceedings as ex- parte u/s 144 of the Income Tax Act.
That the assessee filed an appeal against the order of the Ld. AO, vide order dated 21.09.2021, in the office of the Ld. CIT(A), Rajkot. The Ld. CIT(A) has dismissed the appeal with following observation: “8.7 On perusal of the A.O.'s order, it is noted that the A.O. reopened the case of the appellant on the basis of information received from ITO, Ward-2(7), Jamnagar that during the course of assessment proceedings in the case of M/s Kamnath Enterprises for the A.Y. 2017-18, it was found that the appellant Sh. Pragnesh Manharbhat Kantariya (Prop. M/s Vision Industries) was also a partner in M/s Kamnath Enterprises with 45% share. It is also noticed by the A.O. that the appellant had given unsecured loan of Rs.1,73,40,000/- on behalf of M/s Vision Industries to M/s Kamnath Enterprises during the F.Y. 2016-17 relevant to A.Y. 2017-18 out of which outstanding amount was Rs. 1,30,40,000/- as on 31.03.2017. During the assessment proceedings before A.O, the appellant had (AY 2017-18) Pragnesh kantariya admitted that this loan was given from the loan taken by him from Union Bank of India amounting to Rs.90,00,000/- and remaining amount from personal income and other sources. It was further observed by the A.O. from bank statement of M/s Vision Industries that the appellant had maintained a bank account No. 536905010000135 with Union Bank of India in the name of his proprietary concern and had deposited cash of Rs.1,64,32,000/- and Rs.12,98,600/- in ICICI Bank, as per SFT data available with department, during the F.Y. 2016-17, however, he had declared return of income only at Rs.4,80,700/-. During the assessment proceedings, the A.O. provided ample opportunities of hearing to the appellant to explain the source of cash deposits in his account and for providing other information. However, the appellant failed to explain the source of deposits of Rs.1,64,32000/- in his bank account maintained with Union Bank of India and Rs.12,98,600/- in ICICI Bank totaling to Rs.1,77,30,600/-. In the absence of furnishing any explanation/evidence regarding source of cash deposit made in his bank account, the AO treated the amount of Rs.1,77,30,600/- as unexplained cash deposit and added to the income of the appellant u/s 69A of the I.T. Act. Even during the appellate proceedings, the appellant failed to furnish any submission/evidence despite being provided opportunities of hearing. As the assessment in this case was completed u/s 147/144 of the Act due to non- compliance on the part of the appellant, a remand report was also called from AO on 09.11.2023. However, the AO has not submitted remand report despite repeated reminders. As during the appellate proceedings, the appellant failed to furnish any submission/evidence in support of his appeal filed, I am in agreement with the finding made by the A.O. in the assessment order and confirm the order of the A.O. Hence, the ground of appeal is not allowed..”
That the assessee filed an appeal against the impugned order dated 20.12.2024 before the Tribunal.
During the course of hearing, neither the assessee himself appeared nor anybody appeared on behalf of the assessee.
On the other hand, the Ld. Sr. DR has submitted that the assessee neither appeared before the Ld. AO for assessment nor appeared before the Ld. CIT(A) to explain his appeal case. That the Ld. Sr. DR relied upon the order of the Ld. CIT(A).
We have heard both the parties and perused the file and documents available on record. We note that assessee has filed return of income declaring income of Rs. 4,80,700/-. Thereafter, the case was reopened by (AY 2017-18) Pragnesh kantariya issuing notice u/s. 148 of the Act dated 28.02.2020. There is no response from the assessee. Notice dated 02.02.2021 & 11.08.2021 and show cause notice 02.09.2021 and 15.09.2021 remain uncompiled with by the assessee. The Ld. AO passed an order dated 21.08.2021 u/s. 147 r.w.s. 144 and 144B of the Act and income assessed at Rs. 1,77,30,600/- upon appeal before Ld. CIT(A), NFAC and again the notice issued by the Ld. CIT(A) for hearing on 25.07.2023, 03.08.2023 and 09.11.2023, the assessee has not complied with the terms of notice and the appeal of the assessee was dismissed by the Ld. CIT(A), and the order of Ld. AO confirmed. The assessee filed an appeal against the impugned order dated 08.12.2023 before the This Tribunal. Hearing notice dated 15.10.2024, 16.12.2024, 03.04.2025 and 24.04.2025 (Copy of notice placed on record) issued by the Tribunal, but there was no response to the notices by the assessee. Meaning thereby the assessee is not interested in pursuing the appeal. The latin maxim, Vigilantibes, dormientibus, jura subveniunt", has rightly stated that "Law is meant for the vegilant, and not for those who slumber and sleep" This rule is designed to promote diligence on the part of suitors and discourage laches (unressable delay). When a party has slept-over his right, would not be benefited by the provisions of the Act. Accordintg to rule 24 of the Income tax Tribunal rule,1963. The appeal petition of the assessee is disposed off, since neither the assessee appeared nor authority representative appeared when the appeal called for hearing, no adjournment application was moved by the assessee. We further note that the assessee has filed the appeal to the Tribunal late by 23 days along with application for condonation of delay in filing the appeal, we note that the assessee has not gave due care and attention to the case and negligent in pursuing the appeal before this Tribunal. Based on these facts and circumstances, we are of the view to dismiss the appeal of the assessee.
(AY 2017-18) Pragnesh kantariya 9. It would be appropriate to add that in case the assessee is able to established before the Tribunal that there exist a reasonable cause for non- representation on the date of hearing, it would be at liberty of the assessee, if so advised, to seek for a recall of this order.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 09 -07-2025.