ATUL FINLEASE,JAMNAGAR vs. DCIT CIRCLE 2(1), JAMNAGAR

Notice u/s 143(2) was issued on 02.09.2021 vide which assessee was provided copy of reasons recorded and asked to furnish reply within 15 days. Assessee did not file any reply of above notice as was required to be filed within 15 days. Assessee was issued notice u/s 142(1) dt 13.12.2021 along with questionnaire for furnishing reply by 20.12.2021 but no compliance made by the assessee. Assessee was given fresh opportunity vide notice dt 07.01.22 for furnishing reply of the questionnaire already issued particularly to explain the source of deposit of SBN of Rs 11,40,000/- with Cooperative bank Gulab Nagar Branch Jamnagar but not reported in part B-TTI-computation of tax liability in ITR.

As assessee did not furnish any reply, it was provided again one more opportunity vide notice 142(1) dt 07.02.22 for furnishing reply by 10.02.22 but no again no reply/compliance made by the assessee. Despite above more than sufficient opportunity already provided, last but not least one more opportunity vide notice u/s 142(1) dt 16.02.22 along with questionnaire provided to the assessee. Vide this notice, assessee was again asked to explain the source of deposit of SBN notes of Rs 11,40,000/- in bank account apart from other information and proceedings were fixed for 18.02.22. but this effort also gone futile as no compliance made by the assessee by the due date. All of the above notices served through her email id registered with the department as well as in e-filing account of the assessee but failed to comply with any of the above notices.

In the above circumstances, Ld. AO passed best judgment assessment because the case was getting time barred on 31.03.2022. More than sufficient opportunities has already been granted to the assessee but it appears assessee is having very casual approach towards departmental proceedings and has not furnished even single reply during assessment except filing TR in compliance of notice u/s 148. Despite the service of notices through registered e-mail as well as through its e-filing account in e-proceedings, assessee is not bothered about the pending assessment proceedings and appears not interested in pleading his ITA-875/RJT/2024 (AY-2017-18) Atul Finlease Vs. DCIT Circle-2(1), Jamnagar. case by furnishing reply/information or it has no explanation/reply of the quarries at all. So Ld. AO proceeded to complete assessment u/s 144 of the income tax act.

Aggrieved by the order of the Ld. AO assessee carried the matter to the Ld. CIT(A).

Assessee vide submission dated furnished the copies of cash book, bank statement and audit report in response to the notices issued by the Ld. CIT(A). However Ld. CIT(A) has confirmed the addition of Rs. 11,40,000/- u/s 69A made by the Ld. AO.

Aggrieved by the order of the Ld. CIT (A) assessee is in appeal before us.

During the course of hearing the Ld. Counsel for the assessee submitted that assessee has complied with the notices and submitted details and documents before the Ld. CIT(A) on 28/06/2024. Ld. CIT(A) had noted that assessee had simply withdrawn the cash from its bank account and has only kept it itself since April 2016 till Nov 2016 and had re-deposited the same into its bank account again which seemed illogical and also not practical for any reasonable person to keep on withdrawing again and again from the bank account and have the cash with oneself without spending. Therefore, assessee failed to prove the source of cash deposited in bank account and Ld. CIT(A) has confirmed the addition of Rs. 11,40,000/- u/s 69A on account of unexplained money. Hence, Ld. CIT(A) had dismissed the appeal of the assessee.

Aggrieved by the order of the Ld. CIT(A) assessee is in appeal before us.

During the course of hearing Ld. Counsel for the assessee submitted that assessee could not comply with the show cause notice issued by Ld. AO because assessee had changed the e-mail ID. However, same was not uploaded on Income Tax Portal and old mail was not accessible to the assessee.

Ld. Counsel submitted that assessee had complied with the notices issued by the Ld. CIT(A) and submitted details but assessee could not file the same before the Ld. AO. Ld. Counsel also prayed for an opportunity to explain the case before the lower authority.

On the other Ld. DR had relied on the order of the Ld. AO. However Ld. DR had not objected to the prayer of the assessee.

We have heard both the parties and perusal the records available, we note that due to change in e-mail ID assessee could not comply and submit the relevant documents before the Ld. AO to plead his case successfully. We also note that assessee had complied with the proceedings before the Ld.CIT(A) and furnished all the documents. It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Ld. AO for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, we deem it fit and proper to set aside the order of the Ld. AO and remit the matter back to the file of the Ld. AO to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed.

In the result, the appeal of the assessee is allowed for statistical purposes.