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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SMT. DIVA SINGH
The present appeal has been filed by the assessee, assailing the correctness of the order dated 29.11.2017 of CIT(A), Meerut pertaining to 2009-10 AY on the following grounds:
1. “That the bank deposit of Rs. 33,60,540/- was made out of sale of agriculture land, the AO has not considered this fact and made addition u/s 69A of I.T. Act. However, section 69A is not applicable and it is applicable only in the search cases and CIT(A) also in error confirming the same.
2. That the assessee has not maintained any books of account, therefore, bank account cannot be treated as books of account of the assessee. Therefore, addition made by AO u/s 69A is bad in law and CIT(A) also is in error confirming the same.
3. That the AO has not considered the Allahabad High Court Judgment in the case of Intzar Ali. Hence, assessment made by the AO without any basis and confirmed by CIT(A) is bad in law.
4. That the assessee has right to add, delete or modify any grounds during the appeal proceeding.”
2. At the time of hearing, an adjournment application was moved on behalf of the assessee. Mr. Mohit Kr., Advocate was present in support thereof. However, on considering the material available on record the appeal was passed over and directed to be taken on its turn as per the Cause List as the same could be decided after hearing the Ld. Sr. DR on merits.
3. The relevant facts of the case are that as per AIR information it was noticed that the assessee had made cash deposits aggregating Rs. 33,60,540/- in its Bank. The AO required the assessee to explain the same. The assessee initially was represented by a Counsel Sh. J.P. Gupta who stated that the amount had been deposited after selling agricultural land. Thereafter the assessee subsequently was represented by another Counsel Sh. Sandeep Pandey who appeared and stated that the assessee had deposited the same from the receipt of sale proceeds of his property where the amount had been received as an advance. It was stated that ultimately the deal did not materialize and the entire amount was returned. The assessee was stated to be farmer, however, no evidence was filed either qua the said activity nor any other document evidencing the fact of ownership of agricultural land etc. As a result, the assessment was concluded u/s 147/144 wherein the said amount was added.
4. In appeal before the CIT(A), the assessee sought permission to file fresh evidences. The CIT(A) being of the view that sufficient opportunity was provided by the AO, rejected the prayer. For ready reference the relevant finding is reproduced hereunder: “In these circumstances, I am not inclined to admit the additional evidence now being requested. In the absence of any evidence in the assessment record except the copy of passbook, wherein the impugned amount has been deposited or a letter by the assessee stating certain dates when these monies were withdrawn and paid. No supporting document like the sale deed of property causing the deposit in assessee’s bank a/c or an affidavit has been furnished in the course of assessment proceedings when can be relied upon to verify the deposit. Thus, considering the totality of evidences filed before the AO, which I have re-considered, it is found that AO’s findings in the assessment order have not been controverted by the assessee or his counsel. I am, therefore, constrained to confirm the findings of the assessment order.”
The Ld. Sr. DR relies on the orders of the AO and CIT(Appeals).
I have heard the rival submissions and perused the material on record. On a reading of the order, it is seen that nothing has been brought on record by the CIT(A) to show what was the evidence sought to be filed by the assessee. Admittedly, as per record the assessee described himself before the AO as a farmer. The assessee though sporadically was represented by counsels appointed by him, however, admittedly they failed to file any evidence in support of the stated claim of advance received for sale of property. It is further seen that frequent change of the Counsels at the assessment stage may have handicapped the assessee. I find on going through the record that no good reason has been cared to be brought on record by the CIT(A) to justify why in the peculiar facts and circumstances, fresh evidences could not have been admitted. Admittedly, the claims are made at the first instance before the AO. The supporting evidences which the counsels sought to have filed, admittedly has not been filed. The stated shortcoming could have been addressed before the statutorily provided Forum of the First Appellate Authority. No justifiable reason is available on record to show why the said forum was to be treated as a post office and the justice dispensation should be mechanical and robotical. The law does not perceive the First Appellate Forum as an empty, meaningless Forum. Sub-section (4) and (5) of Section 250 of the Income Tax Act and clause (c) of sub-section (1) of Section 251 of the Income Tax Act,1961 read alongwith sub-Rule (4) of Rule 46A of the Income Tax Rules, 1962 has more than adequately empowered the CIT(A) to call for necessary evidences to ensure that justice is done. The said Forum has specifically been created to redress the grievances of the tax payer and its relevance and existence cannot be allowed to be undermined. The judicial remedy of appeal cannot be allowed to be treated as an empty ritual and a meaningless mechanical exercise. In the facts of the present case, admittedly a farmer asserting facts known to be correct and undeniably true according to his knowledge and thus may have entertained the belief that these facts may not be required to be substantiated. Thus, may not have lead evidence demonstrating his stated activity nor any evidence of any agricultural land holding before the AO. However, when the Statute has provided an Appellate Forum the fresh evidences considering the facts in support of the stated claims which admittedly is relevant and crucial evidence for determining the issues, the evidences if sought to be made available, should have been accepted and infact in the absence of assessee's prayer, the CIT(A) having the power to call for supporting evidences should himself have directed the assessee to place the evidence on record in support of its claim made by way of grounds raised
. It is for the tax authorities to assist such taxpayers to be tax compliant instead of forcing such assessees towards unscrupulous advisers who may instead initiate him towards adopting unscrupulous strategies aimed towards circumventing the law. The fundamental fact that only just and due taxes for the state be collected at all stages should not be ignored. To gather tax for the State based on the ignorance of the tax payers can never be the aim of State Administration. The impugned order, accordingly, having failed to address the issues cannot be upheld and is set aside.
7. In the circumstances, the Ld. Sr. DR was required to address as to which forum the issue should be remanded back. The Ld. Sr. DR maintaining that the impugned order may be upheld even though unable to address why the evidences which go to the root of the matter as they were relevant and crucial for deciding the issue should not be admitted solely because it was not made available to the AO, requested that in case the issue has to be remanded, then it may be remanded to the AO as enquiries may be required to be carried out at his end. Accepting the prayer, the impugned order is set aside back to the file of the AO with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. It is advised that the assessee in its own interest makes full and proper compliance before the said authority as in the eventuality of abuse of the same, the AO would be at liberty to pass an order on the basis of material available on record.
In the result, the appeal of the assessee is allowed.