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Facts
The assessee filed an appeal against an addition of Rs. 53,81,355/- made under section 68 for unexplained cash deposits for AY 2006-07, which was confirmed by the CIT(A) after a remand from the Tribunal. The assessee subsequently expired, and despite opportunities, no legal heirs came on record to pursue the appeal. Furthermore, no submissions or evidence were provided at any stage of the appellate proceedings to justify the claim.
Held
The Tribunal noted the non-appearance of the assessee's legal heirs and the complete lack of evidence or submissions to substantiate the assessee's claims or challenge the additions by the lower authorities. Finding no reason to interfere with the orders of the CIT(A) and AO, the Tribunal dismissed the appeal. Liberty was granted to the legal heirs to file an application for recalling the order if desired.
Key Issues
Challenge to addition of unexplained cash deposits under section 68 where the assessee's legal heirs failed to pursue the appeal or provide supporting evidence.
Sections Cited
143(3), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH’ G’: NEW DELHI
ORDER PER S. RIFAUR RAHMAN, AM
The assessee filed the present Appeal by challenging the order dated 13/01/2017 passed by Office of the Income Tax Officer, Ward-36(5), Commissioner of Income Tax (appeals)-XII, (‘Ld. CIT(A)’ for short) New Delhi for Assessment Year 2006-07 on the following grounds:-
Subhash Chand Jain Vs. ITO “1. That in the facts and circumstances of the case, the Ld. CIT(A)XII grossly erred in passing the appellate order dated 13.01.2017 at income of Rs.54,97,650/- as assessed by the Ld. ITO, Ward 36(5) vide order dated 25.02.2016.
2. That the Ld. CIT(A) did not provide adequate opportunity to the assessee and passed the appellate order against the principle of natural justice.
That the appellate order dated 13.01.2017 has been passed ex-parte without considering the merit of the case and the material available on record.
4. That addition of Rs.53,81,355/- made by the Ld. ITO and confirmed by the Ld. CIT(A) may kindly be deleted to meet the ends of justice.”
When the case called neither the assessee nor the representative of the assessee appeared before the Bench. As per the order sheet entry dated 19/01/2023, it is found that the assessee expired on 25/07/2021 and the Bench has provided the opportunity to the legal heirs of deceased assessee to come on record to pursue the Appeal. Till this day, none of the legal heirs of the assessee came forward to come on record and pursue the present Appeal. In our considered opinion merely keeping the present Appeal pending will not serve any purpose, therefore, we
Subhash Chand Jain Vs. ITO deem it fit to decide the present Appeal after hearing the Ld.
Departmental Representative.
3. Brief facts of the case are that, the assessee filed return of income declaring total income of Rs, 1,16,290/-. The case was selected for scrutiny and assessment proceedings u/s 143(3) were completed on 12/12/2008, wherein the Assessing Officer made addition of Rs. 53,81,355/- u/s 68 of the Act on account of unexplained cash deposits out undisclosed income. As against the said assessment order, the assessee preferred an Appeal before the CIT(A) and Ld. CIT(A) dismissed the Appeal filed by the assessee which has been challenged before the Tribunal in the first round and the Co-ordinate Bench of the Tribunal vide its order dated 21/02/2014, remitted the issue to the file of the A.O. to decide afresh. In compliance of the direction of the Tribunal, the assessment has been framed u/s 143(3) of the Act on 25/02/2016 by making addition of Rs. 53,81,355/- u/s 68 of the Act on account of undisclosed source of income. The assessment order dated 25/02/2016 has been challenged before the CIT(A), the Ld. CIT(A) vide order dated 13/01/2017, dismissed the Appeal filed by the Subhash Chand Jain Vs. ITO assessee. As against the order of the Ld. CIT(A), the assessee preferred the present Appeal on the grounds mentioned above.
The Ld. Departmental Representative vehemently submitted that the Grounds of appeal sans merit and relying on the order of the Ld. CIT (A) sought for dismissal of the present Appeal.
We have heard the Ld. Departmental Representative and perused the material available on record. It is found that after the remand from the Tribunal the assessee was asked to justify with documentary evidence along with copy of the Wealth Tax return for Assessment Year 2005-06 and 2006-07 to substantiate the claim of the assessee having opening cash balance in hand as on 01/04/2005 with regard to the cash deposit of Rs. 53,81,355/- in his bank accounts. The A.O. has also asked for confirmation of Mr. Hem Chand and Sh. Manoj Barwa in support of the assessee’s claim of having land deal with him and was also asked to submit the copy of the account audited balance sheet regarding the sale and purchase of properties and land for last two Financial Year i.e. F.Y 2004-05 and 2005-06 to establish the source of cash balance of Subhash Chand Jain Vs. ITO Rs. 45,56,510/- . After considering the submissions the A.O. was of the opinion that the assessee could not substantiate his claim that the assessee was having cash balance of Rs. 45,56,510/-, accordingly made addition. In the Appeal proceedings before the CIT(A) the assessee has not made any submissions regarding the Grounds of appeal, accordingly, the Ld. CIT(A) dismissed the Appeal in following manners:-
“5.3 Appellant had filed its ITR for A.Y. 2006-07 on 31.03.2007 declaring total income of Rs.1,16,290/-. Order u/s 143(3) was passed on 12.12.2008 by making an addition of Rs.53,81,355/- u/s 68 of the Act on account of unexplained cash deposits. Appellant filed an appeal against CIT(A)'s order and Hon'ble ITAT vide its order dated 21.02.2014 remitted the matter back to the file of Assessing Officer to decide the matter afresh in accordance with law. Assessing Officer issued notices to file justification along with documentary evidence in pursuance to the direction of Hon'ble ITAT. Assessee vide order sheet entry dated 03.02.2016 was asked to file justification with the documentary evidence alongwith copy of Wealth Tax Return for A.Y. 2005-06 & 2006-07 to substantiate his claim of having opening cash balance in hand as on 01.04.2005 with regard to the cash deposit of Rs.53,81,355/- in his bank accounts. Assessing Officer also asked the confirmation of Mr. Hem Chand and Sh. Manoj Barwa in support of Appellant's claim of having land deal with them and was also asked to submit the copy of audited Balance-Sheet regarding sale & purchase of properties and land for last two Financial year i.e. F.Y. 2004-05 & 2005-06 to establish the source of cash balance of Rs.45,56,510/-. Assessing Officer after
Subhash Chand Jain Vs. ITO considering the submissions of the Assessee came to the conclusion that Assessee had not explained his claim that he was having cash balance of Rs.45,56,510/- as he had not furnished copy of Balance-Sheet at the time of filing ITR neither Assessee had filed the copy of Wealth Tax Return though he had cash in excess of exempted unit for Wealth Tax. Assessing Officer also observed that Assessee had not furnished the copy of cash book for the period 01.04.2004 to 31.03.2005 and, therefore, he held that the cash balance does not explain the source of cash deposits in F.Y. 2005-06 relevant to A.Y. 2006-07. Assessing Officer also held that Assessee was having business income of Rs.82,300/- against the turnover of Rs.5,90,520/- which clearly shows that Assessee did not require such a huge cash-in-hand. Assessing Officer also observed that Assessee had submitted any documentary evidence for his claim that cash deposit of Rs.4,30,000/- was derived from Agriculture this claim that cash deposits and other details of crops grown and expenditure thereon. Assessing Officer also did not accept the claim of Assessee that he had given a loan of Rs.8,00,000/- for a short period out of their family funds which was given in the form of loan to the son and the same cannot be considered to have been utilized for the purpose of deposit. Assessing Officer made an addition of Rs.53,81,355/- on account of unexplained cash deposits in his bank account in absence of any substantive reply and documentary evidence in support of the claim made.
5.4 During the course of appellate proceedings, Appellant has not made any submissions regarding the grounds of appeal. Therefore, I am unable to interfere with the Assessing Officer's observation.”
Subhash Chand Jain Vs. ITO 6. Though the death of the assessee has been reported before the Tribunal on 30/11/2022 no steps have been taken to bring the legal heirs of the assessee on record in order to contest the Appeal before use. Considering the fact that no evidence has been provided before the A.O. to substantiate the claim of the assessee and to counter the allegation of the A.O. and no submission has been made before the Ld. CIT(A), we find no reason to interfere with the orders of the Lower Authorities, accordingly, the Appeal of the assessee is dismissed.
Nevertheless the liberty is given to the legal heirs of the assessee to file appropriate application in accordance with law for recalling this order in case if it is so desired.