SH. RAJIV BHATI,PANIPAT vs. ITO, FARIDABAD

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ITA 5366/DEL/2014Status: DisposedITAT Delhi20 September 2017AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not afforded proper opportunity to present details and documents due to short time gaps in notices. Therefore, the case was restored to the AO for a fresh decision.

What were the facts?

The Assessing Officer (AO) made an ex-parte assessment under Section 144, adding Rs. 91,47,000/- on account of cash deposits as income from undisclosed sources. The assessee contended that adequate opportunity was not provided to explain these deposits.

What were the issues?

Whether the assessee was denied natural justice due to inadequate opportunity for presenting evidence during the ex-parte assessment. The quantum of addition and application of peak theory were also disputed.

Which sections of the Income-tax Act were involved?

Section 144,Section 143(2),Section 142(1),Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI

Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI SUDHANSHU SRIVASTAVA

For Appellant: Dr. Rakesh Gupta & Shri Somil Aggrawal, Advs
For Respondent: Shri Atiq Ahmad, Sr. DR
Hearing: 14.09.2017Pronounced: 20.09.2017

This appeal by the assessee is instituted against the order passed by the ld. CIT(A)-2, Faridabad vide order dated 21.07.2014 for assessment year 2009-10. The grounds raised are as under:-

“1.00 That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned ex-parte order passed by Ld.

ITA 5366/Del/2014 Assessment year 2009-10 AO u/s 144 that too without assuming jurisdiction as per law and without giving adequate opportunity of being heard. 2.00 That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs.91,47,000/- on account of cash deposits by treating it as income from undisclosed sources and that too by recording incorrect facts & findings and without giving adequate opportunity of being heard and without considering the submissions and evidences filed by the assessee and in violation of principles of natural justice. 3.00 That without prejudice to the other grounds, Ld. CIT(A) has erred in law andon facts in not granting the benefitof cash sales and debtors realization. The Appellant disputes the quantum, as highly excessive and uncalled for. 4.00 That without prejudice to the other grounds, Ld. CIT(A) has erred in law andon facts in not deciding the case on the basis of well settled peak theory and failed in confining the addition to the peak balance. The Order of Ld. CIT (A) is arbitrary based on extraneous considerations, devoid of facts on record, against principles of justice and against the Trite Law therefore illegal, erroneous, perverse and thus uncalled for.

5.00 That in any case and in any view of the matter, action of Ld. CIT(A) in not quashing the impugned order passed by Ld. AO and not deleting the impugned addition made therein is illegal, bad in law, unjustified and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 6.00 That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A and 234B of Income Tax Act, 1961.

ITA 5366/Del/2014 Assessment year 2009-10

7.00 That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

2.

At the outset, ld. AR drew our attention to the fact that the assessment order dated 20.12.2011 had been framed u/s 144 of the Act. It was submitted that the assessment was completed at Rs. 92,95,850/- as against the returned income of Rs. 1,48,852/- and thus, it was a very high pitched assessment wherein the entire deposits of Rs. 91,47,000/- as deposited in the various bank accounts of the assessee were added to the income of the assessee. It was also submitted that adequate opportunity was not accorded to the assessee to explain cash deposits along with the relevant documentary evidence. It was submitted that the file may be restored to the office of the Assessing Officer so that the assessee gets reasonable opportunity to explain the various cash deposits.

3.

Learned Departmental Representative had no objection to the case being remanded.

4.

We have perused the record and have also heard the rival submissions. A perusal of the assessment order shows that the initial notice u/s 143(2) of the Act was issued on 14.9.2010 fixing ITA 5366/Del/2014 Assessment year 2009-10 the case for 20.9.2010. Again, another notice u/s 143(2) was issued on 24.09.2010 fixing the date for 29.09.2010. Notice u/s 142(1) dated 10.01.2011 was issued fixing the date for 21.01.2011 and another notice u/s 142(1) dated 2.2.2011 was issued fixing the date for 15.02.2011. It is further noted in the assessment order that fresh notices u/s 143(2) and 142(1) were issued on 11.3.2011 fixing the date for 25.3.2011. Another notice u/s 142(1) was issued on 2.9.2011 fixing the date for 9.9.2011.

Thus, it is seen that notices were issued to the assessee giving a very small time gap for compliance. Further, the dates when these notices were despatched from the office and were actually served upon the assessee are also not evident from the assessment order. In such circumstances, we agree with the contentions of the ld. AR that the assessee was not afforded proper opportunity to present the relevant details/documents.

Therefore, in the interest of justice, we restore the issue to the file of the Assessing Officer to decide the matter afresh after giving the assessee proper opportunity to present his case. We also direct the assessee to fully cooperate with the assessment proceedings.

ITA 5366/Del/2014 Assessment year 2009-10

5.

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

The order is pronounced in the open court on 20th September, 2017.

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