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Facts
The assessee filed an appeal against an order dated 22.03.2024 passed by the Addl. / JCIT (A)-7, Kolkata for Assessment Year 2017-18. The assessee claimed that no real opportunity was granted during assessment proceedings and the CIT(A) disposed of the appeal arbitrarily. The assessee also alleged that the AO erred in confirming additions of Rs 14,18,387.00 and Rs 4,97,762.00.
Held
The Tribunal observed that the assessee claimed not to have received notices from the Assessing Officer, leading to an ex-parte order. The Tribunal found that in the interest of justice, the assessee should be given an opportunity to present evidence and submissions. Therefore, the case was remanded back to the Assessing Officer for a de novo assessment.
Key Issues
Whether the assessee was denied a fair opportunity to present their case during the assessment proceedings due to non-receipt of notices, and if the additions made by the AO and confirmed by the CIT(A) were justified.
Sections Cited
69A, 44AD, 143(2), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘DIVISION BENCH’, AMRITSAR
Before: SHRI UDAYAN DAS GUPTA & SHRI KRINWANT SAHAY
आदेश/Order
Per Krinwant Sahay, AM: Appeal in this case has been filed by the Assessee against the order dated 22.03.2024 passed by the Addl. / JCIT (A)-7, Kolkata for A.Y. 2017-18. 2. Grounds of appeal are as under: -
282-Asr-2024 Bashir Ahmad Wani, Shopian 2
The assessment is bad in law, as no real opportunity was granted to appellant during the year assessment proceedings & Ld. CIT(A) disposed the appeal in an arbitrary manner and without adjudicating grounds of Appeal,
The Ld.AO erred in both facts & laws by confirming additions of Rs 14,18,387.00 u/s 69A of the Act, on account of entire cash deposits during demonization period, as entire cash deposits is accounted in the books of the appellate & represent sales and collection from customers in ordinary course of business.
3. The Ld. AO erred in both facts & laws by making an addition of Rs 4,97,762.00 by applying net profit rate of 8% on balance bank credits, when the assesses profits are comparatively very low.
That the assessment is based on mere presumptions and conjectures.
5. The appellant craves leave to add, amend, modify, withdraw any ground of appeal at the time of hearing and before the appeal is disposed off.
6. Therefore it is prayed, that the aforesaid additions made may please be deleted in full.
Brief facts of the case, as per the order of the Addl. CIT(A) are as under: -
282-Asr-2024 Bashir Ahmad Wani, Shopian 3
“The appellant is an individual and derives income from business. The Assessee has not filed return of income for the A.Y.2017-18. The case was selected for scrutiny. Notice u/s 143(2) of the Act, was issued and duly served. The Assessing Officer passed the order u/s 144 Dated 22.12.2019, making addition of Rs.19,16,150. Being aggrieved with the above, the appellant is an appeal against the said order u/s 144 of the Act.”
3. Aggrieved with this order, the Assessee filed an appeal before ld. CIT(A) on different grounds. The Addl. CIT(A) has considered the observations made by the A.O. which are as under:-
"The assessee failed to furnish any details relating to business activities undertaken by the assessee, nature of Income earned, details of deposits into his bank accounts, however, considering the facts that the assessee had maintained current/cash credit account, generally associated with business activities, the nature of transactions carried out by the assessee through his bank account, it may be presumed that the assessee might have been engaged in some business activities and therefore, the credits into the bank account excluding the cash deposits during the demonetisation period are considered business receipts.
282-Asr-2024 Bashir Ahmad Wani, Shopian 4
As the assessee did not furnish any explanation, the nature of business cannotbe ascertained but keeping in view the provisions of section 44AD and other facts and circumstances of the case, a rate of 8% seems reasonable in my opinion, which may be higher than 8% depending upon the nature of business. Hence, a rate of 8%is applied to the total deposits into the bank accounts of the assessee excluding the cash deposits during the demonetisation period. Consequently, applying a rate of 8%on 6222036/- (on total credits excluding cash deposits during demonetization during the year under consideration) income from the said credits comes out to beRs.497762-/.
With regard to cash deposits during demonetisation, the assessee did not furnish any information whatsoever…”
4. The Addl. CIT(A) has confirmed the order of the Assessing Officer by dismissing the appeal of the Assessee. Against that order of the Addl. CIT(A), the Assessee is in appeal before the Tribunal.
During the proceedings before us, the ld. Counsel for the Assessee has stated that the Assessing Officer issued notices to the 282-Asr-2024 Bashir Ahmad Wani, Shopian 5 Assessee through mail and post but the same were never received by the Assessee, therefore, there was no compliance by the Assessee before the A.O. Regarding service of notice through mail, it is apparent from the portal that only notices were uploaded on system and not sent by any mail. So, whatever findings has been given by the Assessing Officer in the assessment order, the same has been confirmed by the Addl. CIT(A).
6. The ld. DR relied on the order of the Addl. CIT(A).
We have considered the findings given by the Assessing Officer in his ex-parte order and the order of the Addl. CIT(A) on the issues raised by the Assessee before him. We find that as claimed by the Counsel of the Assessee since the Assessee did not receive any notice, therefore, he had no occasion to put the facts before the A.O.
So, whatever information the Assessing Officer had, he had passed an ex-parte order and the same has been confirmed by the Addl.
CIT(A). We are of the view that in the interest of justice, the Assessee should get an opportunity to bring evidence on file and 282-Asr-2024 Bashir Ahmad Wani, Shopian 6 submit the documents in support of his submissions and based on that, the Assessing Officer should pass a speaking order.
Accordingly, we remand this case back to the Assessing Officer for passing an order de novo, in accordance with law, on affording due and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the A.O.
All pleas available under the law shall remain so available to the assessee. Ordered accordingly.
In the result, appeal is allowed for statistical purposes.
Order pronounced on 15.01.2025