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Facts
The assessee appealed against the CIT(A)'s order which upheld additions made by the AO, including unexplained cash credit of Rs.18.44 Crores, estimated commission income of Rs.4.53 Crores, and unexplained proprietor's capital of Rs.49 lakhs. The CIT(A) dismissed the appeal due to the assessee's non-appearance and lack of submissions at the appellate stage.
Held
The Tribunal, noting that the assessee had made submissions at the assessment stage but not before the CIT(A), remitted the appeal back to the CIT(A) for a de novo meritorious adjudication, ensuring principles of natural justice. The assessee was directed to be diligent in attending future hearings.
Key Issues
Lack of opportunity of hearing at CIT(A) level; Validity of additions for unexplained cash credit, estimated commission, and unexplained capital introduction.
Sections Cited
143(3), 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2023-24/1061046665(1), dated 16.02.2024 passed against the assessment order by Income Tax Officer, Ward 19(3)(1), Mumbai, u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 30.12.2019 for Assessment Year 2017- 18.
Rishabh Chhaganlal Shah, AY 2017-18
Grounds taken by the assessee are reproduced as under:
1. “On the facts and in the circumstances of the case and law on the subject, the appellant prays that the Ld.CIT(A) erred in not providing opportunity sufficient of hearing before upholding the action of learned Assessing officer. In view of the above the order be held as illegal having been passed in contravention of principles of natural justice.
2. On the facts and in the circumstances of the case and law on the subject, the learned Income Tax officer erred in making addition of Rs.18,44,75,000/- by treating cash deposit which has been made out of cash sales as unexplained cash credit u/s 68 r.w.s 115BBE of the Income Tax Act, 1961 & the learned CIT (Appeals) erred in confirming the additions Rs.18,44,75,000/- of and upholding the actions of the ld. AO without correct appreciation of the facts and law on the subject. In view of the facts and circumstances of the case and law on the subject, the same may be deleted.
On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in making estimated additions Rs.4,53,83,697/- of as commission income being 4% of total sales made during the year & the learned CIT (Appeal) erred in upholding same without correct appreciation of facts and law on the subject.
In view of the facts and circumstances of the case and law on the subject, the same may be deleted.
4. On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in disallowing at Rs.49,00,000/- on account of introduction of proprietor's capital treating it as unexplained cash & the learned CIT (Appeal) erred in confirming addition of Rs. 49,00,000/- on account of introduction of proprietor's capital, without correct appreciation of facts and law on the subject.
In view of the facts and circumstances of the case and law on the subject, the same may be deleted.”
3. In ground no.1, assessee has prayed that sufficient opportunity of hearing has not been given to the assessee and the order has been passed in contravention of principles of natural justice. In reference to this ground of appeal taken by the assessee, order of ld. CIT(A) was perused. From the said perusal, it is noted that ld. CIT(A) proceeded to Rishabh Chhaganlal Shah, AY 2017-18 adjudicate upon the matter since assessee did not make any submission to represent his case. He passed the order on the basis of the material available on record by taking note of the observations made by the ld. Assessing Officer in the impugned assessment order, to uphold the additions made therein. The addition made by the ld. Assessing Officer relates to deposit of cash in the bank account of Rs.18,44,75,000/- treated as unexplained cash credit u/s.68 r.w.s. 115BBE. Second addition relates to estimated addition of Rs.4,53,83,697/- as commission income, being 4% of total sales made during the year and third being disallowance of Rs.49,00,000/- towards introduction of proprietor’s capital treating it as unexplained cash credit. From para 4.1 of the order of ld. CIT(A), we note that two notices were issued on 29.11.2023 and 10.01.2024. After these notices which remained uncompiled, the impugned first appellate order was passed dismissing the appeal of the assessee.
Considering the facts on record, whereby assessee had made his submissions at the assessment stage which could not be furnished at the first appellate stage, in the interest of justice and fair play, we find it appropriate to remit the appeal back to the files of ld. CIT(A) for denovo meritorious adjudication of the grounds of appeal taken by the assessee at the first appellate stage. Assessee is at liberty to furnish details and documents, if he so requires, to substantiate his claim.
5. While remitting the matter back to the file of ld. CIT(A), we note that there are lapses on the part of assessee of not attending any of the hearings, for which ample opportunities were given. We thus, direct the assessee to be diligent in attending the hearings before the Ld. CIT(A)
Rishabh Chhaganlal Shah, AY 2017-18 for expeditious disposal of the matter and not to seek adjournments unless warranted by compelling reasons.
In the result, appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 18 July, 2024