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Facts
The assessee, an individual, did not file a return of income. Based on information of cash deposits in bank accounts, the Assessing Officer (AO) reopened the assessment under Section 147 and made an addition of ₹96,87,718/- under Section 144. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal found a contradiction in the CIT(A)'s order regarding the admission of additional evidences and the pendency of remand proceedings. The Tribunal noted that the CIT(A) stated no remand report was available or additional evidences were filed, despite evidence to the contrary presented by the assessee.
Key Issues
Whether the CIT(A) erred in upholding the addition made by the AO without properly considering the additional evidences and the pending remand proceedings, thereby violating principles of natural justice.
Sections Cited
144, 147, 133(6), 68, 234A, 234B, 234C, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI RAHUL CHAUDHARY, JM Shri Jitendra Singh (Adv.)
This appeal is filed by assessee against the appellate order passed by National Faceless Appeal Centre, Delhi [the learned CIT (A)] for A.Y. 2013-14, dated 5th July, 2023, wherein the appeal filed by the assessee against the assessment order under Section 144 of the Income-tax Act, 1961 (the Act) dated 17th December, 2016, passed by the ITO Ward, 25(3)(3), Mumbai, was dismissed.
Assessee is in appeal against that appellate order raising following grounds of appeal:-
2. Appellate Order passed without providing an appropriate opportunity of being heard is bad in law (i) The Ld. CIT(A) erred in passing the impugned order without providing the Appellant an appropriate opportunity of being heard. Hence, the impugned order passed by the Ld. CIT(A) is in gross violation of principals of natural justice and the same may be quashed.
(ii) The Ld. CIT(A) failed to appreciate that the Appellant had moved an application under Rule 46A before the Ld. CIT(A)-37, Mumbai and the same was referred to the Ld. A.O. for his comment / remand report. Hence, the Ld. CIT(A) was not justified in passing the impugned assessment order in undue haste without providing the Appellant an opportunity to substantiate his claim. Thus, the impugned
Addition by treating the deposits in the bank accounts as unexplained cash credit under section 68 of the Act is unjustified-96,87,720/- (1) The Ld. CIT(A) erred in upholding the action of the Ld. A.O. in treating the deposits in the bank account of the Appellant totaling to Rs.96,87,720/- as unexplained cash credit invoking the provisions of section 68 of the Act without appreciating the fact that the amount was deposited from the withdrawals made from the known sources. Thus, treating the deposits as unexplained cash credit under section 68 of the Act is unjustified and the same may be deleted.
(ii) The Ld. CIT(A) further failed to appreciate that the provisions of section 68 of the Act is not applicable to the facts of the present case as the Appellant is not maintaining any books of account and bank statement cannot be considered as books of accounts. Hence, the credits shown in the bank statements cannot be treated as unexplained cash credit invoking the provisions of section 68 of the Act. The Appellant, therefore, humbly prays that the addition of Rs.96,87,720/- made under section 68 of the Act may be deleted.
The learned Authorized Representative submitted that before the learned CIT (A) when it was in physical mode and before migration to National Faceless Appellate Centre, assessee submitted the complete details before the learned Commissioner of Income-tax (Appeals). There was a petition under Rule 46A for admission of additional evidences. Such details are filed on 21st May, 2018. Such additional evidences were admitted by the ld CIT (A) and directed the assessee to submit remand report. It was further stated that the assessee has appeared before the learned Assessing Officer during the course of remand proceedings. Such remand proceedings was on occasion of admission of the additional evidences by the learned CIT (A). Such remand report was also awaited. Meanwhile, the appeal was migrated to National Faceless Appeal Centre and this appeal was dismissed by the National Faceless Appeal Centre. It was further submitted that the learned CIT (A) neither considered the additional evidences and nor the remand report.
On the merits it was submitted that assessee has given complete information about the total deposits of ₹96,87,718/- in the remand proceedings. Therefore, the addition made by the learned Assessing Officer and its confirmation by the learned CIT (A) is not proper.
We have carefully considered the rival contentions and perused the orders of the lower authorities. The assessee did not file its return of income under Section 139(1) of the Act. Based on ITS information, the learned Assessing Officer came to know that assessee has deposited sums into various bank accounts and therefore, valid and proper notices were served for reopening of the assessment. The assessee was also issued several notices during the course of assessment proceedings but no information on merit was submitted. Thus, the addition was made. On appeal filed by the assessee before the learned CIT (A), assessee made an application for admission of additional evidences under Rule 46A of the Income Tax Rules, on 21st May, 2018. An acknowledgement to the same was filed before us. Based on this information assessee produced e- 19th proceedings response acknowledgement dated October, 2022, wherein the assessee submitted that last matter was heard by learned CIT (A)-37 and petition under Rule 46A of the Act was submitted for admission of additional evidences. The learned CIT (A) admitted the same and sent the matter to the learned Assessing Officer for the remand report. The assessee appeared before the learned Assessing Officer in the remand proceedings. Assessee submitted an acknowledgement dated 13th
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 05.01.2024.