RAHUL JAIN,INDORE vs. ITO WARD-1, MORENA, MORENA

Briefly stating, the facts are that the assessee did not file any return of income for A.Y. 2017-18. Based on the information gathered by department, the Assessing Officer noticed that the assessee had deposited cash to the tune of Rs.12,63,000/- in his SBI, Porsa Bank account No. 630247836544 maintained with State Bank of India during demonetization period (from 9th November, 2016 to 30th December, 2016). Statutory notice u/s. 142(1) of the Act was issued to the assessee on various occasions, but the assessee failed to furnish the required details/reply. After examining the bank statements furnished by the concerned bank in response to notice u/s. 133(6), the Assessing Officer calculated the cash deposit and/or credits made during the F.Y. 2016-17 at Rs.74,62,000/- in the aforesaid account of the assessee. Thereafter various statutory notices u/s. 142(1) and show cause notice, as tabulated by Assessing Officer at page 5 of the assessment order, were also issued to the appellant assessee, requiring him to explain the source and nature of cash deposits and credits in the said bank account, but no compliance was made on behalf of the assessee. Assessing Officer, thus, made addition of Rs.74,62,000/- as unexplained money u/s. 69A r.w.s. 115BBE of the Act. The Assessing Officer further noticed that an amount of Rs.6,75,000/- was credited in 3 | P a g e assessee’s bank account by way of RTGS/FEGT etc. during F.Y. 2016-17, which was treated as business receipts of assessee and profit on such receipts @ 6% amounting to Rs.40,500/- was added as business income of the assessee. Accordingly, total income of assessee was assessed at Rs.75,02,500/-, vide assessment order dated 06.12.2019 passed u/s. 144 of the Act.

Aggrieved, assessee preferred an appeal before learned CIT(Appeals), who dismissed assessee’s first appeal ex parte for want of any submission made by assessee in the first appellate proceedings.

Assessee has approached this Tribunal in second appeal on the ground, in addition to others, that the impugned order is not sustainable, having been passed against the principles of natural justice and fair play.

Perused the records. None is present on behalf of the assessee.

Perusal of the impugned order shows that the ld. CIT(Appeals) had issued various notices on 15.04.2024, 24.04.2024, 03.05.2024, 10.05.2024, 21.05.2024, 30.05.2024 and final show cause notices on 03.07.2024 and 23.08.2024, but the assessee did not file any submission before the first appellate authority. It is however, noticed that the learned CIT(Appeals) has 4 | P a g e decided assessee’s appeal ex parte without any substantial discussion on merits, whereas learned CIT(Appeals) was expected to state the points for determination, decision thereon and the reasons for the decision as provided u/s. 250(6) of the Act. We further note that the Assessing Officer has also made best judgment assessment u/s. 144 of the Act, as no response was filed by appellant assessee in compliance to various notices issued by Ld. Assessing Officer. Such a non-responsive and reluctant attitude of the assessee cannot be appreciated. In the totality of facts and circumstances of the case, we deem it just and appropriate to remit the matter back to the file of Assessing Officer for passing order afresh after affording proper opportunity of hearing to the assessee. We further direct the assessee to be diligent and cooperative in attending the proceedings and making submissions before the learned Assessing Officer explaining cash deposits/credits in his bank account, for the expeditious and effective disposal. Needless to say that learned Assessing Officer shall ensure the observance of the principles of natural justice. The appeal is, thus, liable to be allowed for statistical purposes.

Since the issue relating to the quantum addition has been remanded back to the file of the learned Assessing Officer for fresh adjudication, and 5 | P a g e as the present appeal pertains to the penalty imposed under section 271AAC(1) of the Act, which is consequential to the said quantum addition, we consider it appropriate to remit this penalty matter also to the file of the learned Assessing Officer for passing order a fresh in accordance with law.