EFY THECHNOLOGIES,JAIPUR vs. INCOME TAX OFFICER WD 5(4), JPR, JAIPUR
Facts
The assessee-appellant had appealed to the CIT(A) against an assessment order that added Rs. 1,49,25,000/- under Section 69A of the Income Tax Act, 1961, as unexplained money for Assessment Year 2017-18. The CIT(A) dismissed the appeal, holding that it was not admissible because the assessee had not filed a return of income and offered no valid explanation for non-compliance. The assessee contended that they were not involved in any business activities during the relevant financial year and therefore, no return was furnished.
Held
The appellate authority observed that the assessee's claim of not engaging in business activities and the subsequent non-filing of returns needed to be examined with evidence. The CIT(A)'s dismissal based solely on Section 249(4)(b) without considering the assessee's primary contention was found to be erroneous. The departmental representative had no objection to remanding the matter.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without considering the assessee's claim of non-involvement in business activities and the reasons for not filing the return of income. Whether a remand for fresh adjudication with an opportunity to produce evidence was warranted.
Sections Cited
249(4)(b), 69A, 144, 115BBE, 271AAC, 272A(1)(d), 271F, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 1226/JPR/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “A” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 1226/JPR/2024 fu/kZkj.k o"kZ@Assessment Year : 2017-18 cuke EFY Technologies Income Tax Officer, Vs. K 22 Malviya Marg, C- Scheme, Ward 5(4), Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFFE 5353 D vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Ashok Kumar Gupta, Adv. & Sh. Puneet Pareek, Adv. jktLo dh vksj ls@ Revenue by : Mrs. Anita Rinesh, JCIT-Sr. DR lquokbZ dh rkjh[k@ Date of Hearing : 12/12/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 16/12/2024
vkns'k@ ORDER
PER:NARINDER KUMAR, JUDICIAL MEMBER On 09.08.2024, Commissioner of Income Tax (Appeal) (in short ‘CIT(A)’) /NFAC, Delhi passed order u/s 250 of Income Tax Act, 1961 (in short ‘Act’), relating to the Assessment Year 2017-18 thereby dismissing the appeal filed by the assessee-appellant herein, while observing that appeal was not admissible.
2 ITA No. 1226/JP/2024 EFY Technologies 2. As per impugned order, ld. CIT(A) observed that the
appellant had not filed any return of income and also not paid any
amount equal to the amount of advance payable by the assessee.
In this regard, reference was made to the provisions of section
249(4)(b) of the Act.
Ld. CIT(A) further observed that the appellant having not
furnished any substantial cause or valid reason for non-compliance
of the abovesaid mandatory requirement, the appeal was not
admissible.
Accordingly, the appeal came to be dismissed.
For ready reference, it may be mentioned that assessee had
challenged before ld. CIT(A), the assessment order dated
02.12.2019, whereby an addition, u/s 69A of the Act, to the tune of
Rs. 1,49,25,000/- was made while framing assessment u/s 144 of
the Act by observing at page 17 as under:-
“1. The assessee has made cash deposits amounting to Rs 16,50,000/- other Credit entries appearing in bank account of Rs 1,32,75,000/- thereby total amounting to Rs 1,49,25,000/- (above table:4) appearing in the PNB Bank Account of the assessee firm in the FY 2016-17 relevant to A Y: 2017-18 remained unexplained. The assessee firm has not filed ITR, not declared its true income and has not paid taxes due thereon. The assessee firm has not responded to notices u/s 142(1) and show-cause notices issued during e- assessment proceedings as discussed above. The assessee firm failed to give any explanation about the nature and source of cash deposits, hence the value of Credit entries, including Cash deposits of Rs 1,49,25,000/- appearing in the PNB Bank Account as tabulated in the body of the Order (as per above
3 ITA No. 1226/JP/2024 EFY Technologies table) is deemed as unexplained money u/s 69A of the Income Tax Act, 1961 and added to the Total Income of the assessee. The Total Income assessed is taxed u/s 115 BBE of the Act at the rate of 60%.
Further, penalty proceedings u/s 271 AAC of the Act in respect of unexplained income is initiated. As discussed in the body of the Order, the assessee firm has failed to comply with the notices u/s 142(1) of the Act issued and served upon the assessee during the course of E-scrutiny proceedings, penalty u/s 272A(1)(d) of the Act is also initiated. The assessee has not filed its Return of Income for AY 2017-18, therefore, penalty u/s 271F of the Act is also initiated for failure to furnish return of income.
Subject to the above discussion, Total Income of the assessee is assessed u/s 144 of the Act as under:
Returned Income Nil (ITR not filed) Add: Addition u/s 69A as discussed Rs. 1,49,25,000/- above paras. Rs. 1,49,25,000/-
Arguments heard. File perused.
The only contention raised by ld. AR for the appellant is that
during Financial Year 2016-17 and even prior thereto i.e. in the F.Y
2015-16, the assessee firm did not indulge in any business
activities, and that is why, no income tax return was furnished, and
that ld. CIT(A) erred in dismissing the appeal while resorting to
provisions of section 249(4)(b) of the Act, without taking into
consideration said claim of the assessee-appellant.
In the given situation, ld. AR for the appellant has submitted
that the impugned order deserves to be set aside and matter be
4 ITA No. 1226/JP/2024 EFY Technologies remanded to the Assessing Officer, particularly when additional
evidence was sought to be produced and relied on in support of
the claim that the assessee could not support any business
activities, but said request was rejected by CIT(A).
Ld. DR for the department has no objection to the remand of
the matter to the Assessing Officer for decision afresh by providing
reasonable opportunities to the assessee so as to enable the
assessee to produce all the relevant material in support of its
claim.
On going through the assessment order dated 2.12.2019, we
find that notices u/s 142(1) of the Act are recorded to have been
issued to the assessee to seek its response as regards deposit of
cash (SBN) to the tune of Rs. 13,50,000/- during the period of
09.11.2016 to 30.12.2016, and as to why the said firm had not filed
any income tax return.
As is available from the assessment order, the assessee did
not submit any response to notices u/s 142(1) of the Act and
accordingly, the Assessing Officer proceeded further and
completed the assessment u/s 144(1) raising demand of Rs.
1,49,25,000/-.
5 ITA No. 1226/JP/2024 EFY Technologies 8. As regards non-participation in the assessment proceedings,
assessee claimed before ld. CIT(A) that no reasonable opportunity
was was provided by the Assessing Officer to the appellant of
being heard and the assessment proceedings were completed
within a period of 5 months, and as such assessee could not
furnish all the requisite documents to support its claim and explain
the deposit.
As is available from the impugned order passed by ld.
CIT(A), assessee sought to produce certain evidence, in the
Appellate proceedings, in the form of a paper book alleging that
the additional evidence was relevant. Learned CIT(A) rejected the
prayer for taking on record the additional evidence.
As noticed above, ld. CIT(A) dismissed the appeal while
resorting to provisions of section 249(4)(b) of the Act. In the given
facts and circumstances, when the claim of the assessee was that
no business activities were done by the assessee in the year under
consideration, and as such there was no question of deposit of any
advance tax of filing of any return, said question could be
determined only after going through the evidence sought to be
produced by the assessee. It is true that the assessee did not
6 ITA No. 1226/JP/2024 EFY Technologies appear before the Assessing Officer what to say of submitting any
reply or evidence in the assessment proceedings. Before us, it has
not been claimed by the assessee that the assessee firm was not
aware of the assessment proceedings initiated after service of
notice u/s 142(1). This goes to show casual approach of the
assessee in the assessment proceedings.
In the given facts and circumstances, in view of the
submission of ld. AR for the appellant and ld. DR for the Revenue,
we find that this is a fit case for being remanded to the Assessing
Officer. Result
As a result, this appeal is disposed of for statistical purposes
and the matter is remanded to the Assessing Officer with the
directions to adjudicate afresh, as regards framing of assessment
for the year under consideration while providing reasonable to the
assessee of being heard.
The assessee is also burdened with costs of Rs. 6,000/- (six
thousands) only to be deposited in Prime Minister’s National Relief
Fund. The assessee shall produce receipt before the Assessing
7 ITA No. 1226/JP/2024 EFY Technologies Officer, before he commences the assessment proceedings on
remand.
Assessee is directed to appear before Assessing Officer.
File be consigned to the record room after the needful is
done by the office.
Order pronounced in the open court on 16/12/2024
Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼ujsUnz dqekj½ (RATHOD KAMLESH JAYANTBHAI) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur fnukad@Dated:- 16/12/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- EFY Technogies, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward 5(4), Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 1226/JP/2024} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत
