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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of order passed by NFAC, Delhi dated 11.08.2023 for A.Y. 2014-15 on following grounds of appeal:
“General Ground 1. The orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi under section 250 of the Act and the National Faceless Assessment Centre, Delhi under section 147 rws 144 rws 144B are bad in law and liable to be quashed. Ex-Parte order passed by CIT(A) is bad in law 2. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi erred in passing the order under section 250 of the Act without providing proper opportunity of hearing and without adjudicating on merits of the case.
3. On facts and circumstances of the case and law applicable, the order passed by the learned CIT(A), NFAC is bad in law and liable to be quashed. Assessment order passed under section 147 rws 144 rws 144B without providing proper opportunity of hearing is bad in law 4. The National Faceless Assessment Centre, Delhi (NFAC) erred in passing the assessment order under section 147 rws 144 rws 144B without allowing the appellant to file the details on 24.3.2022 by disabling or locking the submit response option in the efiling portal.
The NFAC erred in not appreciating that the appellant had filed an adjournment request for filing the details on or before 24.3.2022 for medical reasons of the authorised representative.
On facts and circumstances of the case and law applicable, the assessment order passed without allowing to file the details is in violation of the principles of natural justice, bad in law and liable to be quashed. Non issue / service of notice under section 148 dated 26.3.2021 7. The NFAC has erred in passing the assessment order without issuing / serving the notice under section 148 dated 26.3.2021 on or before 31.3.2021. The impugned assessment order passed is thus invalid, bad in law and liable to be quashed. Addition for credit card payments of Rs. 33,37,261
Without prejudice, the NFAC has erred in making an addition for credit card payments of Rs. 33,37,261. The NFAC erred in not appreciating that these payments were made out of income earned during earlier years mainly AY 2010-11, savings made in FDs and meagre taxable income for the year under consideration. The impugned conclusion that the assessee has made payment of the above amount from his unaccounted money is factually erroneous. On facts and circumstances of the case and law applicable, the addition made for credit card payments of Rs. 33,37,261 is bad in law and liable to be deleted. Addition for purchase of immovable property for Rs. 2,02,00,000 9. Without prejudice, the NFAC has erred in making an addition for purchase of an immovable property for Rs. 2,02,00,000. The NFAC erred in not appreciating that during the AY 2010-11, the appellant earned long term capital gains against which exemption was claimed under section 54 for making investment in a new residential house and the said house was registered on 20.7.2013. The impugned conclusion that the assessee has made payment of the above amount from his unaccounted money is factually erroneous. On facts and circumstances of the case and law applicable, the addition made for purchase of an immovable property for Rs. 2,02,00,000 is bad in law and liable to be deleted. Addition for time deposit of Rs. 12,94,108 10. Without prejudice, the NFAC has erred in making an addition for time deposit of Rs. 12,94,108 without appreciating the fact that during the year, there was a redemption of FD made in an earlier year and the appellant received FD redeemed principal amounting to Rs. 12,94,108. This has been wrongly treated as FD made during the year by the NFAC. The impugned conclusion that the assessee has made payment of the above amount from his unaccounted money is factually erroneous. On facts and circumstances of the case and law applicable, the addition made for time deposit of Rs. 12,94,108 is bad in law and liable to be deleted. TDS credit 11. Without prejudice, the NFAC has erred in not allowing TDS credit of Rs. 15,878 even though FD interest income of Rs. 1,58,781 has been added as income from other sources. On facts and circumstances of the case and law applicable, TDS credit of Rs. 15,878 should be allowed.
Addition for short term capital gains on sale of shares 12. Without prejudice, the NFAC has erred in making addition for short term capital gains on sale of shares amounting to Rs. 1,47,371. On facts and circumstances of the case and law applicable, the addition made for short term capital gains on sale of shares amounting to Rs. 1,47,371 is bad in law and liable to be deleted. Levy of interest under section 234A and 234B 13. The learned NFAC erred in levying interest under section 234A and 234B of the Act. On facts and circumstances of the case and law applicable, interest under section 234A and 234B of the Act is not leviable. The appellant denies its liability to pay interest under section 234A and 2348 of the Act. Prayer 14. In view of the above and other grounds to be adduced at the time of hearing, the appellant prays that the assessment order passed by the NFAC and the CIT(A) order passed by the NFAC be quashed or in the alternative, the above grounds of appeal including the relief prayed thereunder be allowed. The appellant prays accordingly. The Appellant submits that each of the above grounds/ sub-grounds are independent and without prejudice to one another. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Income-tax Appellate Tribunal to decide the appeal according to law. The appellants accordingly.”
Brief facts of the case are as under: 2.1 The assessee did not file its return of income for the A.Y. 2014-15. Subsequently the case was reopened u/s 147 by issuing notice u/s 148 on 26.03.2021 as per information available with Ld.AO. The Ld.AO vide order dated 30.03.2022
Page 5 of Rs.33,37,261/- on account of unexplained source of credit card payments, of Rs.2,02,00,000/-; on account of unexplained investment in immovable property, of Rs.12,94,108/-; on account of unexplained time deposits, of Rs.1,58,781/-; on account of unexplained income from other sources and of Rs.1,47,371/- on account of Short Term Capital Gain. Aggrieved by the order of the Ld.AO, the assessee preferred an appeal before the Ld.CIT(A).
2.2 Before the Ld.CIT(A), following notices were issued. Date of Notice S. No. Compliance Date Remarks Sent Issued Enablement of Communication 1. 16.11.2022 - Window. No response from the appellant No response from the 2. 13.01.2023 30.01.2023 appellant No response from the 3. 02.02.2023 17.02.2023 appellant No response from the 4. 20.07.2023 04.08.2023 appellant
The aforesaid non compliances revealed beyond doubt that the assessee has nothing to say in the matter of present appeal before NFAC. Thus, since it appeared that the assessee is not interested in prosecution of the present appeal, the NFAC observed that the same is liable to be dismissed on this ground itself. The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known dictum "VIGILATIBUS;
Page 6 of NON DORMENTIBUS, JURA SUBVENIUNT. Considering the facts and relying on the decision of Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukoji Rao Holker Vs. CWT reported in (1997) 223-ITR-480, the NFAC observed that, the present appeal is liable to be dismissed.
Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before this Tribunal.
We have heard the rival submissions and perused the materials available on record. In our opinion, the assessment order was passed u/s 144 of the Act and also there was no proper reply before NFAC. Hence, the addition has been sustained by the ld. CIT(A).
4.1 In our opinion, by non-representing before lower authorities, assessee has not derived any benefit otherwise the assessee suffered in view of the dragged litigations. In our opinion, the assessee was deprived of proper advice after filing the return of income. As such, assessee failed to represent before the Ld.AO as well as before NFAC to give proper reply before NFAC and the assessee has not derived any benefit by not representing before lower authorities. Being so, in our opinion, it is appropriate to remit the issues in dispute to the file of the Ld.AO for fresh consideration. The assessee is directed to file all relevant documents in support of the claims, which shall be verified by the Ld.AO in accordance with law. Needless to say
Page 7 of that proper opportunity of being heard must be granted to the assessee. Ordered accordingly.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 30th January, 2024.