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Facts
The assessee filed an appeal against an order related to assessment year 2009-10. The case involved an unsecured loan of Rs. 33,48,500 advanced by the assessee to Shri Pratap Singh Tanwar, which was treated as an unexplained cash credit and added to the assessee's income. Further additions were made for a DD of Rs. 500 and cash deposits totaling Rs. 9,40,000.
Held
The Tribunal noted that the assessee failed to provide proper explanation or evidence during appellate proceedings before the lower authorities. The lower authorities also found non-compliance and lack of cooperation from the assessee. Due to these procedural lapses and lack of substantive evidence from the assessee's side, the Tribunal found no reason to interfere with the lower authorities' orders.
Key Issues
Whether the additions made to the assessee's income on account of unsecured loan, DD, and cash deposits were justified, and whether the procedural non-compliance by the assessee warrants dismissal of the appeal.
Sections Cited
144, 147, 148, 142(1), 271(1)(c), 271B, 271F
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 36/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 36/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2009-10 cuke Anil Kumar Tanwar ITO, Vs. Shop No. 27, Sector 8, Bhiwadi Bhiwadi, Bhiwadi UIT Colony, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADTPT 4403 C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P C Parwal (CA) jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 12/02/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 14/02/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 20/11/2023 [here in after (NFAC)/ ld. CIT(A) ] for assessment year 2009-10 which in turn arise from the order dated 22.02.2016 passed under section 144 r.w.s 147 of the Income Tax Act, by ITO, Ward- Bhiwadi, Alwar.
In this appeal, the assessee has raised following grounds: -
2 Anil Kumar Tanwar vs. ITO “1. Under the facts and circumstances of the case the assessee has submitted the document before NFAC/ Commissioner of Income Tax (Appeals), but the NFAC has failed to consider it and passed the order on dated 20.11.2023 and dismiss the appeal which deserved to be accepted.
2. Under the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeals) has erred to treat the issue of two DD's of Rs. 16,74,000 each, one DD of Rs. 500 and cash deposit of Rs. 40,000 on dated 10.09.2018 and Rs. 9,00,000 on dated 23.01.2019 in total of Rs. 42,88,500 as unexplained income, hence deserve to be deleted.
Under the facts and circumstances of the case the Income Tax Assessing officer has unlawfully issued notice u/s 148 of the Income Tax Act. The assessee has filed appeal before NFAC/ Commissioner of Income Tax (Appeals) but failed to discuss.
The assessee craves the right to add, alter or amend the Ground of Appeal.”
3. Succinctly, the fact as culled out from the records is that during the course of assessment proceedings in the case of Shri Pratap Singh Tanwar, PAN: ADAPT0047M for the A.Y. 2009-10, it was observed that the assessee, Sh. Anil Kumar Tanwar had advanced an unsecured loan of Rs. 33,48,500/- to Shri Pratap Singh Tanwar for which an addition of an equal amount was made by the AO in the hands of Shri Pratap Singh Tanwar by treating the same as unexplained cash credit. Shri Pratap Singh Tanwar preferred an appeal which was admitted and addition of Rs. 33,48,500/- was deleted with an observation that the AO may, if he so desires, pass the Tanwar, is assessed to tax.
3.1 Shri Pratap Singh Tanwar had submitted a reply received from Shri Anil Kumar Tanwar in response to a letter issued from the ld. AO during the period his case was remanded back to the AO from the CIT(A). He also filed bank-statements, copy of ITR for A.Y. 2010-11 which was irrelevant to the year under consideration and copies of DDs. In the absence of the assessee, source of loan for Rs. 33, 48, 500 /- by means of two DDs of Rs. 16,74,000/- each and one DD of Rs. 500/- could not be proved. Cash deposits of Rs. 40,000/- on 10.09.2008 and Rs.9,00,000/- on 23.01.2009 in his bank account at ICICI Bank could also be not explained. In view of the above, notice u/s 148 was issued to the assessee on 24.07.2014. No return was filed by the assessee in response to notice u/s 148. Notice u/s 142(1) was issued on 30.10.2015. No compliance was made to the notice also and there was no information about the willingness of the assessee to explain the sources of cash deposits. In view of the facts and circumstances and in the absence of any proof/explanation for such cash deposits/loans advanced, therefore an addition of Rs. 42,88,500/- made (Rs. 33,48,500 + Rs. 9,40,000/-) to the income of the assessee. appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:
“5. Observations, Findings and Decisions
5.1. The order of the Ld. AO passed u/s 144 r.w.s. 147 dated 22.02.2016 as well as the grounds of appeal and statement of facts filed by the appellant has been carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the Ld. AO regarding addition of Rs. 33,48,500/- on account of unsecured loan advanced to Shri Pratap Singh Tanwar and addition made due to unexplained DD of Rs.500/- and cash deposits of Rs.9,40,000/-.
5.2 During the course of appellate proceedings, the appellant assessee was given several opportunities vide notice of hearing/letter dated 10.02.2021, 07.11.2022, 15.09.2023, 27.09.2023 and 16.10.2023 to represent the case by uploading written submission along with supporting document(s) if any. In the letter to show cause dated 27.09.2023, an explanation was sought mentioning as to why appeal of the appellant should not be dismissed due to repeated non- compliances. However, the appellant did not avail the opportunities to counter the findings of the Ld. AO and hence appellant's reluctancy to comply to the notices leads to the presumption that he has either nothing to explain in this regard or is not interested to continue the appellate proceeding and thus has no objection at present regarding addition made by the Ld. AO in the impugned assessment order. The reason for the addition was specifically mentioned in detail in the assessment order but the appellant failed to upload any evidence or submission in support of the grounds of appeal.
5.3 It is the well-settled dictum of law "VIGILENTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT' which means the law will help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim once right she/he must be watchful of his/her rights. Only those persons, who are watchful and careful of using his/her rights, are eligible for the benefits of the law. Law confers rights on persons who are vigilant of their rights. In this connection, the various judicious decisions of the Hon'ble Courts may be cited. In the case of the Estate of Late Tukojirao Holkar vs Commissioner of Wealth Tax (1997) (223 ITA 480 MP) the Hon'ble M.P. High Court held that, "If the party, at whose
5 Anil Kumar Tanwar vs. ITO instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference." Similarly, Hon'ble Punjab & Haryana High Court in the case of New Dewan Oil Mills Vs. CIT reported in (2008) 296ITR495 (P&H) had returned the reference unanswered, since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that appeal does not mean, the mere filing of the memo of the appeal but effectively pursuing the same". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in ITA No.798 of 2009 held that a negligent appellant should not be given many opportunities just because the quantum of the amount involved is high. The necessary course of action is to draw an adverse inference, otherwise, it would amount to giving a premium to the appellant for his negligence. When the appellant is non-cooperative, it can safely be concluded that the appellant did not want to adduce evidence as it would expose the falsity and non-genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/ 2011 dated 19.12.2011) has dismissed the appeal for non-attending hearing inferring that the appellant is not effectively pursuing the appeal. 5.4 In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipol vs Union of India, Central Excise Appeal No.62 of 2009 may further be referred to wherein the Hon'ble Court clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, inherently possesses the power to dismiss the case in default.
5.5 On merits also, the appellant has no case. The main ground taken by the appellant relates to addition of Rs. 33,48,500/- on account of unsecured loan advanced to Shri Pratap Singh Tanwar and addition on account of DD of Rs.500/- and unexplained cash deposits amounting to Rs.9,40,500/-. It is seen from the assessment order that the assessee appellant had advanced an unsecured loan amounting to Rs.33,48,500/- to Shri Pratap Singh Tanwar and an addition of Rs.33,48,500/- was made by the AO in the case of Shri Pratap Singh Tanwar on account of unexplained cash credit. Shri Tanwar preferred an appeal before the CIT(A) against the addition and the CIT(A) deleted the addition observing that the AO might pass the information to the AO of the present case. In the view of the same, the case of the appellant was reopened by issuing notice u/s 148 of the I.T. Act. 1961. It is also noted from the impugned order that assessment was completed u/s 144 of the I.T. Act, 1961 and hence during the course of assessment proceedings source of loan amounting to Rs.33,48,500/- and one Demand Draft for an amount of Rs.500/- and cash deposits of Rs.40,000/- and 6 Anil Kumar Tanwar vs. ITO Rs.9,00,000/- in the bank account of the appellant maintained with ICICI Bank remained unexplained. Therefore, the Ld. AO added the entire amount of loan, unexplained DD and cash deposits totaling to Rs.42,88,500/- to the total income of the appellant.
During the course of appellate proceeding, the appellant failed to explain the grounds taken against the issues. The reason for addition was clearly mentioned in the assessment order. However, the appellant made no effort to counter the findings of the Ld. AO either by uploading relevant document(s) or explaining the matter in detail and chose to remain silent about the issue. The appellant did not comply to the departmental notices both during assessment proceedings as well as during appellate proceedings.
5.6 In view of this, I find no reason to interfere into the order of the Ld. AO and the same is upheld accordingly. Therefore, all the substantial grounds taken by the appellant are dismissed.”
As the assessee did not find any favour from the order of the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the ld. AR of the assessee, has filed the written submissions and the same is reproduced herein below.
“1. It is submitted that along with the assessment order AO initiated penalty proceedings u/s 271(1)(c), 271B and 271F against which penalties were imposed and assessee filed appeal against these penalty orders. Thus four appeals were pending before NFAC, one against quantum and three against the penalty orders. The details of these appeals are as under:- Quantum appeal Appeal No. 11436 Penalty appeal u/s 271(1)(c) Appeal No. 11437 Penalty appeal u/s 271F Appeal No. 11438 Penalty appeal u/s 271B Appeal No. 11439
7 Anil Kumar Tanwar vs. ITO 2. It is submitted that NFAC issued notice dt. 27.09.2023 (PB 3 & 15) both in quantum appeal and in penalty appeal u/s 271(1)(c). The assessee sought adjournment in both the appeals and accordingly fresh notice dt. 16.10.2023 (PB 16) was issued in quantum appeal and notice dt. 17.10.2023 (PB 4) was issued in penalty appeal. The assessee in response to the quantum appeal filed detailed submission on 30.10.2023 (PB 7-14) but by mistake the submission along with annexures was uploaded in the penalty appeal u/s 271(1)(c) (PB 5-6). When this mistake was noticed by the assessee, he again uploaded the submission along with annexures on 20.11.2023 in quantum appeal (PB 17-18) which were filed in the penalty appeal. However, the Ld. NFAC without considering the submission and the details passed the order on 20.11.2023 by stating that assessee failed to explain the grounds taken against the issue. In view of above facts, it is humbly prayed that the matter be set aside to the AO in the interest of imparting substantial justice to the assessee.”
The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A).
We have heard the rival contentions and perused the material placed on record. The bench noted that the assessment order AO initiated penalty proceedings u/s 271(1)(c), 271B and 271F against which penalties were imposed and assessee filed appeal against these penalty orders and also in the quantum. All these appeals were numbered sequentially thus four appeals were pending before ld. CIT(A), one against quantum and three against the penalty orders. arguments of the ld. DR as to why and how the non compliance though not but appeared on record we deemed it in the interest of the justice be considered as reasonable reason for non compliance before the ld. CIT(A).
As the order of the ld. AO in this case is also not on merits without considering the arguments of the assessee we deem it fit in the interest of the justice to remand back the matter before the ld. AO to decide afresh on merit. Therefore, considering that contentions and ongoing through the orders of the lower authorities we are of the considered view that the assessing officer should hear the assessee’s submission on merits after affording proper opportunity of being heard and pass speaking order in the matter in accordance with the law. At the same time assessee is directed to represent and present all the facts before the assessing officer and should not ask for the adjournment on frivols grounds. At this stage we remand back the issues raised without commenting upon the merits of the case and the ld. AO is directed to complete the assessment as per law.
In the result, the appeal of the assessee is allowed for statistical purposes.