JAGVIR SINGH KUNTAL,MATHURA vs. INCOME TAX OFFICER, WARD-1(3)(2), MATHURA

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE : SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 68/Agr/2024 Assessment Year: 2017-18

Jagvir Singh Kuntal, Vs. Income-tax Officer, 1113, Palidungara, Sonkh Ward 1(3)(2), Mathura. Road, Mathura-281123, U.P. U.P. PAN : ALAPK4700A (Appellant) (Respondent)

Assessee by Sh. Anurag Sinha, Advocate Revenue by Sh. Shailendra Srivastava, Sr. DR

Date of hearing 12.12.2024 Date of pronouncement 09.01.2025

ORDER This appeal in ITA No.68/Agr/2024 for the assessment year 2017-18 has arisen from the appellate order dated 21.12.2023(DIN &

Order No. ITBA/NFAC/S/250/2023-24/1058966655(1)), passed by learned Commissioner of Income-tax (Appeals), NFAC, Delhi, which, in turn, has arisen from the assessment order dated 16.12.2019

passed by Assessing Officer u/s. 144 of the Income-tax Act, 1961. 2. Brief facts of the case are that the assessee filed its return of income on 21.03.2018, declaring income of Rs.2,99,790/-. Case of the

assessee was selected by Revenue for framing scrutiny assessment under CASS for the reason “large cash deposits compared to returned

ITA No.68/Agr/2024

income”. Statutory notices u/s. 143(2), 142(1) and 144 of the Act were

issued by the Assessing Officer during the course of assessment

proceedings. There was no compliance by the assessee. The

Assessing Officer invoked provisions of section 69A of the Act. The

Assessing Officer observed that the assessee has deposited total

cash of Rs.50.12 lakhs in the bank account during the year under

consideration and from 01.04.2016 till 08.11.2016, total cash of

Rs.34,22,200/- was deposited by the assessee in the bank account

and during the period 01.01.2017 to 31.03.2017, assessee has

deposited cash of Rs.7,61,300/- in the bank account and during

demonetization period, the assessee has deposited cash of

Rs.8,28,500/- in his bank account No. 85263070001056. The

Assessing Officer accepted Rs,.1.20 Lakh cash deposit during

demonetization as genuine. Assessee could not explain the source of

cash deposits of Rs.7,08,500/- during demonetization and the same

was brought to tax by the Assessing Officer u/s. 69A of the Act.

Assessing Officer observed that the assessee could not explain the

source of cash deposit to the tune of Rs.43,03,500/-, on which the

Assessing Officer computed profit @ 8% and brought to tax the

income of Rs.3,44,280/- in the hands of the assessee.

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CIT(Appeals) dismissed the appeal of the assessee ex parte in limine

without deciding the issue on merits on the ground that the assessee

has failed to substantiate its claim with documentary evidence like

acknowledgement of notice reply, bank statement etc. Learned

CIT(Appeals) noted the contentions of the assessee from the

statement of facts/grounds of appeal that the assessee filed its reply

before Assessing Officer during scrutiny proceedings also that the

assessee has not deposited any cash in his bank account and the

cash deposit does not belong to any of the bank accounts maintained

by the assessee, but due to lack of evidence, learned CIT(Appeals)

dismissed the appeal of the assessee.

and the ld. Counsel at the outset submitted that this appeal is delayed

by three days and the assessee has duly filed condonation application

and affidavit. It was submitted that the assessee belongs to rural

background and was not aware of strict compliance of filing of appeal

with the Tribunal. Ld. Counsel relied upon decision of Mumbai ITAT in

case of Angela J. Kazi vs. ITO (2006) 10 SOT 139 (Mum). He has

also relied upon the decision of Hon’ble Supreme Court, Collector,

Land Acquisition vs. Mst Katiji & Ors. (1987) 167 ITR 471 (SC) and 3 | P a g e

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the decision of Hon’ble Allahabad High Court in the case of Auto

Centre vs. State of U.P. & Ors. (2005) 278 ITR 291 (All). Ld. Counsel

for the assessee prayed that the delay of three days be condoned. Ld.

Sr. DR has no serious objection to the condonation of delay. After

considering the contentions of both the parties, I am of the view that

the delay of 3 days needs to be condoned in the instant case. If

substantial justice and technical considerations are pitted against each

other, Courts will lean towards advancement of Substantial Justice ,

unless mala fide is at writ large. I do not find any mala fide on the part

of the assessee in filing this appeal belatedly before the Tribunal

beyond the time prescribed. The assessee is not likely to gain by filing

this appeal belatedly with ITAT by 3 days. I, therefore, condone the

delay of 3 days in filing of this appeal belatedly by the assessee

beyond the time prescribed u/s. 253(3) of the Act. Reliance is placed

on the decision of Hon’ble Supreme Court in the case of Collector

Land Acquisition, Anantnag & Ors. vs Mst. Katiji &Ors. (supra). Thus, I

condone the delay in filing this appeal and proceed to decide the

appeal on merits. I order accordingly.

Assessing Officer has passed best judgment assessment u/s. 144 of

the Act. Notices u/s. 143(2) and 142(1) were issued by the Assessing 4 | P a g e

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Officer during the course of assessment proceedings. Case was

selected for scrutiny on the ground of larger cash deposit in the bank

account. It was also submitted that the bank statement were enclosed

along with appeal filed with ld. CIT(Appeals) to justify that no cash was

deposited in the bank account of the assessee. It was submitted that

the order of CIT(Appeals) is ex parte in limine without deciding the

issues arising in the appeal on merits. He drew my attention to para 3

& 4 of the CIT(Appeals)’s order. It was also submitted that the

assessee filed online reply before Assessing Officer during

assessment proceedings on 02.10.2018 and 05.12.2019, but the

same was not taken into cognizance by Assessing Officer. It was

submitted that no remand report was called by the ld. CIT(Appeals)

and it was an ex parte order.

5.2 Ld. Sr. DR submitted that it was an ex parte order passed by Ld.

CIT(Appeals) without adjudicating the appeal on merits.

5.3 Ld. Counsel in rejoinder submitted that no enquiry was made by

the Assessing Officer. Simply, the addition was made.

record. I have observed that the case of the assessee was selected

for framing scrutiny assessment on the ground of large cash deposits

in the bank account. During the course of assessment proceedings, 5 | P a g e

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notices u/s. 143(2), 142(1) and 144 were issued but no compliance

was made by the assessee. The assessee has disputed the same and

claimed to have submitted replies before the Assessing Officer during

scrutiny proceedings on 02.10.2018 & 05.12.2019. Before

CIT(Appeals), the assessee has categorically stated that there was no

cash deposit in the bank account of the assessee and as per form No.

35 placed on record, the assessee has filed bank statement with the

Revenue. Notices issued by ld. CIT(Appeals) were also not complied

with by the assessee. Learned CIT(Appeals) dismissed the appeal of

the assessee ex parte in limine without deciding the issues arising in

appeal on merits. Ld. CIT(Appeals) did not make any enquiry with

respect to claim of the assessee that the assessee has not deposited

any cash in bank account. The assessee has claimed that the bank

statement was filed by the assessee before the CIT(Appeals) along

with Form-35. Ld. CIT(Appeals) did not call for assessment records

before adjudicating appeal of the assessee nor call for the remand

report from the Assessing Officer. I observe that the ld. CIT(Appeals)

has not decided the appeal on merits. The ld. CIT(A) is required and

obligated to pass order in compliance with the provisions of section

250(6), as ld CIT(A) is required to pass reasoned and speaking order

on merits in accordance with law. The appellate order passed by ld. 6 | P a g e

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CIT(A) is subject to further appeal with ITAT u/s 253. The appellate

order passed by ITAT is subject to further appeal before Hon’ble High

Court u/s 260A. The judgment and order passed by Hon’ble High

Court is also subject to challenge before Hon’ble Supreme Court.

Thus, the appellate order passed by ld. CIT(A) is not a final order, as it

is subject to challenge before higher appellate authority. Thus,

Reasons which weighed in the minds of the adjudicating authority

while adjudicating appeal on merits of the issues are cardinal as the

higher appellate authority can then adjudicate appeal on the issues

arising in appeal before them, based on decision and reasoning of ld.

CIT(A) in deciding the issues. If the ld. CIT(A) simply dismisses the

appeal merely because the assessee did not comply with the notices

issued by ld. CIT(A) in limine without adjudicating issues arising in the

appeal on merits , such order is not sustainable in the eyes of law

keeping in view provisions of Section 250(6) , and also higher

appellate authorities will be deprived to see what weighed in the mind

of the ld. CIT(A) while adjudicating appeal as it will be an order passed

without reasoning on the issues on merits . The appellate order of the

CIT(A) is clearly in violation of section 250(6) of the Act and liable to

be set aside. Merely stating the assessment order passed by AO is

upheld, and that the assessee has not submitted details/documents is 7 | P a g e

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not sufficient. The ld. CIT(A) is not toothless as his powers are co-

terminus with the powers of the AO, which even includes power of

enhancement. It is equally true that the assessee also did not

complied with the notices issued by ld. CIT(A) and did not file the

requisite details/documents to support his contentions. Thus, the

assessee is equally responsible for its woes. Under these

circumstances and fairness to both the parties, in the interest of

justice, the appellate order of CIT(A) is set aside. It is also observed

that the claim is made by the assessee that the assessee filed its

replies on 02.10.2018 and 05.12.2019 before the Assessing Officer

during the assessment proceedings but they were ignored by the

Assessing Officer while framing ex parte assessment u/s. 144. The

case was selected for framing scrutiny assessment under CASS on

the ground of large cash deposit in the bank account but the assessee

has denied that there was no cash deposit by the assessee in its bank

account. Bank statement was filed before the CIT(Appeals) also.

Thus, the whole edifice of selection of the case for scrutiny by

Revenue is under challenge by the assessee and thus, it will be fit and

appropriate to set aside the assessment order and the matter can go

back to the file of Assessing Officer for framing fresh assessment de

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novo in accordance with law. I clarify that I have not commented on

the merits of the issues in appeal. I order accordingly.

Order pronounced in the open court on 09/01/2025.

Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 09/01/2025 *aks/-