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Facts
The assessee filed an appeal against the order of the NFAC/ld. CIT(A) for assessment year 2016-17. The case was selected for limited scrutiny under CASS. The Assessing Officer made an addition of Rs. 9,85,000/- for undisclosed sources and also disallowed expenses, which was later deleted by the CIT(A).
Held
The Tribunal noted that the source of cash deposit of Rs. 9,85,000/- was not satisfactorily explained by the assessee. However, considering the assessee is a small person working privately and the previous disallowance of expenses was deleted by the CIT(A), the bench decided to hear the appeal on merit.
Key Issues
Whether the addition of Rs. 9,85,000/- for undisclosed sources is legally sustainable and whether the Assessing Officer had exceeded jurisdiction by expanding the scope of inquiry beyond limited scrutiny.
Sections Cited
69A, 143(2), 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 391/JPR/2023
vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M.
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [herein after referred to as "NFAC/ld. CIT(A)"] dated 28.04.2023 for the assessment years 2016-17.
2. The assessee has raised the following grounds of appeal:-
“1. That the additions of Rs. 9,85,000 i.e. undisclosed sources u/s 69A made by Ld. A.O. and confirmed by Ld. C.I.T. (A) - NFAC Delhi are bad in law and facts of the case as:
A. The additions made by Ld. A.O. are beyond jurisdiction as not permissible under Limited Scrutiny. Case was selected under CASS (Limited) for issue -
Whether the investment and income relating to securities transactions are duly recorded
The Ld. A.O. has unnecessarily extended the scope to other issues - (Disallowance of expenses & Additions u/s 69A). Noteworthy that Disallowance of expenses have been deleted by Ld. C.I.T. (A) in view of the nature of expenses and business of appellant.
B. Additions are not coverable u / s 69A : The amount deposited in bank account is duly reflected in Books of Accounts submitted before Ld. C.I.T. (A) Fact recorded in para 4 of order - Copy of cash book and bank statements are enclosed for your ready reference.
That the appellant carves to add, amend, alter the grounds before or at the time of appellate hearing.”
The brief facts of the case are that the return of income was e-filed by the assessee on 31.08.2016 vide acknowledgement No. 430616960310816 declaring total income of Rs. 3,95,890/- after claiming deduction under chapter VI-A amounting to Rs. 33,467/-. The case was selected for “Limited Scrutiny” through CASS. Accordingly, a notice u/s 143(2) was issued on 16.08.2017 on ITBA requiring the assessee to furnish evidence/information online through. e-proceeding facility on or before 05.09.2017. Thereafter, notice u/s 142(1) of the I.T. Act, 1961
Chittar Mal Jain vs. ITO along with questionnaire was issued on 04.07.2018 requiring the assessee to file/furnish information/details through e-filing facility on or before 19.07.2018. In compliance thereto, the assessee filed part written submission in Dak on 18.07.2018 which was placed on record.
Aggrieved, from the said order of assessment the assessee has filed an appeal before the ld. CIT(A) who after hearing the contention of the assessee partly allowed the appeal of the assessee by giving following findings on the issue:-
“The above reply of the appellant has been carefully examined and considered in detail with reference to the order of the AO. After considering the facts of the case, the source of cash deposit of Rs. 9,85,000/- has not been explained satisfactorily by the appellant, either before the AO or before the first appellate authority. Therefore, the addition made by the AO on this account amounting to Rs. 9,85,000/- is confirmed and this ground of appeal
No. (ii) of the appellant is dismissed.
6. Remaining substantive ground of appeal No. (i), regarding the disallowance of commission expenses and interest expenses by the AO has been considered and in view of the nature of business of the appellant and the nature of related expenses, this ground of appeal is allowed after examining the facts of the case. The appeal of the appellant is partly allowed.”
5. Before us, the ld. AR for the assessee is absent and the ld. DR submitted that the ld. AR for the assessee has not appeared even before ld. CIT(A) and before ld. AO also .
Chittar Mal Jain vs. ITO 6. We have heard the contention of Ld DR and perused the material placed on record. The bench noted that the assessee is engaged in the business of share trading. Though the ld. DR objected to the prayer of the assessee but looking to the fact of the case that assessee being small person working privately as self employed. On verification of the details/information filed by the assessee, the assessee has shown share profit (F&O) amounting to Rs. 8,79,256/- and claimed commission expenses of Rs. 2,56,000/- and interest expenses of Rs. 1,82,600/- as expenditure. We find the source of cash deposit of Rs. 9,85,000/- has not been explained satisfactorily by the assessee either before the AO or before the first appellate authority. Therefore, bench feels that the assessee should be heard on merit rather than to dismiss the appeal on the technical reasons. Considering that prayer of the assessee, considering the totality of the facts we consider deem fit 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.
Chittar Mal Jain vs. ITO 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, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 01/01/2024. Sd/- Sd/- ¼jkBksM deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (Dr. S. Seethalakshmi) (RATHOD KAMLESH JAYANTBHAI) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 01/01/2024 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Chittar Mal Jain, Kishangarh 2. izR;FkhZ@ The Respondent- ITO, Ward-1, Kishangarh 3. vk;dj vk;qDr@ The ld CIT विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 4. xkMZQkbZy@ Guard File 5. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत