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Facts
The assessee filed an appeal against the order of the NFAC which confirmed the addition of Rs. 6,48,100/-. The delay in filing the appeal was one day due to a clerical error by the assessee's chartered accountant's clerk. The assessee is engaged in the business of general and cosmetic goods.
Held
The Tribunal condoned the delay of one day in filing the appeal. The Tribunal noted that the assessee's representative was absent during the hearing and no submissions or evidence were produced. However, considering the assessee is a small private individual, the Tribunal decided to remand the matter back to the AO for a fresh decision on merits after affording proper opportunity of hearing.
Key Issues
Whether the addition of Rs. 6,48,100/- as unexplained money is justified, and whether the AO should decide the matter on merits after affording proper opportunity to the assessee.
Sections Cited
143(2), 69A, 115BBE, 250, 251
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 567/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 06.07.2023 for the assessment years 2017-18.
2. The assessee has raised the following grounds of appeal:-
Mohit Agarwal vs. ITO 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of the law and on facts.
2. On the facts and circumstances of the case, the learned CII(A) has erred, both on facts and in law, in confirming the order of the AO, ignoring the fact that the notice issued under section 143(2) of the Act is bad and liable to be quashed as the same has been issued beyond the statutory period prescribed under the Act.
On the facts and circumstances of the case, the learned CII(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment order passed by the AO is barred by limitation having been passed beyond the statutory period prescribed in the Act and hence liable to be quashed.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment order passed by the learned AO is bad in law as the same has been passed without application of his own mind.
5. On the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the addition of Rs 6,48,100/- towards cash deposits in the bank account as unexplained money u/s 69A of the Act.
6. That the CIT (Appeals) has erred in upholding an addition of Rs 6,48,100/- made by the Assessing Officer u/s 69A of the Act read with Section 115BBE on account of cash deposited by the assessee in his bank account out of cash in hand available with him which has been arbitrarily alleged to be unexplained.
7. (i)On the facts and circumstances of the case, the learned CTT(A) erred in upholding the addition of Rs 6 ,48,100/- being cash deposited during the demonetization period without appreciating that relevant details with evidence regarding the availability of cash has been filed before him as well as before Ld. A.Ο.
(ii)The Ld. CIT (A) fails to appreciate that the cash deposit of Rs.6,48,100/- during the demonetization period was out of opening cash in hand available
Mohit Agarwal vs. ITO in the books of account and disclosed in the ITR filed for the AY 2016-17, past savings available with the assessee and cash sales made during the year.
(iii)On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in arbitrarily rejecting the explanation and evidence submitted by the assessee in support of its contention.
8. The CIT(A) has erred in law and on facts in upholding the provision of section 115BBE of the Act
9. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in rejecting the contention of the assessee that the order has been passed by the AO without affording adequate opportunity of being heard to the assessee.
10. That the appellant craves leave to add, amend or alter any of the grounds of appeal.”
3. At the outset of hearing, the Bench observed that there is delay of 01 day in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:
“Sub: Application seeking condonation of delay in Filing of appeal before Income Tax Appellate Tribunal MAY IT PLEASE YOUR HONOURS 1. This is an application for the condonation of delay in filing of appeal before the Income Tax Appellate Tribunal, Jaipur against the order dated 06.07.2023 passed by the Hon'ble CIT(A) National Faceless Appeal Centre (NFAC), under section 250 of the Income Tax Act.
The Assessee in the present case filed the appeal on 05.09.2023, and accordingly, there is a delay in filing the appeal by 1 day.
Mohit Agarwal vs. ITO 3. That the delay was on account of a clerical error made by the clerk of the Chartered Accountant of the assessee.
That the Assessee had handed over the order passed by the National Faceless Appeal Centre, Delhi, to the clerk working in the office of the Chartered Accountant for further course of action.
5. That after a long haul when the Assessee inquired from the Chartered Accountant regarding the status of the demand raised consequence to the CIT(A) order, he surprisingly came to know that the Chartered Accountant had not received any CIT(A) order.
6. That during the verification of this issue, it was revealed that the clerk had kept the order in another file, and therefore, the Chartered Accountant could not receive the order and failed to file an appeal against the order of the Hon'ble CIT(A) National Faceless Appeal Centre (NFAC), within the due date.
That the Assessee immediately took steps to file the appeal before the Income Tax Appellate Tribunal.
8. That due to this omission on the part of the Clerk, there is a delay in filing this appeal by 1 day.
That as explained above, it is humbly submitted that the delay in filing the appeal was unintentional and by reason beyond the control of the Assessee.
That, your Honour, may kindly appreciate that the Apex Court, in the landmark case, Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471, has held that when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and the cause of justice being defeated. As against this, when the delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
Given the facts of the case, the ratio decided by the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471, and in the interest of justice, we sincerely pray to your Honour that the delay in filing the appeal be condoned, and the appeal be heard on merit.”
Mohit Agarwal vs. ITO 4. During the course of hearing, the ld. DR not objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit in the interest of justice as delay is of one day only.
We have heard the contention of the ld. DR and perused the materials available on record. The prayer by the assessee for condonation of delay of one day has merit and we concur with the submission of the assessee. Thus the delay of one day in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.
The brief facts of the case are that the assessee has filed his return of income for the year under consideration on 14.03.2018 declaring income of Rs. 3,48,200/-.
The case was selected for complete scrutiny as per CBDT Instruction No. 4/2018.
The notice u/s 143(2) was issued on 27.09.2018 electronically & which was duly served upon the assessee. For safe side, a notice was also served upon the assessee by notice server on 28.09.2019. In response to the notice, the assessee filed reply online on 02.10.2018.The assessee was engaged in the business of general & cosmetic goods during the year under consideration. During the assessee
Mohit Agarwal vs. ITO proceedings, e-notice u/s 142(1) along with detailed questionnaire was issued on 03.04.2019 which was duly served upon the assessee.
7. 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 dismissed the appeal of the assessee by giving following findings on the issue:-
“7.9 That a bare perusal of the aforesaid deeming section therein reveals that an addition under the said statutory provision can be made where the assessee is found to be the owner of a bank account in which the credits were recorded outside the regular books of account maintained for any previous year. Thus, the very sine qua non for making of an addition under Section 69A pre supposes a credit of the aforesaid amount in the 'bank account' held for the previous year. This is the settled position of law that a statutory provision has to be strictly construed and interpreted as per its plain literal interpretation, and no word howsoever meaningful it may so appear can be allowed to be read into a statutory provision in the garb of giving effect to the underlying intent of the legislature. 7.10 Having considered entire facts of the case, and the case laws cited above, it is apparent that the appellant has completely failed to offer any explanation either before the AO during assessment proceedings or before me during appellate proceedings, despite affording sufficient number of opportunities and hence, I find no infirmity in the order of AO. Accordingly, the addition made of Rs. 6,48,100/- is confirmed.
8. As a result, appeal is dismissed. Order passed u/s 250 r.w.s 251 of the I.T. Act, 1961.”
During the course of hearing, the ld. AR for the assessee is absent and ld. DR submitted that the AR has not any made any submission or produce any evidences hence, we remand back to the AO.
Mohit Agarwal vs. ITO 9. We have heard the contentions of the ld. DR and perused the material placed on record. The bench noted that the assessee is engaged in the business of general & cosmetic goods. 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. Therefore, the cash deposit at Rs. 6,48,100/- is treated as deemed income as unexplained money u/s 69A of the Income Tax Act, 1961 and the same amount of Rs. 6,48,100/- is added to the total income of the assessee and we find the source of cash deposit of Rs. 6,48,100/- 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.
Mohit Agarwal 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 (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) 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 The Appellant- Mohit Agarwal, Sikar 1. izR;FkhZ@ The Respondent- ITO, Sikar 2. 3. vk;dj vk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZQkbZy@ Guard File 5. vkns'kkuqlkj@ By order,
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