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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by assessee is directed against the order dated 08.11.2023 of the Commissioner of Income Tax (Appeal) National Faceless Appeal Centre (NFAC) Delhi, for A.Y.2015-16.
There is a delay of 75 days in filing the present appeal. The assesse has filed an application for condonation of delay which is supported by an affidavit of the assessee. Ld. AR of the assesse has submitted that the assesse is not well-versed with the internet technology and therefore, was depending upon tax consultant to ITANo.240/Ind/2024 Amanullah whom the matter was handed over for representing before the CIT(A). However, the assessee came to know about impugned order when he has received a massage of his mobile number and realized that the tax consultant has not taken the requisite steps for filing the submissions before the CIT(A). Thus, Ld. AR has submitted that it was not in the knowledge of the assessee when this order was passed by the CIT(A) and he came to know about this order only through massage on mobile number. The assesse immediately took steps to file the present appeal which is belated by 75 days. Ld. AR submitted in view of the fact that the impugned order of the CIT(A) is passed ex-pare for non-prosecution the delay in filing the present appeal may condone and the appeal of the assesse may be admitted on merits.
On the other hand, ld. DR has not raised any serious objection against the condonation of delay in filing the present appeal.
We have considered the rival submissions and carefully perused the impugned order of the CIT(A). The CIT(A) has dismissed the appeal of the assessee and upheld the addition made by the AO for want of written submission and other details. Thus, it appears that there was no representation on behalf of the assessee before the CIT(A). Accordingly in the facts and circumstances of the case and in the interest of justice the delay of 75 days in filing the present appeal is condoned.
The assesse has raised following grounds of appeal: Page 2 of 8
ITANo.240/Ind/2024 Amanullah “1. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in not appreciating the fact that there was no legal basis available with the Ld. A.O. to make the additions of Rs. 3,41,75,082 and accordingly these additions deserve to be deleted. 2.On the facts and circumstances of the case and in law and without prejudice to the above ground of appeal
, Ld. CIT(A) erred in not appreciating the fact that the opening of assessment u/s 147 was bad in law as there was no reason to believe with Ld. AO that any income of the assessee has escaped the assessment. 3.On the facts and circumstances of the case and in law and without prejudice to the above grounds of appeal, Ld. CIT(A) erred in not appreciating the fact that assessment order passed by Ld. AO was bad in law as much as the same has been passed without sharing draft assessment order with the assessee, which was required as per faceless Assessment Scheme.”
6. Ld. AR of the assesse has submitted that the AO has reopened the assessment on the basis of the statement of office bearers of M/s Kanha Credit Cooperative Society recorded during the course of survey conducted on the said cooperative society wherein it was revealed that the said society has issued cheques/DDs to the various persons in lieu of cash and assesse is one of the recipient of Cheque from the said society against the cash deposit. Ld. AR has submitted that there is no such transaction of any transfer of fund by the society in the account of the assesse and therefore, the AO has no tangible material to believe that the assessment on account of this alleged transaction of payment of cash in lieu of Cheque has escaped assessment. He has further contended that the AO has not brought on record any material to show that the assesse has Page 3 of 8
ITANo.240/Ind/2024 Amanullah actually paid the cash and received alleged cheques/DDs for sum of Rs.3,41,75,082/- and therefore, the addition has been made by the AO merely on suspicion without any tangible material. Thus, he has submitted that the addition sustained by the CIT(A) while passing ex-parte order is not justified when there is no material to show that the assesse has deposited such cash in lieu of cheque of Rs.3,41,75,082/-. He has further submitted that since the assessment is also passed ex-parte and assessee was not having any particular occasion either before the AO or before the CIT(A) to produce the relevant record to show that the alleged transactions does not belong to the assessee. Hence, he has pleaded that the matter may be remanded to the record of the AO for fresh adjudication after giving one more opportunity to the assessee to present his case.
On the other hand, ld. DR has raised no serious objection if the matter is remanded to the record of the AO for fresh adjudication in view of the fact that both the AO as well as the CIT(A) have passed the ex-parte orders.
Having considered the rival submissions and careful perusal of the record, at the outset, we note that the assessee has filed his return of income on 26.10.2015 declaring total income of Rs.4,36,400/-. The assessment was reopened by issuing notice u/s 148 on 16.03.2020 on the reasons recorded by the AO as under:
“1. A survey was carried out in the case of M/s Kanha Credit Cooperative Society Maryadit, 173 Shree Krishan Complex Gas Page 4 of 8
ITANo.240/Ind/2024 Amanullah House Road Indore, PAN: AACAK3125F, on 20/11/2014 by Income Tax Officer (I &CI) wing, Indore. During the course of survey, vouchers of some of the persons were impounded from the premises of the asssessee. On verification of these vouchers it was noticed that these persons were tendering their unaccounted cash to the assessee and in turn the assessee was issuing cheques of equal amount to the persons depositing such cash with it. 1.During the course of scrutiny assessment proceedings in the case of the assessee society for AY 2015-16 it was noticed that the assessee society received cash amounting to Rs.92 crores from various parties which was deposited in Saving Bank Accounts of the society with Axis Bank Ltd. Indore. During the course of assessment proceedings a statement of Shri Dipak Tharani & Shri Vinod Sharma who were the office bearers of the society was recorded on 11.12.2017 & 05.12.2017 respectively. It was revealed that the cash deposited in the bank account was in fact received from various persons who gave the same to the Society for getting cheques/DDs in lieu of such cash. Therefore the persons deposing such cash with the credit society are real beneficiaries of such transactions. A list of persons who have done such transactions for cash in lieu of cheques/DDs was prepared on the basis of material impounded during the course of survey and statement of the office bearers mentioned above. Accordingly the amount deposited in cash in the bank account of the assessee at Rs.92 Crore was protectively assessed in the hand of the assessee. On further verification of materials on record reveled that the above mentioned assessee is one of the beneficiaries and has made transaction of cash in lieu of cheques/DDs for Rs.3,41,75,082/- in the F.Y 2014-15 ie relevant to the A.Y 2015-16. The source of the said cash deposited with the assessee Society is unexplained in the hands of the assessee as the transactions are not recorded in the books of the assessee as revealed during the course of survey and assessment of the society. Thus such an amount of Rs. 3,41,75,082/- appearing in above mentioned transactions in the name of the assessee is unexplained cash deposit with the assesee which was not Page 5 of 8
ITANo.240/Ind/2024 Amanullah recorded in the regular books of assessee and as such the source of the cash so deposited cannot be held to be proven and thus has escaped taxation. Accordingly, the deeming provisions of explanation 2 of section 147 are invoked and it is a strong case of escapement of income for the year under consideration. 2.In view of the above, I have reason to believe that the income to the extent of 2. Rs. 3,41,75,082/-chargeable to tax for the AY 2015-16 has escaped assessment. Accordingly the notice u/s 148 of the IT Act is issued to tax the above income and also any other income chargeable to tax which has escaped assessment and which comes to my notice subsequently in the course of the proceedings under the section for the AY 2015-16." 8.1 Thus, it is clear that the AO propose to assess the income on account of cash deposited by the assesse with M/s Kanha Credit Cooperative Society Maryadit in lieu of cheuqes/DDs for Rs.3,41,75,082/-. This fact was revealed during the survey conducted in the case of the said Cooperative society and in the statement of Shri Deepak Tharani and Shri Vinod Sharma recorded during the survey proceedings revealed that the society received cash and issued Cheques/DDs to various persons including the assessee. The AO has passed ex-parte order u/s 147 r.w. section 144 of the Act when there was no reply on behalf of the assesse and made the addition of Rs.3,41,75,082/-. Except the statement of office bearer of the society the AO has not made any reference to the details of the transactions of transfer of money by the society to the account of the assessee or otherwise payment of the amount through Cheques/DDs to the assessee. Since the assessment order as well as the impugned order of the CIT(A) are passed ex-parte Page 6 of 8
ITANo.240/Ind/2024 Amanullah therefore, in the facts and circumstances of the case and in the interest of justice, we are of the considered opinion that the assessee be given one more opportunity to present his case along with supporting evidences to show that he has not received the alleged Cheques/DDs from the society. Since the AO has not referred any material in the assessment order therefore, while passing fresh order the AO shall confront to the assessee the incriminating material if any on the basis which addition is made and adjudicate the issue afresh after considering explanation and supporting evidences to be filed by the assessee. Hence, the impugned order is set aside and the matter is remanded to the record of the AO for fresh adjudication in the above terms.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 04.09.2024.
Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore,_ 04.09.2024 Patel/Sr. PS
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ITANo.240/Ind/2024 Amanullah Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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