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Income Tax Appellate Tribunal, DEHRADUN BENCH “SMC”: NEW DELHI
Before: SHRI VIMAL KUMAR & SHRI BRAJESH KUMAR SINGH
O R D E R
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeals are filed by the legal heir of Appellant/assessee are against orders dated 22.08.2024 and 30.08.2024 passed by Learned Commissioner of Income-Tax(Appeals)/National Faceless Appeal Centre(NFAC), Delhi (hereinafter referred as ‘Ld. CIT(A)’) under Sections 250 of the Income-Tax Act, 1961 (hereinafter referred as “the Act”) arising out of assessment order dated 14.03.2023 of the Assessment Unit (hereinafter referred as “Ld. AO”) under Sections 147/144 read with section 144B of the Act and penalty order dated 05.09.2023 under Section 271AAC(1) of the Act for assessment year 2018-19.
Brief facts of the case are that the case of appellant/assessee was selected on basis of specific information flagged as per the Risk Management Strategy formulated through ITBA software under the head ‘NMS cases’. On verification of details, it was seen that during assessment year 2018-19, assessee deposited cash amounting to Rs. 55,73,750/- in one or more accounts of cash deposits and assessee did not file return of income. After recording reasons, the case was reopened by issue of notice under Section 148 of the Act on 25.03.2023 with prior approval of the DCIT, Dehradun. Despite intimation letter dated 17.08.2022, multiple notices under Sections 142(1) dated 26.09.2022, 01.11.2022, letter dated 22.12.2022 and show- cause-notices dated 29.12.2022, 15.02.2023, 27.02.2023 and 10.03.2023, no compliance was made by Assessee. Ld. AO passed assessment order dated 14.03.2023. In pursuance to assessment order dated 14.03.2023. Ld. AO passed penalty order dated 05.09.2023.
Against assessment order dated 14.03.2023 and penalty order 05.09.2023, the assessee filed applications for condonation of delay of 274 days in filing appeals and appeals before Ld. CIT(A) which were dismissed vide order dated 22.08.2024 and 30.08.2024 respectively.
Being aggrieved, the appellant/assessee preferred present appeals with the following grounds:
Grounds of Appeal in ITA No.178/Del/2024:
“1. That the assessing officer including the territorial juristic and face less (hereinafter referred to as "AO" unless referred otherwise) has gone wrong on facts and in law in passing ex-party assessment order u/s 147 r.w.s. 144/144B of the IT Act, 1961 dated 14.03.2023 (hereinafter referred to as. "Impugned Order") and CIT(Appeal) face less has gone wrong in dismissing the Appeal No. NFAC/2017- 18/10309757 dated 22.08.2024, as non-maintainable, hereinafter called as appellate order and appellate authority respectively.
That no notice u/s 148(b) dated 08/03/2022 was legally served upon the appellant and order passed u/s 148A (d) without an opportunity of being heard, it is against the natural justice and bad in law, the entire proceeding at the behest of such notice has no legs to stand and it is bad in law and be annulled or quashed the appellate authority has gone wrong in dismissing the appeal.
That in the alternative and without prejudice to the above, the order passed u/s 148A (d) dated 24/03/2022 is without jurisdiction, without authority of law, barred by limitation and devoid of merits, therefore, it is bad in law on facts, the appellate authority has gone wrong in dismissing the appeal. 3
That the notice u/s 148 dated 25/03/2022 was never legally issued or served upon as allegedly, in the alternative and without prejudice, it has been issued in the name of deceased person and whereas it was on record that the appellant had died on 18/02/2018, proceeding of assessment concluded on such a notice is bad in law and liable to be annulled, the appellate authority has gone wrong in dismissing the appeal.
That it is alleged that the AO has taken approval from PCIT Dehradun vide order dated 23/03/2022. the permission as presumed has been obtained on the basis of incorrect or false information and permission if any so obtained has no legal value and bad in law on facts, the appellate authority has gone wrong in dismissing the appeal. 6. That the AO failed to issue any proper and legal notice of hearing and also alternatively no such notice was served upon the appellant, hence also the impugned order passed by the AO is bad in law on facts and liable to be quashed, the appellate authority has gone wrong in dismissing the appeal. That the AO has gone wrong on facts and circumstances by not providing the appellant proper and equitable opportunity of being heard before passing the impugned order which is against the principles of natural justice and bad in law and therefore, liable to be quashed, the appellate authority has gone in dismissing the appeal. 7. That impugned assessment order passed by the AO is highly arbitrary and excessive on the facts and circumstances of the case. The AO has failed to bring any cognate material on record to substantiate his ex-party assessment order, the appellate authority has gone wrong in dismissing the appeal. 8. That the AO has in his possession the copy of OD/CC bank a/c with negative balance, as obtained from the bank. It clearly shows the business transactions and deposit from the business transactions. And whereas also the AO has all the legal authority and power to enquire about each and every transaction from the bank as well as from the 4
depositor, had the AO discharged his duty of inquiry as was encumberent upon him, the miscarriage of justice in the shape of impugned assessment order would not have occurred and such a high pitch assessment might not have come out, in these facts and circumstances, the impugned assessment order should have been cancelled or annulled, the appellate authority has gone wrong in dismissing the appeal. 9. That in the alternative and without prejudice to the above grounds of appeal
, the AO has made addition at Rs.12613886/-(1.26 Cr) which includes the cash deposit against regular cash sale, and other banking deposits whether by way of cheque or other banking transfer etc and also include the inter banking transaction from one bank to other having same PANo., during the year under consideration the appellant has gross sale of goods at Rs.8160833/- (before death) and at Rs.0.00/- (after death till the end of financial year) totaling to Rs.8160833/- in the entire financial year, the AO has gone wrong in treating all the deposits as cash deposit overlooking the fact of banking transaction and making addition u/s 69 A at Rs.12613886/-(1.26 Cr) of the 1 T Act, the appellate authority has gone wrong in dismissing the appeal.
10. That on the facts and circumstances of the case, the AO has gone wrong in invoking sec 69 A of the I T Act against the appellant the appellate authority has gone wrong in dismissing the appeal. 11 That as far as the addition is concern the appellant rely upon CIT v/s Devi Prasad Vishwanath Prasad (1969) 72 ITR 194 (SC); CIT v/s President Ind. 258 ITR 654 (Guj); CIT v/s Kulwant Rai (Del H C);CIT v/s Vishal Exp Overseas Ltd (Guj H C); In The Matter Of Smt Harshile Chorcia VsITO(2008)298 ITR 349 H'ble Rajasthan High Court M/s Agson Global (P) Ltd v/s ACIT(ITAT Del) dt of order 31/10/2019; Amritsar Tri L.T.A. No.195/Asr/2022 Asstt. Yr. 2017-18 Rajkumar v/s ITO dt of judgment 11/04/2023;ITAT Ahmedabad Asstt. Yrг. 2017-18: ІТО Ward 1(1)(3)Ahmedabad v/s Ashapura Petrochem Marketing Pvt Ltd dt of judgment
18/10/2023:ITA No. 683/Mum/2022 Asstt. Yr.:2017-18 Jet Freight Logistic Limited Mumbai v/s CIT appeal (NFAC)ITAT Mumbai order dated 23/09/2022,held that addition U/S 68 could not be made In respect of the amount which was found to be cash receipt from the customer against which delivery of goods was made to them the appellate authority has gone wrong in dismissing the appeal.” Grounds of Appeal in “1. i. That the assessing officer including the territorial juristic and faceless (hereinafter referred to as "AO" unless referred otherwise) has gone wrong on facts and in law in passing ex-party penalty order u/s 271AAC(1) of the IT Act, 1961 dated 05.09.2023 (hereinafter referred to as "Impugned Order") is bad in law on facts and the CIT (appeal) face less (herein after referred to as appellate authority) has gone wrong in not appreciating it on facts and circumstances of the case and dismissed the same as non-maintainable. 2. ii. That the appellant died on 18.02.2022, much before the proceeding were initiated by the AO u/s 148A (b) Dt. 08.03.2022, order u/s 148A (d) dated 24.03.2022, notice u/s 148 Dt. 25.03.2022 were issued in the name of the appellant, ultimately ex-party assessment order u/s 147/148 of the IT Act Dt. 14.03.2023 was passed with a direction of initiating proceeding u/s 271AAC(1) and that too in the name of the decease as if he is live. And whereas it was within constructive knowledge of the department that the assessee has died before the initiation of proceedings, the AO went wrong in discharge of his duty under the IT Act and the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 3. iii. That it is settled law that no penalty can be imposed on to a dead person. The AO has done it, therefore, the impugned order is bad in law and liable to be quashed, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable.
4. iv. That impugned order is passed by the AO without authority of law under the IT Act, without proper jurisdiction hence bad in law, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 5. v. That impugned order is passed by the AO without providing legal and proper notice of being heard hence impugned order is bad in law and the AO failed to provide opportunity of being heard, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 6. vi. That the AO failed to issue any proper and legal notice of hearing and also alternatively no such notice was served upon the appellant, hence also the impugned order passed by the AO is bad in law on facts and liable to be quashed the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 7. vii. That the AO has gone wrong on facts and circumstances by not providing the appellant proper and equitable opportunity of being heard before passing the impugned order which is against the principles of natural justice and bad in law and therefore, liable to be quashed, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 8. viii. That impugned order passed by the AO is highly arbitrary and excessive on the facts and circumstances of the case. The AO has failed to bring any cognate material on record to substantiate his ex-party impugned order, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable. 9. ix. That the AO made ex-party assessment on the basis estimation of income/presumption of a person who can not appear to defend himself (died) how can it be presumed that he (died) has concealed his particulars, the matter was before the appellate authority, the appellate authority went wrong in not appreciating the same and dismissed the appeal as non maintainable.
x. That the appellant crave the right to add, amend, or withdraw Any 'Grounds of Appeal' at the time of hearing of appeal or before, and produce new evidence at the time of hearing or before.”
5. At the time of hearing, none appeared on behalf of the appellant/assessee.
Learned Authorised Representative for the Department of Revenue relied on orders of the departmental authorities.
From examination of record in the light of aforesaid submissions, it is apparent that appellant/assessee (Kunwar Toseen) died on 18.02..2018. Ld. AO passed assessment order dated 14.03.2023 and penalty order dated 05.09.2023 ex parte. Ld. CIT(A) vide order dated 22.08.2024 and 30.08.2024 dismissed the application for condonation of delay in filing the appeal and appeals. It is a material fact that legal heirs of assessee were not served with any notices under the Act and were not afforded an opportunity of being heard as per principles of natural justice before passing of impugned orders.
In view of above material facts, in the interest of justice, it is considered expedient to set aside the impugned orders of Ld. AO and Ld. CIT(A) and restore the matter to the file of the Ld. AO for fresh decision in accordance with law.
In the result, both the appeals are allowed for statistical purposes.
Order pronounced in the open court on 15/04/2025. Sd/- Sd/- (BRAJESH KUMAR) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 17/04/2025 Mohan Lal