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Income Tax Appellate Tribunal, ‘ B ’ (SMC
Before: SHRI MAHAVIR SINGH
आयकर अपील सं./ 2017-2018 Sivalingam Natarajan, Vs. The Income Tax Officer, No.856, Nehru Nagar, Ward 5, 2nd Street, Puducherry Vegupatti Main Road, Ponamaravathi, Pudukkottai Dist. 622 407. [PAN AABPN 4332R] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Ms. N.V. Lakshmi, Advocate ��यथ� क� ओर से /Respondent by : Shri ARV Sreenivasan, Addl CIT सुनवाई क� तार�ख/Date of Hearing : 20.02.2024 घोषणा क� तार�ख /Date of Pronouncement : 20.02.2024 आदेश/ O R D E R This appeal by assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Order No.ITBA/NFAC/S/250/2023-24/1057518425 (1), dated 30.10.2023. The assessment was framed by the Income Tax Officer, Ward 5, Puducherry, for the assessment year 2017-2018, u/s.144 of the Income Tax Act, 1961 (in short ‘’the Act’) dated 30.09.2019.
The first issue in this appeal of assessee is as regards to order of 2. the ld. Commissioner of Income Tax (Appeals) (in short ‘’the ld. CIT(A) ) confirming the action of the ld. Assessing Officer in making addition of Rs.10,50,000/- as unexplained credit u/s.69A of the Act in regard to cash deposits made during demonetization period in specified bank notes and taxed accordingly u/s.115BBE of the Act.
Brief facts of the case are that assessee is an individual 3. and doing business in the name of M/s Prophy Film Industries by operating a current account and total business receipts of Rs.1,12,09,082/- including cash deposits during demonetization period. Assessee has not filed any return of income in the relevant assessment year 2017-2018 and therefore notice u/s.142(1) (i) of the Act was issued. But despite that assessee has not filed return of income. Accordingly, the ld. Assessing Officer based on material available and bank account statement collected from State Bank of India where assessee has made deposit of cash including demonetized currency in specified bank notes aggregating to Rs.1,01,59,082/-, proceeded to frame best judgment assessment order u/s.144 of the Act. The ld. Assessing Officer made addition of cash deposit made during demonetization period in specified bank notes in demonetized currency at Rs.10,50,000/- as unexplained cash deposits u/s.69A of the act and therefore taxed u/s.115BBE of the Act. Aggrieved, assessee preferred an appeal before the ld. CIT(A).
Even nothing was submitted before the ld. CIT(A). The ld. CIT(A) passed the order ex-parte since assessee has not complied with any of the notices issued for fixing the appeal and accordingly the ld. CIT(A) confirmed the action of the ld. Assessing Officer by observing as under at paras 8.2 and 8.3
‘’8.2 In addition to the above, during the course of appellate proceedings, numerous notices were issued to the appellant calling for written submissions along with documentary evidences in support of his grounds of appeal. However, the appellant has not made any written submissions along with documentary evidences in support of grounds of appeal, though the notices issued to the appellant were delivered to the email of the appellant. The screen shots showing that the notices were delivered to the appellant have been affixed above in this order. Therefore, I do not find any reason to interfere in the order of the assessing officer passed under section 144 of the Income Tax, 1961 dated 30.09.2019 with the assessed income of Rs. 18,62,726/- in respect of addition of Rs. 10,50,000/- under section 69A of the Income Tax Act, 1961 towards unexplained cash deposited by the appellant during demonetization period. Accordingly, this grounds of appeal No. 3 is required to be dismissed. 8.3 Therefore, this grounds of appeal No.3 is dismissed’’.
Aggrieved, assessee preferred an appeal before the Tribunal.
Before I decide the above issue, I will adjudicate the second issue. The second issue in this appeal of assessee is against the order of the ld. CIT(A) in making addition of business income estimating the cash deposits made in SBI account during entire period falling in the financial year 2016-2017 relevant to assessment year 2017-2018 and estimating profit @8% and thereby adding the same at Rs.8,12,726/- (excluding demonetized cash which is separately added by the ld. Ld. Assessing Officer and dealt in the above ground).
Brief facts of the case are that the ld. Assessing Officer during 6. the best judgment assessment noted that the total cash deposits made in the current account of SBI of assessee‘s proprietorship concern and treated the same as business receipts of Rs.1,12,09,082/- excuding cash deposit made during demonetization period a sum of Rs.10,50,000/- balance amount was treated as business receipts of Rs.1,01,59,082/-. The ld. Assessing Officer proposed in the show cause notice dated 26.08.2019 that cash deposit in the bank statement of the assessee during the entire previous year relevant to assessment year 2017-2018 except the demonetized currency be treated as business receipts and the profit is being estimated at 8% and thereby made an addition of Rs.8,12,726/-. Aggrieved, assessee preferred an appeal before the ld. CIT(A).
The ld. CIT(A) confirmed the action of the ld. Assessing Officer as assessee has non compliant with any of the notices issued as noted by the ld. CIT(A) by giving findings at paras 9.2 and 9.3.
‘’9.2 In addition to the above, during the course of appellate proceedings, numerous notices were issued to the appellant calling for written submissions along with documentary evidences in support of his grounds of appeal. However, the appellant has not made any written submissions along with documentary evidences in support of grounds of appeal, though the notices issued to the appellant were delivered to the email of the appellant. The screen shots showing that the notices were delivered to the appellant have been affixed above in this order. Therefore, I do not find any reason to interfere in the order of the assessing officer passed under section 144 of the Income Tax, 1961 dated 30.09.2019 with the assessed income of Rs. 18,62,726/- in respect of addition of Rs.8,12,726/- estimating at 8% on total receipts excluding cash deposits made during demonetization period. Accordingly, this grounds of appeal No. 4 is required to be dismissed. 9.3 Therefore, this grounds of appeal No.4 is dismissed’’.
Aggrieved, assessee preferred an appeal before the Tribunal.
I have heard rival contentions and gone through the facts and circumstances of the case. Before me, ld. Counsel for the assessee stated the order of the ld. Assessing Officer is exparte and best judgment assessment framed u/s.144 of the Act. Moreover the ld. CIT(A) also passed exparte order and she argued that this is in violation of principles natural justice as notices were served by Email by the National Faceless Appeals Centre (NFAC) could not be accessed by the assessee as he is very old and settled in village after winding up of the business. Ld. Counsel for the assessee only requested that one more opportunity may be provided so that she can present full facts before the ld. Assessing Officer.
On the other hand, ld. Senior Departmental Representative objected for setting aside the issue back to the file of the ld. Assessing Officer for a reason that several opportunities were given to the assessee by the ld. Assessing Officer and secondly by ld. CIT(A) but assessee being non co- operative, appeal should not be set aside.
I have gone through the facts and circumstances of the case. No doubt the ld. CIT(A) and the ld. Assessing Officer has provided enough opportunities but the assessee failed to avail the same. Now the assessee has filed documents before the Bench in his paper book consisting of pages 1 to 135 which can be verified only at the level of the ld. Assessing Officer. So, In the interest of natural justice and going by the facts and circumstances of the case that assessee being a old person and settled in his native village could not be access to his email, hence I set aside the order of the ld. Assessing Officer and that of ld. CIT(A) and remit the matter back to the file of the ld. Assessing Officer for fresh adjudication. For setting aside the appeal, the ld. Counsel of the assessee fairly agreed that assessee will pay a cost of Rs.5,000/- to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras on or before 28.03.2024. The assessee will pay this cost and produce the receipt before the ld. Assessing Officer. In term of the above, the orders of the lower authorities are set aside and matter restored back to the file of the ld. Assessing Officer for fresh adjudication. Needless to say that the ld. Assessing Officer will allow reasonable opportunity of being heard to the assessee and assessee is also directed to represent his case as and when notice is issued, otherwise adverse view can be taken against the assessee. The appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee in 11. /2023 for assessment year 2017-2018 is allowed for statistical purpose.
Order pronounced in the open court at the time of hearing on 20th day of February, 2024, at Chennai.