Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, VARANASI CIRCUIT BENCH ‘SMC’, VARANASI
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2012-13 Pankaj Kumar Gupta v. The Income Tax Officer Sadar Vajar Ward 3(1) Atraulia Main Market Azamgarh Azamgarh (U.P) TAN/PAN:AOYPG3139A (Appellant) (Respondent) Appellant by: S/Shri Piyush Kumar Kamal and Abhishek Kumar Gupta, Advocates Respondent by: Smt Amandeep Kaur, D.R. O R D E R have been preferred by the Assessee against order dated 31.08.2023, passed by the National Faceless appeal Centre, Delhi (NFAC) for Assessment Year 2012-13, confirming the order of the Assessing Officer (AO) in quantum proceedings and also in penalty proceedings.
2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash deposits to the tune of Rs.14,92,400/- in his Saving Bank Account. The AO issued statutory notices to the assessee, requiring the assessee to explain the source of cash deposits. The AO, thereafter, issued notice under section 148 of the Income Tax Act, 1961 (hereinafter called “the Act’) and reopened the assessment under section 147 of the Act. However, the assessee did not respond to this notice also. The AO, therefore, proceeded to complete the assessment under section 147 read with section 144 of the Act. While completing the assessment under section 147 read with 144 of the Act, the AO treated the cash deposits of Rs.14,92,400/- made by the assessee in his bank account during the year under consideration as his unexplained income and added the same to the total income of the assessee. Apart from this, the AO also added a sum of Rs.6,120/- to the total income of the assessee under the head ‘other source of income’, being bank interest received by the assessee from the SB account.
2.1 Subsequently, the AO initiated penalty proceedings and statutory notices were issued to the assessee. However, during the penalty proceedings also, none attended on behalf of the assessee before the AO. In the absence of any bonafide explanation from the side of the assessee, the AO held that the assessee had concealed the particulars of income of Rs.14,98,600/- and, accordingly, he imposed a penalty of Rs.3,66,248/- under section 271(1)(c) of the Act, vide order dated 16.03.2022.
3.0 Aggrieved, the assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee in quantum proceedings and confirmed the order imposing penalty under section 271(1)(c) of the Act by passing an order ex-parte qua the assessee.
4.0 Now, the assessee has approached this Tribunal challenging the orders of the AO as well as the NFAC by raising the following grounds of appeal:
1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144 of the Act without appreciating that the same were without jurisdiction and hence deserved to be quashed as such.
1.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no specific relevant, reliable and tangible material on record to form a "reason to believe" that income of the appellant had escaped assessment and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable.
1.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that appellant was not liable to furnished return of income even otherwise there was no failure on the part of assesse to disclose fully and truly all material facts necessary for assessment and as such action u/s 147 was in excess of jurisdiction; 1:3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that reasons recorded mechanically without application of mind do not constitute valid reasons to believe for assumption of jurisdiction u/s 147 of the Act 1.4 That in absence of any valid approval obtained under section 151 of the Act, initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/144 of the Act are invalid and deserve to be quashed as such.
1.5 That even the notice u/s 148 issued on 29.03.2019 for AY 2012-13 was barred by limitation as no notice u/s 148 of the Act could have been validly issued after the expiry of 6 years from the end of the relevant assessment year as per the old provisions of section 147 to section 151 existing on the statute books upto 31.3.2021.
1.6 That in the instant case the initiation of the reassessment proceedings under section 148 of the Act is barred by limitation and action of authorities was totally arbitrary as the same proceeds on non-existent allegation and even while granting sanction u/s 151 of the Act, sanctioning authority has also mechanically and without application of mind and without looking the material on record has granted sanction which is unsustainable in law.
That no notice u/s 148 of the Act date 29.03.2019 served in any manner, therefore without service of notice, an assessment framed u/s 147 of the Act are invalid and deserve to be quashed as such..
3. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 14,98,600/- representing cash deposits in Bank and held to be alleged unexplained credit u/s 69 of the Act.
3.1 That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so made and sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.
3.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that bank account of the appellant does not constitute books of account and therefore even otherwise addition sustained is otherwise misplaced, misconceived and untenable
That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in proceedings to dispose of the appeal ex parte without granting any fair and proper opportunity of being heard to the appellant.
4.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was reasonable cause for the appellant for not causing appearance on the dates fixed for hearing and as such disposal of the appeal without granting fair, meaningful and proper opportunity is untenable.
4.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that nonappearance of the appellant on the date of hearing was neither intentional nor deliberate and is not a case where appellant is not interested in prosecuting its appeal.
GROUNDS RAISED BY THE ASSESSEE IN ITA NO.126/VNS/2023:
That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding penalty u/s 271(1)(c) of the Act on the basis of the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144 of the Act without appreciating that the same were without jurisdiction and hence deserved to be quashed as such.
2. That the learned Commissioner of Income Tax (Appeals) has proceeded to uphold the levy of penalty on a subjective, arbitrary and, whimsically basis. Moreover, she has proceeded to arrive at conclusions on factually incorrect basis and, total misconception of the provisions of law.
2.1 . That even proceeding initiated u/s 147 of the Act and notice u/s 148 issued for AY 2012-13 was barred by limitation as no notice u/s 148 of the Act could have been validly issued after the expiry of 6 years from the end of the relevant assessment year as per the old provisions of section 147 to section 151 existing on the statute books upto 31.3.2021 and penalty proceeding on such basis proceeded to arrive at conclusions on factually incorrect basis and, total misconception of the provisions of law.
2.2. That the penalty so sustained is wholly untenable, since the same has been sustained, in the absence of any satisfaction recorded by the learned Assessing officer in the Assessment order
That the learned Commissioner of Income Tax (Appeals) has grossly erred both on facts and in law in sustaining the penalty of Rs.3,66,248/- levied under section 271(1)(c) of the Income Tax Act 1961 by Assessing Officer, National Faceless Assessment Centre, Delhi 3.1 That the learned Commissioner of Income Tax (Appeals) has further failed to appreciate that assesse had not furnished any inaccurate particulars of its income to the tune of Rs.15,04,720/- and as such, the penalty so confirmed is wholly incorrect, unjustified & unwarranted in as much as the same is based on mere subjective opinion, which is wholly untenable in law.
5.0 During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that notices sent by the AO in the quantum proceedings as well as penalty proceedings were sent on a wrong address and, therefore, there was no effective service of notice on the assessee, resulting in non-representation on behalf of the assessee before the AO. The Ld. A.R. further submitted that the issue of service of notice by the Office of the AO on a wrong address was raised before the NFAC, which did not consider the submissions of the assessee in this regard and dismissed the appeal of the assessee in limine. The Ld. A.R. prayed that if an opportunity is given, the assessee will produce all the relevant documents in support of his claim before the AO.
6.0 Per contra, the Ld. Sr. D.R. submitted that the ld. CIT(A) had duly considered the submissions of the assessee relating to service of notice by the AO on a wrong address and rejected the same.
7.0 However, both the parties were in agreement that the matter may be restored to the file of the AO for deciding the same afresh.
8.0 I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the AO with the direction to provide one opportunity to the assessee to present his case and produce the necessary evidences in support of the impugned transactions entered into by the assessee during the year under consideration. I also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex- parte qua the assessee. Since the quantum appeal has been restored to the AO, the penalty appeal is also being restored to the file of the AO for re-adjudication after giving proper opportunity to the assessee.
9.0 In the result, both the appeals of the assessee stand allowed for statistical purposes.
Order pronounced in the open Court on 10/10/2025.