DWARKA DAS AGARWAL,PARK CIRCUS vs. INCOME TAX OFFICER, WARD-3(2)KOL, CHOWRINGHEE SQUARE

This appeal filed by the assessee is against the order of the Ld. Addl./JCIT(A)-1, Pune (hereinafter referred to as “the Addl./JCIT(A))” passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18, dated 17.03.2024, which has been passed against the assessment order u/s 144 of the Act, dated 12.12.2019.

The grounds of appeal raised by the assessee are reproduced as under: “1 That on the facts and in the circumstances of the case, the Ld. Addl. JCIT(A)- 1, Pune has erred in law as well as on facts by dismissing the Appeal ignoring the explanation and facts submitted by the Appellant during appeal hearing thereby denying the natural justice to the appellant & completely considering the matter in appeal not related to your appellant.

That on the facts and in the circumstances of the case the Addl. /JCIT(A)-1, Pune has passed wrong order against your appellant which is not at all related to your appellant & considered a wrong order passed by ITO, Ward- 2(3)(7), Surat passed u/s. 143(3) r.w.s. 147 of the I.T. Act not related to your appellant.

That on the facts and in the circumstances of the case the Ld. CIT(A)-1, Pune has erred in determining the appeal on a wrong Asstt. Order not related to your appellant.”

Brief facts of the case are that the assessee is a business man carrying on the business of supervision for transport companies which are engaged in plying and hiring of goods vehicle and other than this has income from interest and from other miscellaneous sources. The assessee had filed his return of income for A.Y. 2017-18 on 30.03.2018 showing total income of Rs. 4,97,240/-. The Computation of Total Income, Income and Expenditure Account for the year ended 31st March, 2017, Balance Sheet as on 31st March, 2017, Business Profit and Loss Account for the year ended 31st March, 2017 and Business Balance Sheet as on 31 March, 2017 were submitted during the course of scrutiny proceedings and have also been submitted before the Ld. CIT(A). From the documents so submitted, it will be found that appellant had earned net profit of Rs. 4,61,740/- from supervision business of transport organization against gross receipt of Rs. 4,74,300/-, interest on savings account for Rs. 1,323/- and other vocational income of Rs. 34,177/- from miscellaneous sources. The case for the said assessment year was selected for scrutiny and notice was served upon the assessee. Subsequently the scrutiny proceedings were carried over and finally an order u/s. 144 was passed on 12.12.2019 on account of non-compliance to the notices issued. After receipt of the said order, the assessee came to know that the query was raised with regard to deposit of cash of Rs. 498000/- in savings account Dwarka Das Agarwal AY: 2017-18 no. 0003215103777 maintained with the Oriental Bank of Commerce, Brabourne Road, Kolkata and finally the same was added to the income and demand of Rs. 5,42,432/- was raised. Being aggrieved with such addition, the assessee preferred an appeal before the Ld. CIT(A), NFAC. In response to the notice u/s 250 of the Act, the assessee submitted the written explanation along with a paper book which contains all the details, documents and supporting evidences. Finally, an order u/s. 250 was passed on 17.03.2024 by the Additional/JCIT(Appeal)-1, Pune and on receipt of the said appeal order the assessee was surprised to note that the grounds of appeal stated in Form No.-35 were not considered and the appeal was dismissed stating that the appellant had dealt in purchase and sale of penny stock shares which is contrary to the facts and grounds of appeal of the assessee. It is stated that the assessee had not dealt in any share transactions during the assessment year under review. The main ground was deposit of cash of Rs. 4,98,000/- in the bank account during demonetization period for which the Ld. Additional/JCIT (Appeal) has not given any adverse remarks. Aggrieved with the order of the Ld. CIT(A), the appeal has been filed.

We have heard the rival contentions and also gone through the facts of the case. It is evident from a perusal of the order of the Ld. CIT(A) that while the details of the assessee, PAN of the assessee, the assessment year date of the order of the Ld. CIT(A) and other details of the status date of order under which the order appeal against was passed, income assessed, tax demanded etc. are correctly mentioned on the first page of the appeal order of the Ld. CIT(A), however, subsequently in the body of the appeal order the facts of the case, the grounds of appeal the observation of the Ld. AO have been picked up from some other case of the ITO, Ward 2(3)(7), Surat and not from the assessment order of the assessee which was impugned in the appeal before the Ld. CIT(A). The Ld. AR requested that the matter may be set aside to the Ld. CIT(A). However, we considered the Dwarka Das Agarwal AY: 2017-18 fact that the assessee is 98 years old, super senior citizen, the order of the Ld. CIT(A) is void-ab-initio as neither the grounds of appeal

The Ld. AR on the other hand stated that the cash deposit was abnormal as included amount was being shown in the bank and the cash was kept for a long period of time which was not normal. The assessee also relied upon the written submission filed which are reproduced as under: “Your appellant is a business man carrying on the business of supervision for transport companies who are engaged in plying and hiring of goods vehicle and other than this have meagre income of interest and from other miscellaneous sources. Your appellant had filed his return of income for A.Y. 2017-18 on 30.03.2018 for total income of Rs. 497240/-. The Computation of Total Income, Dwarka Das Agarwal AY: 2017-18 Income and Expenditure for the year ended 31st March, 2017, Balance Sheet as on 31st March, 2017, Business Profit and Loss for the year ended 31st March, 2017 and Business Balance Sheet as on 31st March, 2017 were submitted during the course of scrutiny proceedings and also submitted herewith (Paper Book Page No. 46 to 48). From the documents so submitted your honour will find that your appellant had earned net profit of Rs. 461740/- from supervision business of transport organization against gross receipt of Rs. 474300/-, interest on savings account for Rs. 1323/- and other vocational income of Rs. 34177/- from miscellaneous sources. The case for the said assessment year was selected for scrutiny and notice was served upon your appellant. Subsequently the scrutiny proceedings were carried over and finally an order u/s. 144 was passed on 12.12.2019 which was served upon your appellant on 07.01.2020. After receipt of the said order, your appellant came to know that the query was raised with regard to deposit of cash of Rs. 498000/- in savings account no. 0003215103777 maintained with Oriental Bank of Commerce, Brabourne Road, Kolkata and finally same was added to the income and demand of Rs. 542432/- was raised upon your appellant Being aggrieved from such illogical addition, your appellant preferred an appeal before CIT(A), NFAC seeking natural and legal justice. In response to the notice u/s. 250, your appellant submitted the written explanation along with a paper book which contain all the details, documents and supporting evidences. Finally, an order u/s. 250 was passed on 17.03.2024 by Additional/JCIT(Appeal)-1, Pune and served upon your appellant. On receipt of said appeal order your appellant was surprised to note that the grounds of appeal

The assessment order of your appellant is submitted vide paper book page no. 23 to 27 and your honour will find that Rs. 498000/- has been added to the returned income of Rs. 497240/- but in the appeal order the returned income is mentioned as 1159060/- and addition of Rs. 157661/- and thus it is very clearly established that the wrong order against your appellant has been passed and the same is required to be quashed. Moreover, the details mentioned in the order were not at all related to your appellant. Some of the differences are mentioned below:- a. In the case of our appellant the appeal was filed for A.Y. 2017-18 whereas the appeal discussed in the appeal order is related to A.Y. 2009-10. b. Whereas the order of your appellant has been passed by ITO. Ward- 3(2)/Kol but in the appeal order it is mentioned as ITO, Ward-2(3)(7), Surat. c. Your appellant had submitted the return for total income of Rs. 497240/- whereas in the appeal order it is mentioned as Rs. 1159060/- d. In the case of your appellant the total income of Rs. 995240/- was assessed u/s. 143(3) for A.Y. 2017-18 whereas the same is mentioned as Rs. 1316720/- in the order sheet. e. There was an addition of Rs. 498000/- in the returned income of your appellant whereas there has been an addition of Rs. 157661/- as per appeal order. f. As per appeal order the addition was due to unexplained cash credit in relation of purchase and sale of penny stock shares whereas the addition to your appellant was cash deposit of Rs. 498000/- in the bank account during demonetization period. g. In the appeal order the grounds of appeal mentioned are completely different from the grounds of appeal submitted by your appellant which can be verified vide paper book page no. 7 to 8 & 22. h. The dates related to issue of notices and their compliances completely mismatch and are different in case of your appellant. i. The decision in the appeal order is based on share transactions and it transpires from the appeal order that the same is neither related to your appellant nor can be applicable to your appellant. In the light of above differences, it can be adjudged that the order passed by the Ld. Additional CIT(Appeal)-1, Pune is bad in law and required to be quashed.

We have heard the rival contentions and also gone through the facts of the case and based upon the request of the Ld. AR, we were inclined to set aside the case to the Ld. CIT(A) to decide the appeal afresh. However, considering the age of the assessee being 98 years and the assessee being a super senior citizen, we felt that it would not be justified to send the appeal before the Ld. CIT(A) before whom the document filed in the paper- book before us were also filed. Since the required evidence of transportation charges received and availability of cash has been filed before us and the cash deposit is not abnormally the higher than the returned income and is more or less at par with the income and the reason for keep the cash at whom have been specified in the written submission, therefore, we find no justification for the addition of Rs. 4,98,000/- deposited in the bank account and the addition of Rs. 4,98,000/- made by the AO, which has been confirmed by the Ld. CIT(A) on account of dismissal of the assessee’s appeal on account of non-prosecution, is hereby deleted and Ground No. 2 of the appeal is allowed.

Ground Nos. 1, 3 and 4 related to erroneous order of the Ld. CIT(A) and since relief has been granted on account of the addition made, these grounds remain of academic interest and do not require any separate adjudication other than the mention that the contention of the assessee is correct. As a matter of observation, we would expect the appellate authority to be more sensitive and careful while deciding the appeals so that not only the appellate proceedings are concluded after appreciation Dwarka Das Agarwal AY: 2017-18 of the correct facts but also the assessees specially those belonging to the category of super senior citizen, are not put to avoidable in convenience and hardship on account of incorrect orders of the appellate authority.

In the result, the appeal filed by the assessee is allowed.