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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI RAJPAL YADAV & SHRI RAKESH MISHRA
Present for: Appellant by : Mayank Rungta, A.R. Respondent by : Madhumita Das, Addl. CIT Date of Hearing : 28.08.2024 Date of Pronouncement : 23.09.2024 O R D E R
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
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.
Dwarka Das Agarwal AY: 2017-18 2. 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 in passing an order u/s. 250 by dismissing appeal against deposit of the sum of Rs. 498000/- which has not been considered by Ld. Addl. /JCIT(A)-1, Pune at all.
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.
4. 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.”
3. 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
of the assessee have been correctly mentioned nor the decision is based upon the impugned order of the Ld. AO which was challenged before the Ld. CIT(A). The Ld. AR, who informed the Bench that it was his first case before the Tribunal, submitted that the assessee was in supervision business and had not disclosed the bank account in the return of the income which was looked after by his elder son, who was following up the matter but had unfortunately expired. Along with the appeal memo, the assessee had filed details in the form of paper book which details were also stated to be filed before the Ld. CIT(A) and pages 61 to 62 which contain the details of supervision charges, page 79 contains the details of bank account in which cash was deposited on 21.11.2016 for Rs. 4,98,000/-. The confirmation for the supervision charges were filed and no TDS was deducted as the turnover was not more than Rs. 1 Crore for the AY 2016-
17. Cash in hand of Rs. 4,23,000/- was shown in the return of income filed on 30.03.2017. The assessment had been made by adding a sum of Rs. 4,98,000/- to the return of income of Rs. 4,97,240/- and the income was assessed at Rs. 9,95,240/-, primarily on account of non-compliance with the notices issued. A sum of Rs. 5,00,000/- was given as a loan to the company in which the assessee is a director, which is out of the cash deposited during the demonetization period.
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
stated in Form-35 was not at all considered and the appeal was dismissed stating that the appellant has dealt in purchase and sale of penny stock shares which is contrary to the grounds of appeal of your appellant as your appellant had not dealt in any share transaction during the assessment year under review. The main ground was deposit of cash of Rs. 498000/- in the bank account during demonetization period for which the Ld. Additional/JCIT (Appeal) has not given any adverse remarks. Now your appellant put forward the written submission in support of his ground of appeal: -
1. The Ld. Additional/JCIT(Appeal)-1, Pune has dismissed the appeal on a wrong perception and also ignoring all the explanations, facts, supporting documentary evidences submitted by the appellant during the appeal hearing and has denied the natural justice to your appellant. She has not uttered any adverse remarks to the submission made by your appellant but still dismissed the appeal. It is very clear from the order of the Ld. Additional/JCIT(Appeal) that the matter discussed in the appeal order is not related to your appellant. At the same time the appellant authority has also not made any adverse remarks on the ground of appeal duly submitted and explained and it can be concluded that the Additional/JCIT(Appeal) had nothing to rebut the written submission with evidences of your appellant and in such situation the order passed by Additional/JCIT(Appeal)-1, Pune may please be quashed.
2. The Ld. Additional/ JCIT (Appeal)-1, Pune has erred in passing the order by dismissing the appeal against the deposit of Rs. 498000/-, the main crux of the assessment order u/s. 144 for A.Y. 2017-18. The appeal has been dismissed on a wrong ground and without considering the facts of the case as well as supporting documentary evidences. It may please be noted that your appellant had deposited Rs. 498000/-in the bank account during demonetization period. Your appellant is a super senior citizen currently having the age of 94 years.
The copy of cash book for the period from 01.04.2016 to 07.11.2016 is submitted vide paper book page no. 56 to 59 and from the cash book your honour will find that the appellant had cash in hand in his business for Rs. 663784/- as on 07.11.2016 and out of the same he has withdrawn Rs. 498000/- and deposited the same in the bank account with Oriental Bank of Commerce on 21.11.2016. The confirmations in respect of cash receipt for supervision charges are also submitted herewith vide paper book page no. 71 to 76 and such confirmations contains the full address and PAN of all the amount payers. From the documents so submitted your honour will find that the sources of business receipts are explained and can be verified. In such circumstances the deposit of Rs. 498000/- in the bank account is not from unexplained sources but out of business receipts and your honour is requested to delete the wrong addition of Rs. 498000/- on this ground.
3. 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.
Dwarka Das Agarwal AY: 2017-18 In the circumstances your honour is requested to quash the order passed by the Additional/JCIT (Appeal)-1, Pune on 17.03.2024 and also delete the addition of Rs. 498000/- on account of cash deposit in bank account on vimzical manner for which necessary documentary evidences have been put forward by your appellant which are self-explanatory. Your appellant shall always be grateful to this Tribunal and the Ld. Members for their natural and legal justice extended to your appellant. It may please be noted that presently the appellant is a 94 years old person and do not have any spot on his life time workings and request you to remove this spot of wrong addition and oblige.”
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.
Order pronounced in the open court on 23rd September, 2024.