Loading judgment…
Facts
The assessee, an individual and director in Shah Travels Pvt Ltd, had cash deposits, credit card transactions, and commission income. The AO completed ex-parte assessments under Section 147 r.w.s. 144 due to non-compliance, adding the amounts to his income. The CIT(A) dismissed the appeals due to continued non-compliance.
Held
The tribunal remanded the matter back to the CIT(A) to provide the assessee one more opportunity to furnish documentary evidence, specifically regarding the claim that the financial transactions belonged to the company. A token cost of Rs. 5,000 was imposed on the assessee for intentional non-compliance.
Key Issues
The key legal issues were the ex-parte assessment of unexplained cash deposits and financial transactions, and the denial of natural justice due to lack of opportunity to present evidence.
Sections Cited
Section 147, Section 144, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘DB’. AMRITSAR
Before: SHRI MANOJ KUMAR AGGARWAL & SHRI UDAYAN DASGUPTA
O R D E R Per Udayan Dasgupta, J.M.: These two appeals are filed by the assessee against the orders of the ld. CIT (A) NFAC, Delhi dated 27.08.2024, for both the years, passed u/s 250 of the Income Tax Act, 1961(henceforth the Act ) which has emanated from the orders of the AO (assessment unit) dated 20.12.2017 for AY 2010-11 and dated 30.12.2018 for AY 2011-12, both passed u/s 147 rws 144.
& 566/ASR/2024 A.Ys. 2010-11 & 2011-12 2
The assessee has filed an application for adjournment of hearing seeking further time for gathering of information and for submission of evidences, which is rejected and we proceed to dispose of the case on basis of materials available on record.
Brief facts are that the assessee is an individual and is also a director in a company “M/s Shah Travels Pvt Ltd”, and has deposited cash amounting to Rs. 16.26 lakhs in his savings account with HDFC bank and has financial transactions through credit cards amounting to Rs.25.99 lakhs and has also received commission amounting to Rs. 7.69 lakhs, from “make my trip” as per information gathered from Form 26AS.
In absence of any return filed in regular course, the proceedings were initiated vide notice u/s 148 on 24/03/2017 (as per procedure) after necessary approval, and due to non-compliance on the part of the assessee, the assessment was completed on a total income of Rs. 49.94 lakhs, exparte.
The matter carried in first appeal has been dismissed by the Ld CIT (A ) NFAC, in absence of any compliance to notices issued on four separate dates (after seeking adjournments on two occasions) which proves that the hearing notices has been duly served on the assessee & 566/ASR/2024 A.Ys. 2010-11 & 2011-12 3 (and the non-representation on the part of the assessee was somewhat intentional).
Now before the tribunal the Ld AR of the assessee seeks adjournment for gathering more evidences and in the grounds of appeal filed in form 36, has raised grievance regarding lack of opportunity provided by the Ld first appellate authority ( conveniently forgetting the adjournments sought and allowed ) and has submitted that the cash deposits in the bank account of the assessee are that of the company “Shah Travels Pvt Ltd”, in which the assessee is a director and all financial transactions are recorded in the books of the company and it does not belong to the assessee individually ( but has not submitted any documentary evidences to support his contention neither before the AO , nor before the Ld CIT(A) and neither before the tribunal and has now sought further time for production of documentary evidences.
The Ld DR relied on the order of the Ld CIT (A ) but raised objection regarding acceptance of fresh materials.
We have heard the parties and considered the materials on record and we find that the matter needs to be adjudicated by the Ld first appellate authority on the basis of fresh materials which the assessee seeks to file to substantiate his case of financial transactions relating to the private limited company in which he is a director.
& 566/ASR/2024 A.Ys. 2010-11 & 2011-12 4 9. However, we also note that it is a fit case for imposition of costs, where the assessee has intentionally avoided compliance before lower authorities, and now praying for submission of fresh materials at this stage, and as such we impose a token cost of Rs.5,000/- (Rs. Five thousand) to be paid to the credit of Prime Ministers National Relief Fund, within fifteen days from the date of communication of this order.
However, on the principles of natural justice we remand the matter back to the Ld first appellate authority to allow the assessee one more opportunity of furnishing necessary documentary evidences, he wishes to rely upon in support of his grounds of appeal and we direct the assessee to fully cooperate in the appellate proceedings.
Notice to be issued in the email id of the assessee and also in the mail of the counsel mentioned in form 35.
In the result the appeal is allowed for statistical purpose.
ITA No : 566/ ASR / 2024 (Asst year : 2011-12)
Issues and facts contained in this year being identical, our observation and findings in 2024, applies mutatis mutandis and the appeal for this year is also remanded back to the Ld first appellate authority for fresh adjudication.
& 566/ASR/2024 A.Ys. 2010-11 & 2011-12 5 (The token cost imposed in ITA 565/ASR/2024, shall cover both the years under appeal in total).
In the result the appeal is allowed for statistical purpose.
In the result both the appeals of the assessee are allowed for statistical purpose.