BOLLAM SAMPATH KUMAR JEWELLERS PRIVATE LIMITED,WARANGAL vs. DCIT., CIRCLE-3(1), HYDERABAD

The assessee raised the following grounds:

Facts of the case, in brief, are that the assessee filed its original return of income declaring total income of Rs.37,41,043/-. The return was processed by the CPC u/s 142(1) of the I.T. Act, 1961. The case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee to which the assessee furnished the requisite details. The Assessing Officer noticed that for the financial year 2017-18 relevant to A.Y 2018-19, the assessee has made cash deposits of Rs.10,09,06,000/- in its bank accounts. The Assessing Officer asked the assessee to furnish the details of source of cash deposits made including cash book, sale register, bank account statement and bank book. The assessee was also asked to explain the source of cash deposits of Rs.10,09,06,000/- with documentary evidence. The assessee only furnished its bank statement copies of its multiple bank accounts. Even after availing sufficient opportunities, the assessee failed to furnish any details/documents to explain source of cash deposits made by it. In view of the above, the Assessing Officer treated the amount of Rs.10,09,06,000/- as unexplained income and added to the income of the assessee u/s 69A of the Act. Penalty proceedings u/s 271AAC was also initiated separately.

In appeal, the learned CIT (A) NFAC dismissed the appeal filed by the assessee and upheld the addition made by the Assessing Officer.

Aggrieved with such order of the learned CIT (A) NFAC, the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that in this case the assessee had filed document and information before the learned CIT (A) and the learned CIT (A) noted down the submission of the assessee in para 5.2 of his order as under:

In para 5.2 which is reproduced herein above, it is the contention of the assessee that the learned CIT (A) should have called for a remand report with regard to the alleged cash book and other documents from the Assessing Officer, it was submitted that these documents will show and explain the availability of cash in the hands of the assessee and therefore, no additions were warranted. Further, the learned CIT (A) NFAC has rejected the request of the assessee and had rejected the request of the assessee for calling for a remand report and accepting the additional evidences and upheld the addition so made without any discussion on merit and in Para 5.3, the learned CIT (A) NFAC held as under:

The learned AR also relied upon the decision of the Coordinate Bench of the Tribunal in assessee’s own case for the A.Y 2017-18 whereby the Tribunal under similar set of facts have remanded back the matter for fresh examination before the authorities below.

The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A) NFAC.

We have heard the rival arguments made by both the sides and perused the material available on record. The learned CIT (A) NFAC rejected the request of the assessee on a hyper technical basis saying that no formal application has been filed by the assessee under Rule 46A demonstrating why the evidence has not been produced by the assessee before the Assessing Officer. In our view, the rules of procedure as enumerated under Rule 46A is a procedure to ensure fair free adjudication of the appeal and is provided under Rules to advance ends of justice and not to be a road blocker in the ends of justice. The rules are hand made tools to achieve the ultimate goal of justice. In our considered view, it is necessary that either the ld.CIT(A), NFAC should have examined the evidence or should have called for a remand report from the Assessing Officer. Both have not done by the ld.CIT(A) NFAC and the CIT(A) NFAC, has dismissed the appeal of the assessee, even without discussion the issue on merit. In view of these facts, the matter is required to be remanded back to the file of Assessing Officer and the Assessing Officer is directed to examine the documents/evidences which have been filed before the learned CIT (A) NFAC or the assessee would file before the Assessing Officer as may be called for to prove that no addition can be made in the hands of the assessee. The assessee is hereby directed to appear before the Assessing Officer at the appointed date and time and furnish the requisite details as called for by the Assessing Officer without seeking any adjournment under any pretext. We hold and direct accordingly.

In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 28th June, 2024.