INCOME TAX OFFICER WARD-1, PANVEL, AAYKAR BHAVAN PANVEL vs. THANARAM PEERARAMJI CHAUDHARY, PANVEL

PER RAMA KANTA PANDA, V.P. :

This appeal filed by the Revenue is directed against

the order dated 10.02.2024 of the learned CIT(A)-NFAC, Delhi,

relating to the assessment year 2017-2018.

reads as under :

“On the facts and circumstances of the case and in law,

the Ld. CIT(A) failed to appreciate that the submissions

made by the assessee during appellate proceedings were

in the nature of additional evidences and therefore erred in

not allowing the A.O. to examine the additional evidence

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admitted by him as per the provisions u/s.46A(3) of the

I.T. Rules, 1962.”

an individual and is engaged in the business of general store

of food grains and FMCG products in Panvel Market Yard. The

assessee has not filed his return of income for the impugned

assessment year. It was observed that during the period of

demonetization, the assessee had deposited cash aggregating

to Rs.34,34,600/- in her bank accounts. Since the assessee

had not filed his return of income, the Assessing Officer issued

statutory notice u/sec.142(1) on 13.12.2007 asking the

assessee to file return of income in prescribed Form. Despite

service of notice, there was no compliance from the side of the

assessee. The Assessing Officer, therefore, obtained

information u/sec.133(6) of the Act from the Banks and again

issued show cause notices to the assessee on 04.09.2019,

07.09.2019 through ITBA system asking the assessee to

submit his reply. However, there was no compliance from the

side of the assessee. The Assessing Officer, therefore,

proceeded to complete the assessment u/sec.144 of the Act.

3.1. The Assessing Officer noted that during the period

of demonetization i.e., from 09.11.2016 to 31.12.2016, the

assessee had deposited cash aggregating to Rs.39,76,600/- in

his bank accounts with RBL Bank & Panvel Co-Operative

Urban Bank Ltd. Panvel Branch. He further noted that the

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total cash deposits for the period 01.04.2016 to 31.03.2017

was Rs.2,40,64,670/-. Since the assessee did not respond to

the notice and there was no answer to justify the high cash

deposits of Rs.2,00,88,070/- [i.e., Rs.2,40,64,670/- (-)

Rs.39,76,600/-], the Assessing Officer treated the amount of

Rs.2,00,88,070/- as unexplained money under the provisions

of Sec.69A of the Act. Similarly, in absence of any satisfactory

reply to explain the other deposits of Rs.14,39,146/- in the

bank accounts maintained with RBL Bank & Panvel Co-

Operative Urban Bank Ltd. Panvel Branch, the Assessing

Officer made the addition of the same u/sec.69A of the Act. As

mentioned earlier, the assessee had deposited cash

aggregating to Rs.39,76,600/- during the demonetization

period. In absence of any satisfactory reply to substantiate the

cash deposited during the demonetization period, the

Assessing Officer made addition of the same u/sec.69A. Thus

the Assessing Officer determined the total income of the

assessee at Rs.2,55,03,816/-.

submissions and filed certain additional evidences. The Ld.

CIT(A) without calling for any remand report from the

Assessing Officer or without giving any opportunity to the

Assessing Officer to go through the same, admitted the

additional evidences filed before him and directed the

Assessing Officer to determine the total income of the assessee

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by computing the business income @ 8% of the gross receipts

of Rs.2,52,37,329/- i.e., to determine the income of the

assessee at Rs.20,19,018/- on estimate basis. The order of the

Ld. CIT(A) accepting the additional evidences and directing the

Assessing Officer to determine the profit @ 8% of the total

deposits are as under :

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Revenue is in appeal before the Tribunal.

5.1. The Learned DR strongly opposed the order of the

Ld. CIT(A) and submitted that when the assessee had not filed

the return of income and has not participated in the

assessment proceedings nor filed any details to substantiate

the huge cash deposited during demonetization period as well

the pre and post-demonetization period and there are other

credits appearing in his bank account, the Ld. CIT(A) without

calling for any remand report from the Assessing Officer or

without giving any opportunity to the Assessing Officer has

admitted the additional evidences and arbitrarily directed the

Assessing Officer to estimate the income of the assessee 8% of

the cash deposits which is not correct. He submitted that the

order of the Ld. CIT(A) be reversed. In his alternative

contention, he submitted that the matter should be restored to

the file of Assessing Officer for deciding the issue afresh.

hand, submitted that the Assessing Officer has called for

information from the Banks u/sec.133(6) of the Act. Further,

the Ld. CIT(A) has analyzed the details furnished by the

assessee and has passed a speaking order which is just and

proper under the given facts and circumstances. She

accordingly submitted that the order of the Ld. CIT(A) be

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upheld and the grounds raised by the Revenue should be

dismissed.

the sides, perused the order of the Assessing Officer and the

Ld. CIT(A) and the paper book filed on behalf of the assessee.

We find that the assessee in the instant case has not filed his

return of income for the impugned assessment year. Since the

assessee had deposited cash of Rs.34,34,600/- during the

demonetization period, the Assessing Officer issued notice

u/sec.142(1) of the Act to the assessee to file his return of

income. However, the assessee neither filed his return of

income nor given reply to any of the subsequent statutory

notices issued by the Assessing Officer. Since the assessee did

not file any reply in response to the notices issued by the

Assessing Officer nor filed his return of income, the Assessing

Officer completed the assessment u/sec.144 of the Act

determining the total income of the assessee at

Rs.2,55,03,820/- wherein he made addition of

Rs.2,00,88,070/- being cash deposits made both pre and post-

demonetization period and Rs.14,39,146/- being other

deposits in the bank accounts and Rs.39,76,600/- being cash

deposited during demonetization period. We find the assessee

filed certain additional evidences before the Ld. CIT(A), based

on which, the Ld. CIT(A) restricted the income of the assessee

to Rs.20,19,018/- by directing the Assessing Officer to

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estimate the business income of the assessee at 8% on the

gross receipts of Rs.2,52,37,729/-. We find while doing so, the

Ld. CIT(A) has neither called for any remand report from the

Assessing Officer nor given an opportunity to the Assessing

Officer to rebut the various details filed by the assessee. It is

an admitted fact that the assessee neither filed the return of

income nor responded to the queries raised by the Assessing

Officer to substantiate the nature and source of the cash

deposits made during the demonetization period, other

deposits in the bank accounts and cash deposits during pre

and post-demonetization period. We find the Ld. CIT(A) in the

instant case has simply accepted the submissions made by the

assessee and directed the Assessing Officer to estimate the

profit @ 8% of the total deposits. Since the assessee neither

filed his return of income nor gave any reply to various queries

raised by the Assessing Officer during the assessment

proceedings, therefore, the Ld. CIT(A) under the given facts

and circumstances of the case should have called for a

remand report from the Assessing Officer, which he failed to

do so. Considering the totality of the facts and circumstances

of the case and in the interest of justice, we deem it proper to

restore the issue back to the file of the Assessing Officer with a

direction to decide the issue afresh and in accordance with

law, after giving due opportunity of being heard to the

assessee. The assessee is also hereby directed to appear before

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the Assessing Officer and file the requisite details as required

by the Assessing Officer, failing which, the Assessing Officer is

at liberty to pass appropriate order as per law. We hold and

direct accordingly. The grounds raised by the Revenue are

accordingly allowed for statistical purposes.

statistical purposes.

Order pronounced in the open Court on 29.11.2024.

Sd/- Sd/- [MS. ASTHA CHANDRA] [RAMA KANTA PANDA] JUDICIAL MEMBER VICE PRESIDENT

Pune, Dated 29th November, 2024

VBP/-

Copy to

//By Order//

//True Copy //

Sr. Private Secretary, ITAT, Pune Benches, Pune.