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Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE
Before: SHRI RAMA KANTA PANDA & MS. ASTHA CHANDRA
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.
The only effective ground raised by the Revenue 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
2 ITA.No.1003/PUN./2024 admitted by him as per the provisions u/s.46A(3) of the I.T. Rules, 1962.”
Facts of the case, in brief, are that the assessee is 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 3 ITA.No.1003/PUN./2024 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/-.
Before the CIT(A), the assessee made detailed 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
4 ITA.No.1003/PUN./2024 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 :
5 ITA.No.1003/PUN./2024 6 ITA.No.1003/PUN./2024 7 ITA.No.1003/PUN./2024 8 ITA.No.1003/PUN./2024 9 ITA.No.1003/PUN./2024 10 ITA.No.1003/PUN./2024
Aggrieved with such order of the Ld. CIT(A), the 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.
Learned counsel for the Assessee, on the other 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 11 ITA.No.1003/PUN./2024 upheld and the grounds raised by the Revenue should be dismissed.
We have heard the rival arguments made by both 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 12 ITA.No.1003/PUN./2024 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
13 ITA.No.1003/PUN./2024 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.
In the result, appeal of the Revenue is allowed for statistical purposes.
Order pronounced in the open Court on 29.11.2024.