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Income Tax Appellate Tribunal, A BENCH,
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE
आदेश / ORDER PER DR. DIPAK P. RIPOTE, AM: These two appeals filed by the assessee against the two separate Orders of Commissioner of Income Tax(appeal)(NFAC) both dated 15/05/2024 for AY 2015-16 and AY 2016-17 emanating from Ex-Party Assessment Orders dated 16/03/2022 and 17/03/2022 respectively. 2) Both appeals were heard together and decided by this common order. The assessee has raised the following grounds of appeal for AY 2015- 16 in ITA 1475/PUN/2024 :
“1. The order of the learned CIT(A) confirming the addition of Rs. 65,47,181/- U/s 69A of I.T. Act made by the A.O. is erroneous as CIT(A) has not considered any grounds of appeal made by appellant at the time of filing the appeal. The appellant had made a detailed submission explaining the cash deposits made by the appellant in the account maintained with M/s. Shri Renuka Mata Multi State Urban Co-op Credit Society Ltd. But the learned CIT(A) has ignored all the submissions made by the appellant and has not even discussed the same in his order. It is unjust and we request Your Honour to kindly accept the documents submitted by the appellant and give him relief and oblige.
2. The A.O. has added Rs. 65,47,181/- on account of credits in the account maintained with Renuka Mata Multi State Urban Coop. Credit Society without conducting any enquiries and treating these credits as unexplained income. The A.O. did not possess any information and he has presumed the income is unreported. Nowhere in the order has the A.O. proven that the due to the credits in the said account mentioned, the appellant has derived any gains. Thus, the order is bad in law and may please be quashed.
3. The section 69A states that "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account.....". Thus, the section clearly states that the only if the A.O. proves that these transactions are not recorded in assessee's books of accounts, then only the addition can be made under the above section. But the A.O. has nowhere in the order proved that the appellant had not maintained his books of account or if maintained had not disclosed the transactions in the said bank account in his books of account. Thus, the claim that the appellant has not maintained his books of account is false. Hence, the addition made by the A.O. and confirmed by the CIT(A) is unjustified and should be deleted.
The debit side of the account is not at all considered by the A.O. The whole balance of the account has been either transferred or withdrawn. Only considering the cash deposits without considering the cash withdrawals is absurd and unreasonable. Hence, treating the total of credits in the account as income is illogical. The appellant had submitted a detailed cash statement to the CIT(A) showing the source of cash deposit which is basically the cash withdrawals. The concept of peak credit is one of the accepted methods of accounting principles for the purposes of computing the real profit. The CIT(A) has not even discussed the same in his order. We rely on the following judgements: a. Commissioner of Income-tax- III v. Tirupati Construction Co. [2015] 55 taxmann.com 308 (Gujarat) b. S. Venkat Reddy v. Income-tax Officer, Ward-8 (2), Hyderabad [2016] 76 taxmann.com 128 (Hyderabad Trib.) c. Commissioner of Income-tax (Central), Kanpur v. Fertilizer Traders [2014] 42 taxmann.com 476 (Allahabad) d. Income-tax Officer v. Maheshkumar Jayantilal Vora [2004] 3 SOT 96 (Rajkot) e. Commissioner of Income-tax -VI, Hyderabad v. Purushottam Jhawar [2013] 40 taxmann.com 533 (Andhra Pradesh) Kindly accept the cash statement submitted with CIT(A) alongwith and we request your Honour to kindly delete the addition made and oblige.
5.Also, the appellant is a small trader and is not aware of the complex procedures of assessment. This led to no response to the assessment proceedings as he relied on his tax consultant to do the same which he failed to do. This led to a delay in filing the appeal as he was not aware of any order of assessment being passed against him. The tax consultant did not attend the proceedings nor informed him about the appeal filing procedure and time limit. Even the email address of the appellant was that of the tax consultant and hence there were no notices or orders received by the appellant. The appellanthad explained the above facts at the time of filing the appeal and also at the time of making the submissions before the Learned CIT(A). He had even filed an affidavit 2 for the same although the Ld. CIT(A) has mentioned that no material evidence has been uploaded by the appellant in para no. 5.2 of the order which is incorrect. But the Learned CIT(A) did not condone the delay in filing the appeal. He also did not discuss about the affidavit submitted by the appellant in support of his condonation of delay petition. The facts and circumstances of the case law cited by the Ld. CIT(A) in para no. 5.8 are totally different than that of the instant appeal. In the case cited, the petitioner is a public limited company with over 100 years of existence and having a huge staff and a separate accounts department for handling legal matters. It cannot be compared to the appellant who is a petty trader not even having any taxable income. Even the delay in that case cited was more than 3 years whereas in the appellant's case it is 186 days. Also there was no submission made nor affidavit submitted by the assessee in the case cited, whereas in the instant case the appellant has submitted both. In the case cited, the delay was due to languid and inane conduct of the assessee which is not the case with the appellant as it was purely due to non-professional conduct of the consultant with no fault of the appellant. The Ld. CIT(A) has mentioned that the appellant was well aware of the technical aspects of the case and was never in dark whereas the truth is exactly the opposite. The appellant was not being negligent about the law. He was just facing assessment proceedings for the first time in his life. The appellant has assessed for three assessment years for the same issue of cash deposit in M/s. Shri Renuka Mata Multi State Urban Co-op Credit Society Ltd. and the facts of all the three cases are exactly the same. We cite the case of Sri Suhas Suresh Shet v. Income-tax Officer, International Taxation (2022] 140 taxmann.com 96 (Bangalore Trib.), wherein the delay was condoned as the delay in filing the appeal was due to the fault of tax consultant. Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that acause would be decided on merits after hearing the parties. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. Hence in view of the above we request Your Honour to kindly condone the delay and accept the documents submitted and delete the addition made and oblige.
It is humbly prayed that the reliefs as prayed and such other and further reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice, may please be granted.
The Appellate craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.”
3) Submission of Ld.DR : Ld.DR relied on the orders of the CIT(A) and AO. However the Ld.DR submitted that in assessee’s own case for AY 2017-18 the Hon’ble ITAT in ITA 1477/PUN/2024 has set aside the order of the CIT(A) for de-novo adjudication . Ld.DR filed copy of the said order.
4) Findings and Analysis : No one appeared on behalf of the Assesssee. We have heard both the parties and perused the records. We will discuss the facts of the case for AY 2015-16 . 4.1) For AY 2015-16 as per the Assessment Order the Assessing Officer had received information that the Assessee had deposited cash of Rs.65,47,181/- in Renuka Mata Multi State Urban Cooperative Credit Society Ltd during the year. The AO issued notice under section 148. It was not complied. The AO then issued various notices. According to the AO assessee had not submitted any submission hence AO made addition of Rs. 65,47,181/- u/s 69A of the Act in the Ex-party assessment order. 4.2) The Assessee filed appeal before the Ld.CIT(A) which was delayed by 186 days. The Assessee gave elaborate reasons in the Form 35 for delay. The Assessee explained that he is a small trader , does not understand anything about Income Tax. He explained that he does not understand anything about Computer and email. In Form 35 the assessee has explained elaborately the reasons for delay. However, the Ld.CIT(A) dismissed the appeal on the ground of Delay. 4.3) As per the Assessment Order and CIT(A)’s order, the AO has not obtained copy of Bank Statement from the impugned Renuka Mata Multi State Urban Cooperative Credit Society Ltd. The AO has not made any analysis of these impugned deposits. AO has not analyzed the Debits. However, it is an admitted fact that the Assessee had filed Return of Income u/s 139 for AY 2015-16 on 31/12/2015 declaring total income of Rs. 3,06,290/-. It is also observed that Assessee had filed Return of Income for AY 2016-17 on 7/6/2016 declaring total income at Rs.3,12,080/-u/s 139(1). Even for AY 2017-18 the assessee had filed return u/s 139(1) of the Act. Thus, apparently it seems that assessee had been filling Regular Return of Income. CBDT had issued specific guideline for verification of Cash Deposits, the AO had not followed the same. As per the said guidelines the AO had to obtain copy of Bank Statement but in this case, the AO had not obtained copy of the bank statement. The AO has not mentioned the Account Number. Rather it is apparent from the records that AO has made the addition merely based on the information received on “Insight Portal” of the Income Tax without making any inquiry. The AO has not even bothered to mention what was the source of Income as per the return of income which has been filed by the assessee. We have read the reasons recorded by the AO for reopening , even in the reasons the AO has merely referred to the Information received and arrived at the conclusion of escapement of Income. 4.4) It is observed that ITAT in ITA 1477/PUN/2024 in assessee’s own case for AY 2017-18 in similar circumstances have set aside the Order of Ld.CIT(A) for de-novo adjudication. We are convinced that there were reasonable and sufficient reasons for delay in filling appeal before the CIT(A). The substantial justice shall prevail over procedural aspect. In these cases in the interest of justice it is necessary to condone the delay as the AO has not bothered to carry out any investigation. In these facts and circumstances of the case respectfully following the ITAT order in assessee’s own case (supra) , we set aside the order of Ld.CIT(A) to CIT(A) for de-novo adjudication . CIT(A) shall provide opportunity to the assessee. 5) Accordingly, the appeal of the assessee is allowed for statistical purpose. 6) ITA 1476/PUN/2024 : In ITA 1476/PUN/2024 the Ld.CIT(A) has dismissed the appeal of the assessee on the ground of delay of 185 days. All other facts are identical to the appeal in ITA 1475/PUN/2024. Hence, our decision in ITA 1475/PUN/2024 will apply mutatis mutandi to the ITA 1476/PUN/2024. Accordingly, the order of the CIT(A) is set aside to CIT(A) for de-novo adjudication, thus the appeal of the assessee ITA 1476/PUN/2024 is allowed for statistical purpose. The assessee shall be provided opportunity of hearing.