BABA SHIVAJI KHAWALE,PUNE vs. INCOME TAX OFFICER WARD-8(3), PUNE

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ITA 859/PUN/2024Status: DisposedITAT Pune23 July 2024AY 2016-17Bench: HON’BLE SHRI G. D. PADMAHSHALI (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not aware of the assessment proceedings due to non-receipt of notices. To provide a fair opportunity, the case was set aside and remanded back to the first appellate authority for a de-novo decision.

What were the facts?

The assessee was identified as a 'NON-Filer' and the Revenue received information about a cash deposit of ₹40,94,570/-. The case was reopened, but the assessee failed to file a return or explain the source of funds, leading to an ex-parte assessment.

What were the issues?

Whether the ex-parte assessment was valid when the assessee claims non-receipt of notices and whether the assessee should be granted another opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH PUNE

Before: HON’BLE SHRI G. D. PADMAHSHALI & SHRI VINAY BHAMORE

For Appellant: Mr B B Mane through Mr Ankesh[‘Ld. AR’]
For Respondent: Mr Umashankar Prasad [‘Ld. DR’]
Pronounced: 23/07/2024

ORDER PER G. D. PADMAHSHALI, AM; The assessee is in appeal against the DIN & Order No. ITBA/NFAS/S/250/2023- 24/1062105966(1) dt. 06/03/2024 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] by the National Faceless Appeal Centre [‘NFAC’ hereinafter] passed which in turn confirmed the order of assessment passed u/s 147 r.w.s. 144 of the Act by the National Faceless Assessment Centre [‘NeAC’ hereinafter] anent to assessment year 2016-17 [‘AY’ hereinafter];

2.

After preliminary briefing from the Ld. DR, we deem it fit to reject the request for adjournment and proceeded to adjudicate the matter on merits with the able assistance from the Revenue.

1.

ITAT-Pune Page 1 of 4

3.

Tersely stated the facts of the case are that; 3.1 The assessee is an individual who was identified as ‘NON-Filer’ and in whose case the Revenue was in receipt of information from CRIU/VRU that the assessee made investment through credit/cash deposit of ₹40,94,570/- into an account held by him with ‘Shri Renuka Mata Urban Credit Coop. Society Ltd’ [‘NBFC’ hereinafter]. For the reason, after obtaining approval u/s 151(2) of the Act, the case of the assessee was re-opened u/s 147 of the Act and a notice u/s 148 dt. 30/03/2021 was issued.

3.2 When the assessee failed to a file return in response to aforestated 148 notice and explain the nature & source of proof credit/cash deposits made into his account maintained with NBFC, the Ld. NeAC treated the entire sum credited/deposited as unexplained money u/s 69A of the Act and brought to tax accordingly vide an assessment order dt. 21/03/2022 framed u/s 147 r.w.s. 144 r.w.s. 144B of the Act.

3.3 Aggrieved assessee unsuccessfully contested former addition in an appeal before Ld. NFAC.

4.

Aggrieved by the order of first appellate authority the assessee came in present appeal with following grounds ;

1. The appellant, an individual lacking knowledge of the intricacies of income tax procedures, did not receive notices issued for reopening assessment under section 148 of the Act. These notices were instead sent to an email address associated with vijayjadhav1255@gmail.com, which is unrelated to the appellant. Because of the fact that the appellant was not served with the notices, the Learned Assessing Officer (Ld. AO) of the National Faceless Assessment Centre (NaFAC) Learned Assessing Officer (Ld. AO) erred under circumstances and facts of the case and in law by not providing reasonable opportunity to appellant to submit sufficient explanations, reasons and proper material to rebut addition.

ITAT-Pune Page 2 of 4

2. The Ld. AO erred in law and on facts in assessing the total income of the appellant at Rs. 40,94,570 / - after adding alleged unexplained money u/s 69A and passing assessment order under section 147 r. w. s. 144 of Income Tax Act 1961 (the Act) by treating gross sales amounts deposited by purchasers.

3. Under the circumstances and facts of the case and in accordance with the law, the NATIONAL FACELESS APPEAL CENTRE (NFAC) Learned Commissioner of Income Tax Appeal (Ld. CIT(A)) grossly erred by mechanically confirming the addition of Rs. 40,94,570/- carried out by Ld. AO, which amount was deposited by scrap purchasers at the Jalana branch of Shri Renuka Mata Multi State Urban Cooperative Credit Society Ltd. (in short Society/SRMSCS), on multiple occasions. 4. Appellant contends that, the amount of Rs. 40,94,570/- was bank credits received in the bank by the scrap aggregator dealers for purchase of scrap in bulk. The said amounts is withdrawn from time to time for making further payments to small various local vendors who dumps their scraps on daily basis. Appellant contends that the said money was not any unexplained money at all. 5. The appellant caves leave to add, alter, modify or amend the Grounds of appeal.

5.

Needless to state that grounds of appeal are argumentative in nature and inconsonance with rule 8 of ITAT-Rules, 1963 hence deem unfit for ground wise adjudications. However, it shall suffice to state that, the sole & substantive ground/issue is directed against the ex-parte addition carried out by the Ld. NeAC and ex-parte adjudication by the first appellate authority.

6.

Heard rival parties on limited issue and subject to rule 18 of ITAT-Rules 1963 perused material placed on record and considered the fact & circumstances of these cases in the light of settled legal position and case laws relied upon by rival parties.

ITAT-Pune Page 3 of 4

7.

We note that, the failure on the part of assessee to file return in pursuance of notice issued u/s 148 of the Act and failure to effectively explain the nature & source of proof of credit/cash deposit made into his account held with NBFC was sheerly attributed to non-receipt of notices on the registered email to which assessee had access. This resulted into ex-parte addition/assessment. When the matter travelled in appeal before the first appellate authority the assessee was placed indifferently, thus yielded the same result.

8.

Considering the totality of facts, we are satisfied that the assessee had no knowledge of the on-going assessment proceedings and was for sufficient reason/cause prevented from making effective representation before the Ld. NFAC which resulted into ex-parte assessment/adjudication. In the larger interest of justice, for granting one more opportunity to the assessee we deem it fit to set-aside the impugned order and remand the case back to the stage of first appeal with a direction to the Ld. NFAC to decide the issue de-novo in accordance with law preferably in three effective opportunities and pass a speaking order u/s 250(6) of the Act, ordered accordingly.

9.

The appeal in results is ALLOWED FOR STATISTICAL PURPOSES. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Tuesday, 23rd July, 2024.

-S/d- -S/d- VINAY BHAMORE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 23rd July, 2024. आदेश की प्रतितिति अग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT Concerned. 4. The CIT(A)/NFAC Concerned. 5. DR, ITAT, ‘SMC’ Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.

ITAT-Pune Page 4 of 4

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