MAHENDRA DALPATBHAI PATEL,SURAT vs. INCOME TAX OFFICER, WARD - 1, BARDOLI

Assessee represented by Shri Krunal Jariwala, CA Department represented by Shri Vinod Kumar, Sr. DR Date of Institution of appeal 14/03/2023 Date of hearing 17/04/2023 Date of pronouncement 17/04/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 18/01/2023 for the Assessment Year (AY) 2011-12. The assessee has raised following grounds of appeal: “1. In view of the facts and circumstances of the case, the ld. CIT(A) erred in law in making addition of Rs. 15,00,000/- on account of unexplained credit in bank u/s 68 of the Act.”

2. Rival contentions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assessee could not file various documents either before the Assessing Officer or before the ld. CIT(A). The Assessing Officer Mahendra Dalpatbhai Patel Vs ITO passed the assessment order under Section 144 r.w.s. 147 of the Income Tax Act, 1961 (In short, the Act) dated 29/11/2018 and made addition of Rs. 15.00 lacs under Section 68 on account of unexplained cash credit. The case of assessee was reopened on the basis of information at ITS data about depositing/cash credit in his bank account. Even before ld. CIT(A), the assessee could not furnish such details. The ld. CIT(A) passed the ex-parte order without discussing the merit of the case. The ld. AR of the assessee submits that he has filed application under Rule 29 of Income Tax (Appellate) Rules, 1963 for seeking permission to file additional evidence. The additional evidence consist of evidence related with joint account of assessee with Ramanbhai Narottambhai Patel who is relative of assessee and record of agriculture holding. The evidences are related with source of credit in the bank account and goes to the root of the matter. The assessee has good case on merit and would suffer irreparable injury if the evidences filed by the assessee is not admitted and the case is not adjudicated on the basis of evidence furnished by the assessee. The ld AR for the assessee submits that keeping in view the principal of natural justice, the assessee may be give one more opportunity of haring on merit.

3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the assessee has not made any compliance either in response to notice under Section 148 of the Act nor Mahendra Dalpatbhai Patel Vs ITO responded to various other notices issued by the Assessing Officer on more than nine occasions. Again before the ld. CIT(A), no compliance was made despite repeated notices to the assessee nor any written submission was furnished. The ld. Sr. DR for the revenue submits that the assesse deserve no leniency. The assessee cannot seek permission to file additional evidence as a matter of right without showing sufficient cause and reason under which circumstances, the assessee could not furnish such evidence before the lower authorities. No such cause is disclosed by the assessee in his application filed before Tribunal.

4. In without prejudice submission, the ld. Sr. DR for the revenue submits that though his primary submission is that his additional evidence may not be admitted, even if such additional evidence is admitted, the matter may be restored to the file of Assessing Officer to consider it afresh and the assessee be also directed to be more vigilant in making compliances of notices of lower authorities and not to disregard the notices of the lower authorities.

against reopening was made by assessee. Thus, the issue of reopening attained finality. The assessee challenged the addition on merit only.

6. The ld. CIT(A) upheld the addition by taking a view that during the appellate stage, the assessee submitted only statement of fact in Form 35 and after that neither replied the notice of hearing nor submitted any evidence to substantiate the grounds of appeal. The ld. CIT(A) without discussing the merit of the case or fact, confirmed the addition. In my view, the order of ld. CIT(A) is not in consonance with the mandate of Section 250(6) of the Act. Section 250(6) of the Act. Section 250(6) mandates that order of ld. CIT(A) must contain facts of the case, points of determination and decision thereon and reasons of such decision. Now before me, the assessee has filed application for permission for Mahendra Dalpatbhai Patel Vs ITO filing additional evidence. Additional evidence consists of details of bank accounts, which is joint account of assessee with Ramanbhai Narotambhai Patel as certified by Manager of Bank of India. Other evidences consist of statement of bank account, PAN card of joint account holder alongwith his Aadhar card and details of land holding. The ld. AR of the assessee during his submission, vehemently submitted that the evidence furnished by the assessee goes to the root of additions and if the evidence is considered, the addition would not survive. Considering the relevancy of evidence furnished by the assessee, and keeping in view of the facts that the both the lower authorities confirmed addition in absence of any representation and evidences, I deem it appropriate to admit such evidences. Considering the fact that such evidences are filed for the first time before the Tribunal, therefore, the grounds of appeal is restored back to the file of Assessing Officer to adjudicate the issue afresh after considering the evidences of assessee, in accordance with law. Needless to direct that before adjudicating the issue afresh, the Assessing Officer shall grant fair and reasonable opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future in making proper compliance of notices issued by the Assessing Officer and not to seek any adjournment without valid reasons. With this observation, the grounds of appeal raised by the assessee are allowed for statistical purposes.