INCOME TAX OFFICER, WARD-3(1)(4), VADODARA, RACE COURSE VADODARA vs. ANILBHAI CHAMPAKLAL SHAH, HARNI ROAD

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ITA 1363/AHD/2024Status: DisposedITAT Ahmedabad06 November 2024AY 2017-18Bench: SHRI T.R. SENTHIL KUMAR (Judicial Member), SHRI NARENDRA PRASAD SINHA (Accountant Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) contravened Rule 46A(3) of the IT Rules by admitting additional evidence without giving the AO an opportunity to examine it. Therefore, the matter was set aside to the AO for fresh examination, with directions for proper opportunity to the assessee and compliance by the assessee.

What were the facts?

The Assessing Officer (AO) reopened the assessment of the assessee based on information of a large cash deposit in the assessee's proprietary concern. The assessee made no compliance during the assessment proceedings, leading to an ex-parte assessment with an addition for unexplained cash deposits. The CIT(A) allowed the assessee's appeal by admitting additional evidence without providing the AO an opportunity to examine it.

What were the issues?

Whether the CIT(A) was justified in admitting additional evidence without allowing the AO an opportunity to examine it as per Rule 46A(3) of the Income Tax Rules.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI T.R. SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Mehul K. Patel, A.R
Hearing: 15/10/2024Pronounced: 06/11/2024

PER SHRI NARENDRA PRASAD SINHA, AM: Thisappeal is filed by the Revenue against the order of the National Faceless Appeal Centre (NFAC), Delhi, (in short ‘the CIT(A)’),dated 24.05.2024 for the Assessment Year 2017-18.

2.

The brief facts of the case are that return of income for A.Y. 2017-18 was filed by the assessee on 27.10.2017 declaring total income of Rs.4,19,590/-. Thereafter, the assessee had filed revised return on 07.11.2017 declaring income of Rs.4,32,370/-. The AO had received an information that the assessee had (ITO vs. Anilbhai ChampaklalShah)A.Y.– 2017-18- 2 – deposited cash of Rs.1,74,62,000/- in the bank account maintained with the Kotak Mahindra Bank in the name of M/s. Shreenathji Agency, the proprietary concern of the assessee. The case was, therefore, reopened u/s.147 of the Income Tax Act, 1961 (in short ‘the Act’) to examine the source of this cash deposit. In the course of re-opened proceeding, no compliance was made by the assessee. The AO had, therefore, completed the assessment ex-parte under Section 147 r.w.s. 144 of the Act on 23.03.2022 at total income of Rs.1,78,94,370/-, wherein addition of Rs.1,74,62,000/- was made u/s.69 of the Act in respect of unexplained money being cash deposited in the bank account.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided vide the impugned order and the appeal of the assessee was allowed.

4.

Now, the Revenue is in appeal before us.The Revenue has taken the following grounds in this appeal:

1.

“i) Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the addition of cash deposits of Rs. 1,74,62,000/- made u/s 69A rws 115BBE of the I.T.Act, 1961 on the basis of the details/documents submitted by the assessee during the course of appellate proceedings, without affording an opportunity to the Assessing Officer as per the provisions of Rule 46A(3) of the Income Tax Rules, 1962 to examine these details/documents and furnish a report on the same as these details/documents were never produced by the assessee before the Assessing Officer during the course of assessment proceedings?

1.

(ITO vs. Anilbhai ChampaklalShah)A.Y.– 2017-18- 3 – (ii) The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal.”

5. Shri Rignesh Das, Ld. Sr. DR for the Revenue submitted that the Ld. CIT(A) had allowed relief to the assessee by admitting additional evidences in contravention to provision of Rule 46A(3) of the Income Tax Rules. He explained that no compliance was made by the assessee in the course of assessment proceedings and the AO had passed the order ex- parte. On the other hand, the assessee had made submission before the Ld. CIT(A), which was admitted without allowing any opportunity to the AO. He, therefore, requested that the matter may be set aside with a direction to call for a remand report from the AO in respect of the additional evidences admitted by the Ld. CIT(A).

6. Per contra, Shri Mehul K. Patel, Ld. AR for the assessee fairly admitted that certain fresh evidences/explanations were filed before the Ld. CIT(A) and that the Ld. CIT(A) had not called for any remand report from the AO. He, therefore, requested that the matter may be set aside to the file of the Ld. AO to examine the evidences as brought on record in the course of appellate proceeding.

7. We have carefully considered the rival submissions. It is found that no compliance was made by the assessee before the AO who had passed the assessment order ex-parte. On the other hand, certain submissions / evidences were filed before the Ld. CIT(A), based on which he had allowed relief to the assessee.

(ITO vs. Anilbhai ChampaklalShah)A.Y.– 2017-18- 4 – The provision of Rule 46A(3) clearly stipulates that the CIT(A) shall not take into account any evidence without allowing an opportunity to the AO to examine the evidences/documents as brought on record in the course appellate proceedings. Since, the Ld. CIT(A) has controverted the provision of Rule 46A(3) of the IT Rules, we deem it proper to set aside the matter to the file of the Jurisdictional AO to examine the matter afresh. The AO is directed to allow a proper opportunity of being heard to the assessee. At the same time, the assessee is also directed to make compliance before the AO and file the necessary evidences as brought on record before the Ld. CIT(A) and also other evidences as available in support of the cash deposits. In case of non-compliance on the part of the assessee, the AO is free to decide the matter as deemed proper.

8.

In the result, the appeal of the Revenue is allowed.

This Order pronounced on 06/11/2024

Sd/- Sd/- (T.R. SENTHIL KUMAR) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 06/11/2024 आदेशक���त�ल�पअ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent. 3. संबं�धतआयकरआयु�त/ Concerned CIT 4. आयकरआयु�त(अपील) / The CIT(A)- 5. �वभागीय�!त!न�ध, आयकरअपील#यअ�धकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड)फाईल / Guard file. आदेशानुसार/ BY ORDER,

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