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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SMT.ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER These appeals have been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-5, Ahmedabad of even dated i.e. 26.12.2018 passed under section 250 of the Income Tax Act, 1961 ("the Act" for short) pertaining to Assessment Years 2012-13 and 2013-14.
2. In both the appeals, the assessee has come up before us aggrieved by ex parte orders passed by the ld.CIT(A). The assessee failed to appear before the ld.CIT(A) despite several notices given, and accordingly, the ld.CIT(A) confirmed the addition made by the AO in both the years.
Solitary request of the ld.counsel for the assessee before us was that the appeals be restored back to the ld.CIT(A) for reconsideration and he has filed in writing before us the reasons for not appearing before the ld.CIT(A) in both the years. The same has been filed by way of an affidavit of the assessee, and briefly stated the reasons were attributed to the fact that there was a family dispute going on between the assessee and his brother, and since both of them were having a common accountant his brother had directed the employee to leave the job and not respond to the assessee; that the assessee was having no details/data or documents to submit to the Revenue authorities; that during this period, his father had taken ill; that when he was on his death-bed, he requested both brothers to reconcile their disputes, to which they agreed and it was only thereafter that his brother directed the accountant to cooperate with the assessee, and the assessee, therefore, was now in a position to furnish all information relating to the assessment of his income. Contents of the affidavit are reproduced hereunder:
“01. At the time of assessment proceedings, I had dispute with my brother Mukesh Gopaldas Bhojwani on various issues including the property. Moreover, my employee handling the day to day affairs was having my documents, statistical data etc. left the job suddenly and he was also not responding to me inspite of my repeated requests. Such person was originally employed by my brother Mukesh Bhojwani and since I was having dispute with my brother, he directed the employee to leave the job and not to respond me.
Since, I was not having the details, data, documents etc. I could not submit the same to the Assessing Officer at the time of scrutiny assessment proceedings and accordingly, the Assessing Officer made the additions and disallowance resulting in the enhancement of income.
3. At the time of appellate proceedings at the level of Honourable CIT(A), Ahmedabad, that person also never responded and never gave the data, documents etc. to me due to which I could not submit the same before Honourable CIT(A) and then, my first appeal was dismissed by CIT(A).
4. Thereafter, I preferred an appeal before ITAT, Ahmedabad in which honourable Bench set aside the appeal to CIT(A). But even at that level, employee never responded to me inspite of my repeated requests and up. He also stopped picking up my phone calls. So the appeal was dismissed at CIT(A) level after set aside.
I was constantly trying to make the compromise with my brother Mukesh Bhojwani because he was the only source with me to make the compromise between me and my employee but the compromise was successfully being completed.
Meanwhile my father Mr. Gopaldas Punumal Bhojwani, very old aged person, was suffering from multiple diseases like heart problems, eye problems, high diabetes, weakness etc. due to which I was occupied in his treatment. Since I was engaged in his treatment, I could not even much concentrate on my day to day affairs etc. Later on he was hospitalized due to Heart Attack, High Diabetes and then died. So that at the time of assessment proceedings as well as first appellate proceedings, I was engaged in his treatement and looking after him as well as visits to various hospitals for his treatment, medicine shops, obtain various reports etc. Hence, I could not concentrate with the assessment and appellate proceedings.
7. My father when died took promise from both of us brothers to do compromise and maintain good relation. After certain span of time, I and my brother sit together in presence of our relatives and then the compromise happened between I and my brother. After compromise, my brother directed the employee to start giving the details. Thereafter, the employee started giving me the details which I am submitting by way of additional evidences before Honourable ITAT, Ahmedabad with humble request to admit the same.
8. Due to these reasons I could not submit the relevant documents at the time of assessment and appellate proceedings.
Humble Prayer
Because of the above reasons I could not submit the documents, statistical data, details etc. at the time of assessment and appellate proceedings. I humbly and most respectfully request Honourable Bench of Income Tax Appellate Tribunal to admit the additional evidences in the interest of justice. Moreover, I never any mala fide intention of any non-co-operation and in fact I have not gained anything by not submitting the details, documents, evidences etc. before assessment and appellate authorities. The above information is true to the best of my knowledge and belief.”
His contention was based on the order of the ITAT in the preceding assessment year i.e. Asst.Year 2011-12, wherein the ITAT had found the same reason given by the assessee to be genuine and restored the appeal also back to the AO for reconsideration. Copy of the order of the ITAT in dated 5.10.2021 was filed before and attention drawn to para 3 of the order as under: and 285/Ahd/2019 4 “3. It is also the case of the Revenue that in support of the claim of the appellant of having 50% of share no supporting details and/or evidences have been placed before the authorities below which have been placed before us by annexing the same in the paper book. This documents includes the payment breakup of the flat purchased, the bank statement of subsequent year which was in the position of the accountant commencing from the period 28.09.2011 to 04.07.2012 appearing at pages 147 to 157 of the paper book filed before us. The explanation rendered by the Ld. AO for not been able to submit those documents before the authorities below is this that there was some family disputes particularly between the two brothers, more so, the accountant of the assessee left the job at the asking of the assessee's brother. Whereas the documents were lying with the said accountant and thus could not be placed before the authorities below at the relevant point of time. Subsequently by the intervention of the father of the assessee the disputes were resolved and the evidences mentioned above could be obtained from the said accountant. Such plea taken by the assessee seems to be genuine and hence we admit those additional documents placed before us. However since the authorities below didn't get the chance to deal with those documents as filed before us the contentions made by the appellant in support of his claim Could not be verified. Under these facts and circumstances of the case we find it just and proper to set aside the issue to the file of the Ld. AO to reconsider the matter afresh upon giving a reasonable opportunity of being heard to the assessee and upon considering the evidences as placed before us and any other evidence which the assessee may choose to file at the time of hearing of the matter.”
To prove genuineness in his appeal for restoring the matter and the intention of the assessee to cooperate in the set aside proceedings, voluminous additional evidences were filed before us against the additions made in his case.
The ld.DR vehemently opposed the contentions of the assessee.
We have considered submissions made by the ld.counsel for the assessee before us, and had gone through the entire records before us.
5. In the assessee’s appeal in Asst.Year 2012-13 in it is the second round before us. In the first round also, the ld.CIT(A)’s order was ex parte and the ITAT had restored the matter back to the ld.CIT(A) in the interest of justice to afford an opportunity of hearing to the assessee, but as is evident from the facts and 285/Ahd/2019 5 on record before us, the assessee failed to appear before the ld.CIT(A) in the second round also. Surprisingly, the reasoning now being cited by the assessee before us, in a sworn affidavit ,of some family problems which resulted in being deprived of the services of his accountant, and therefore being disabled from participating in the proceedings before the Revenue authorities, was never on any occasion presented or pleaded to the authorities. The assessee never on any occasion brought to the notice of the various authorities the personal difficulties which prevented him for cooperating in the proceedings, though the matter travelled from the AO in the first round to the Ld.CIT(A), then to the ITAT, from where it went back again to the ld.CIT(A) in the second round, and all these happened from the year 2015 when the assessment proceedings were initiated on the assessee, right upto the end of 2018 when the ld.CIT(A) passed his ex parte order in the second round. There is no doubt that several notices were issued to the assessee in all these proceedings, but not a single occasion did the assessee represent to the lower authorities about the personal difficulties he was facing, with which he has now come up before us.
6. As for the reasons now stated before us on oath, the same is not supported with even a single piece of evidence; nor any time line of the personal difficulty outlined, as to when family disturbances started and when the compromise took place between the brothers, and for that matter, when the father of the assessee took ill and finally passed away. It is just a general statement which has been given by the assessee before us. The assessee has not even cared to file as evidence an affidavit from his brother confirming the facts or from the accountant whom he alleged to have left him, rendering him helpless in furnishing information to the authorities. The above plea applies to the appeal of the assessee for the succeeding year also i.e. Asst.Year and 285/Ahd/2019 6 2013-14 with only difference being that, in that year, the assessee has come up in appeal before us in the first round itself.
It is evident from the above that the assessee has been extremely callous and casual in the proceedings relating to the assessment of his income at every stage. The assessee seems to have no respect for law, coming up and taking up its matters as and when it suits him, not even taking care to inform the Revenue authorities, who are repeatedly giving him opportunity to make out his case, of the personal problems engaging his time and attention. The assessee is very much aware of his right of appeal in an order passed against him, since all appeals have been filed within the time limit prescribed in law, but very conveniently, he has ignored his obligation and duty to participate in proceedings before authorities and atleast inform them of the reasons for not cooperating. This has been a consistent attitude of the assessee at every stage, and even in the second round in Asst.Year 2012-13.
We have noted the fact pointed out by the Ld.Counsel for the assessee that identical reasons pointed out in the preceding year in the case of the assessee were found to be genuine by the ITAT and the appeal of the assessee restored back for reconsideration by the AO. But what is pertinent is that all the facts as noted above by us were not there before the ITAT in the said case. The ITAT believed the explanation given by the assessee on the face of it, but as the facts before us point out the assessee has been non-compliant and casual in its approach for a considerable period of time. Such assessees , in our view deserve no leniency.
However, we have noted that the assessee has made an effort this time round to collect evidences against the additions made and and 285/Ahd/2019 7 to establish his genuineness in assisting and cooperating with the Revenue authorities in assessment of his true and correct income. Additional evidences have been filed in relation to all additions made in each year and a brief note on the same also filed before us.
In A.Y 2012 -13 the additions which have been confirmed by the ld.CIT(A) are with respect to cash deposits in his bank account remained unexplained amounting to Rs.18,78,000/-; interest on borrowed capital claimed as deduction while computing the income under the head house-property remained unsubstantiated amounting to Rs.1,50,581/-, and addition on account of peak of bank credit entries amounting to Rs.35 lakhs.
9. With respect to all these contentions the brief note on additional evidences filed before us is as under:
Similarly in A.Y 13-14 the additions confirmed by the ld.CIT(A) relate to undisclosed business income, unexplained cash deposits in bank account and undisclosed income from house-property. The undisclosed business income is in relation to the business of trading in shares and commodities through NSE, BSE and MCDX and noted by the AO. As per the information available on AIR, the AO was aware of the fact that the quantum of such transaction came to Rs.791,12,56,408/- and in the absence of any books of accounts, and noting that the assessee had returned only salary income and income from house property, and no explanation was given recording these share transactions, the AO estimated the profit earned by the assessee from these transactions at 0.05% of the turnover, and made addition consequently of Rs.43,12,272/- to his income on account of business profits not disclosed. The other additions are the same as made in the preceding year, A.Y 2012-13 of unexplained cash deposits and interest paid on housing loan. Brief note of the additional evidences
On a consideration of all the facts and circumstances of the case, though, as noted above by us, the assesses callous attitude deserves no leniency at this stage, but considering the voluminous evidences filed by the assessee and noting the fact that in the preceding year identical issues have been restored back to the AO for reconsideration by the ITAT, not acceding to the request of restoration of the present appeals would result in an anomaly wherein though the assessee may be able to prove its case to the Revenue authorities and the additions be deleted in the preceding year, but in the impugned years the additions would survive only on account of the callous attitude of the assessee.
We, therefore, are of the considered view that imposing cost on the assessee as a punishment for his non-cooperative attitude would and 285/Ahd/2019 11 suffice and restoring the appeals back to the AO would serve the ends of justice. We order so with a cost of Rs.5,000/- for each appeal, to be deposited by the assessee with the Gujarat State Legal Services Authority. Subject to this payment, appeals of the assessee is allowed for statistical purpose.
In the result, both the appeals of the assessee are allowed for statistical purpose as per our above observations.
Order pronounced in the Court on 5th July, 2024 at Ahmedabad.