BHARATKUMAR BHIKHABHAI CHAVDA,HARIYALA KHEDA vs. INCOME TAX OFFICER, WARD-3, NADIAD

आदेश/ORDER This appeal filed by the assessee before the Income-Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad in ITA No. 797/Ahd/2024 for assessment year 2017-18 has arisen from the appellate order vide DIN & Order No. ITBA/NFAC/S/250/ 2023-24/1059995984(1) dated 22-01-2024 passed by learned Commissioner of Income-tax(Appeals),National Faceless Appeal Centre(NFAC), Delhi , which appeal in turn has arisen from the assessment order dated 07-11-2019 passed by the

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Assessing Officer u/s. 144 of the Act.(Order No. ITBA/AST/ S/144/2019-20/1019897882(1)) 2. The brief facts of the case are that the assessee did not file return of income. Notice u/s. 142(1),dated 12.03.2018 was issued by the Assessing Officer, calling the assessee to prepare and file true and correct return of income. The assessee , however, had failed to file return of income u/s. 139 and also failed to furnish the return of income in compliance to notice issued by AO u/s. 142(1) of the Act. The Assessing Officer observed that the assessee has deposited cash of Rs. 17,29,000/- during the financial year 2016-17 with Dena Bank (now Bank of Baroda), Kheda Branch, Ahmedabad in bank account number 82610004681. The assessee has made cash deposits of Rs. 12,50,000/- between 9th November, 2016 to 30th December, 2016 i.e. during the demonetization period. The AO issued statutory notices u/s 142(1) and SCN’s to the assessee, but the same remained un-complied with. The assessee did not comply with the notices issued by the AO. The AO issued notices u/s 133(6) to the Dena Bank and ask for the bank statement, KYC, breakup of cash deposited in old 1000 and 500 notes(SBN) as well other denomination between 09.11.2016 to 30.12.2016 along with copy of pay-in-slips. In response, the bank supplied the requisite information to the AO. The Assessing Officer invoked the provisions of section 144 of the 1961 Act, and made best judgment assessment by

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making total addition of Rs. 18,04,000/- to the income in the hands of the assessee , as the Assessing Officer observed that the assessee made cash deposit amounting to Rs. 17,29,000/- during the year under consideration, and there are other credit entries appearing in the aforesaid bank account amounting to Rs. 75,000/-, thus, totaling to Rs. 18,04,000/- appearing in Dena Bank account (now known as Bank of Baroda )Kheda Branch , during the year under consideration , by invoking provisions of Section 69A read with Section 115BBE of the 1971 Act. 3. Aggrieved, the assessee filed first appeal before the learned CIT(A). The ld. CIT(A) issued as many as four notices as are recorded in page 3 of ld. CIT(A) order , but the assessee did not responded/complied with these notices. The learned CIT(A) dismissed the appeal of the assessee by up-holding the assessment order of the Assessing Officer. It is pertinent to mention that in statement of fact and grounds of appeal filed by the assessee before ld. CIT(A) , which are itself recorded by ld. CIT(A) in para 7.5 of the ld. CIT(A) order, the assessee has stated that the cash deposited is not income of the assessee for the year and it is from own funds of the assessee. It is averred by the assessee that the assessee is a farmer and carried out agricultural activities as well giving advance to farmers on interest. The assessee has claimed that during the year , the assessee has entered into partnership firm and

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started petrol pump. The advances given to farmers have been received back and deposited in cash with the bank for establishment of petrol pump. The ld. CIT(A) rejected these contentions on the ground that no documentary evidences/details were filed by the assessee, and assessment order was upheld. 4. Aggrieved , the assessee has now filed second appeal before the Tribunal. This appeal is filed belatedly by 28 days beyond the time stipulated u/s 253(3) of the 1961 Act. The assessee has filed condonation petition stating that the accountant believed that the appeal is to be filed within 90 days as is provided under the GST laws, while it was required to be filed within 60 days as is provided u/s 253(3) and hence there was a delay of 28 days. The department has not raised any serious objection to the petition filed by the assessee for condoning the aforesaid delay. Thus, keeping in view that there is a delay of 28 days and the assessee has filed petition for condonation explaining the sufficient cause and reasons for filing this appeal belatedly with ITAT, I donot find any malafide on the part of the assessee in filing this appeal belatedly with ITAT as the assessee is not going to gain any thing by filing this appeal belatedly with ITAT by 28 days beyond the time stipulated u/s 253(3). I hold that the assessee has given sufficient and reasonable cause in filing this appeal belatedly and there is no malafide at writ large on the part of

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the assessee in filing this appeal belatedly in the instant case, I condone this delay of 28 days in filing this appeal belatedly by the assessee, and proceed to adjudicate this appeal on merit in accordance with law.Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of Collector of Land Acquisition, Anantnag v. Mst. Katiji (1987 AIR 1353(SC)) 5. None appeared on behalf of the assessee when this appeal was called for hearing before the Tribunal, “SMC” Bench. No Adjournment application is filed by the assessee. The ld. Departmental Representative submitted that the assessee has not complied before the authorities below and has not filed details/documents called for by the Assessing Officer and ld. CIT(A) , and hence prayers were made to dismiss the appeal filed by the assessee. However, ld. Departmental Representative submitted that matter can go back to the file of ld. CIT(A) for fresh adjudication as appeal is dismissed by ld. CIT(A) by simply upholding the assessment order of the Assessing Officer. 6. I have heard ld. Departmental Representative and perused orders of the authorities below and other material on record. I observed that ld. CIT(A) has dismissed the appeal of the assessee by upholding the assessment order passed by the AO, as assessee did not comply with the notices issued by ld. CIT(A). The proceedings were conducted by ld. CIT(A) under

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faceless scheme of adjudication of appeal. The ld. CIT(A) has simply confirmed the order of the Assessing Officer, and dismissed the appeal of the assessee on the grounds that no documents/details were filed by the assessee. However, ld. CIT(A) has not given his independent reasoning while dismissing the appeal of the assessee. I have observed that the ld. CIT(A) has passed appellate order without deciding the issues on merit. The power of ld. CIT(A) are co-terminus with the power of Assessing Officer which even includes power of enhancement(Section 251(1)(a)). The ld. CIT(A) is required to adjudicate the issues on merit in accordance with law , as is provided u/s. 250(6). The ld. CIT(A) has to state point for determination, his reasons for decision and the decision thereof as provided u/s 250(6). The assessee has claimed that he is farmer and he does not have income chargeable to tax.It is claimed by the assessee that he has advanced money out of agricultural income which was returned during the year. The CIT(A) has power to make such inquiries as he thinks fit and may also direct AO to make such enquiries and report to ld CIT(A), as is provided u/s 250(4). The CIT(A) could have issued summons u/s. 131 to the assessee or could have called for information from third parties u/s. 133(6) , in case there is non-compliance on the part of the assessee There are other powers vested with ld. CIT(A) as is provided under the 1961 Act. The ld. CIT(A) has not rebutted the claim of the assessee,

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but dismissed the appeal of the assessee on ground of non filing of documents/details by the assessee. The ld. CIT(A) is required and obligated to pass order in compliance with the provisions of section 250(6), as ld CIT(A) is required to pass reasoned order on merits in accordance with law. The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issue are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not appear before ld. CIT(A) or did not comply with the notices in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order

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passed without reasoning on the issues on merits . In the present case, it is observed that ld. CIT(A) has dismissed the appeal of the assessee ex-parte without deciding the issues arising in the appeal before him on merits, and hence the appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld , and that the assessee has not submitted details/documents is not sufficient . The ld. CIT(A) is not toothless as his powers are co- terminus with the powers of the AO. He could have made enquiries himself or have caused enquiries to be made by the AO and submit remand report to him to enable ld. CIT(A) to adjudicate the appeal(Section 250(4). There are other vast powers vested under the 1961 Act with ld. CIT(A). It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Under these circumstances and fairness of both the parties, in the interest of justice, the appellate order of CIT(A) is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. The ld. CIT(A) shall pass the order in compliance with the provision of section 250(6) of the Act on merit in accordance with law, in set aside proceedings ,after giving

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opportunity to both the parties in compliance with principles of natural justice. The assessee on his part is also directed to comply with the direction/notices of CIT(A) , and in case of failure of the assessee, the ld. CIT(A) shall be free to pass such order as deemed fit ex-parte in accordance with law on merits and after complying with the provisions of section 250(6) of the Act. Thus, the appeal of the assessee is allowed for statistical purposes and the matter is restored back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law. I clarify that I have not commented on the merits of the issues in the appeal. Thus, the appeal of the assessee is allowed for statistical purposes. I order accordingly. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19-06-2024 at the Conclusion of the hearing and reduced to writing and signed on 20th June, 2024

Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER

Ahmedabad : Dated 20/06/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 9

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उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद