RAM KUMAR,NEHRU GARDEN COLONY vs. ITO WARD 2, KAITHAL

The Department of Income Tax basis information received from the system, noticed that the assessee had deposited cash of Rs. 23,64,000/- in his saving bank account No. 1234658895 which was maintained by the assessee with HDFC Kaithal during the F.Y. 2010-11 relevant to A.Y. 2011-12. 5. Accordingly the case was reopened by recording reasons under section 147 and notice under section 148 of the Act was issued on 23/03/2018 with prior approval of PCIT, Karnal and that the same was duly served upon the assessee.

That subsequently notices under section 142(1) was issued calling for requisite informations and that the same was duly served upon the assessee.

The assessee filed ITR on 30/11/2018 declaring income of Rs. 50,000/- plus agriculture income of Rs. 2,50,000/- in response to notice under section 148. 8. Thereafter, notices under section 143(2) was issued on 02/12/2018 for the requisite compliance on 05/12/2018. 9. That the assessee through his counsel Shri Arvind Malhotra attended the proceedings and filed the requisite reply / documents / details on 02/12/2018 and that he same was placed on file after verification.

That in reply filed on 02/11/2018 it was submitted that the cash deposit of Rs. 23,64,000/- was deposited in HDFC Bank (supra) out of limit amount of Rs. 33,80,000/- from SBI Kaithal.

That Ld. AO carried out due process during the assessment pr4oceedings both in respect of HDFC Account (supra) and SBI Account (supra) and explanation of the assessee was found to be not satisfactory and consequently assessed Rs. 20,70,000/- as unexplained investment under section 69 of the Act. The said addition of Rs. 20,70,000/- was added to returned income of Rs. 50,000/- and total income was determined at Rs. 21,20,000/- and in addition Rs. 2,50,000/- as agriculture income.

That aforesaid order of assessment of Ld. AO is dated 11/12/2018 under section 143(3) and 147 of the Act.

That the assessee being aggrieved by the assessment order dt. 11/12/2018 as aforesaid preferred first appeal under section 246A of the Act, before the Ld. CIT(A) who by the impugned order has dismissed the appeal of the assessee.

That the assessee being aggrieved by the impugned order of the Ld. CIT(A) has preferred second appeal before this Tribunal and has raised following grounds of appeal:

CIT(A) erred in law and facts by confirming the action on AO acted only on the basis of information received from DDIT(lnvestigation) and did not apply his mind while recording the reasons u/s 147 of the Act and initiation of the proceedings u/s 147/148 of the Act, which goes to the root of the case and dent the reopening itself.

CIT(A) erred in law and facts by confirming the action of AO because Approval u/s 151(1)for re-opening the case has been given by JCIT in Mechanically manner.

Notice issue u/s 148 issued on basis of non existing facts.

That on the law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO in making addition of Rs. 2070000/- without considering the written submission/paper-book uploaded on income tax portal on 30.01.2021. 7. The Appellant crave leave to amend alter or delete any of above grounds of appeal.

The hearing in the matter took place before us on 12/09/2024 when Ld. AR sought adjournment on the ground that he is busy in audit cases, the said request for adjournment was however rejected including another identical case of assessee bearing ITA No. 416/Chd/2024 too was listed for penalty under section 271(1)(c).

That the records of the case were peursed by the Tribunal. Upon careful perusal it was noticed that impugned order of Ld. CIT(A) was an illegal order and in violation of the principles of natural justice.

We now have to adjudge and adjudicate the legality, validity and proprietary of the impugned order basis reasons given in the impugned order and grounds of appeal urged before us.

We notice that one of the ground of appeal before us is that impugned order is in violation of the principles of natural justice as same was passed without considering the written submission / paper book which was available on income tax portal from 30/01/2021. It was therefore contended that impugned order is passed in Technical manner without taking into consideration written submission of the assessee.

We observe and hold that on para 5.2 of the impugned order it is recorded that assessee has not furnished a written submission despite being give ample opportunities. The case is therefore is being adjudicated as per information available on record.

In para 5.8 of the impugned order it is once again averred by the Ld. CIT(A) that the assessee has not furnished written submission.

We notice that hearing in the matter was fixed by Ld. CIT(A) on 29/01/2021 but due to “Kissan Andolan” internet was not working on 29/01/2021. The assessee in consequence thereof filed a written submission / paper book on 30/01/2021 the very next day and uploaded it on system. Another hearing was fixed by Ld. CIT(A) to which assessee replied that “Paper book already uploaded on 30/01/2021 please consider the same and allow the appeal”. Copy of written submission / paper book uploaded on 30/01/2021 placed before us.

In view of the foregoing we hold that Ld. CIT(A) before passing the impugned order ought to h ave perused the written submission / paper book of assessee uploaded on 30/01/2021 and ought not to have held that assessee has not furnished written submission on para 5.2 & 5.8 of the impugned order. We therefore hold that impugned order is illegal, bad in law and not proper and further the same is in violation of the principles of natural justice. We therefore set side the same and remand the case back to the file of CIT(A) for fresh determination after giving full and complete opportunity to the assessee. All to cooperate in earely disposal of first appeal.

The impugned order of Ld. CIT(A) is set aside and matter is remanded to CIT(A) on denovo basis.

Appeal of the assessee is allowed for statistical purposes.

Now we shall deal with appeal of the Assessee in ITA No. 416/Chd/2024. 26. The facts are common and only difference is that it deals with penalty under section 271(1)(c) of the Act.

By an order dt. 26/06/2019 the Ld. AO imposed penalty of 100% on the assessee under section 271(1)(c) of the Act. The core reason was unexplained investment made by the Assessee of cash deposit of Rs. 20,70,000/- which was confirmed by the assessment order dt. 11/12/2018 passed under section 143(3) r.w.s 147 of the Act. The penalty was imposed for concealment of material particulars of income of Rs. 20,70,000/-. Notices

The assessee being aggrieved by the aforesaid order of Ld. AO dt. 26/06/2019 exercised his right of first appeal and preferred first appeal before Ld. CIT(A) who by an order No. ITBA/NFAC/S/250/2023-24/1061111793(1) dt. 19/02/2024 passed in terms of section 250 of the Act has sustained the aforesaid order imposing penalty which is dt. 26/06/2019. 29. The assessee being aggrieved by the aforesaid order dt. 19/02/2024 of Ld. CIT(A) prefers second appeal u/s 253 before us and has raised the contention that the imposition of penalty is bad in law, illegal and not proper.

On careful perusal of the order of Ld. CIT(A) we notice that number of opportunities were afforded to the assessee by way of issuance of notice(s) on 12/07/2021, 28/07/2021, 05/01/2022, 19/10/2023 and 09/02/2023 to furnish submissions respectively on or before 27/07/2021, 12/08/2021, 20/01/2022, 26/10/2023 and 16/02/2024 on ITBA portal. But assessee did not avail a single opportunity out of many afforded. Under these circumstances, the Ld. CIT(A) had no other option but to sustain the order dt. 19/02/2024. 30.1 In view of above we hold that it would be just, fair and convenient and in order to achieve ends of justice one more opportunity as and by way of final opportunity be afforded to the assessee to explain whether income is concealed or not. We accordingly set aside the order of Ld. CIT(A) dt. 19/02/2024 and remit the matter back to the file of CIT(A) on denovo basis who shall pass appropriate order on first appeal by giving just one more opportunity to the assessee.

In premises order of Ld. CIT(A) dt. 19/02/2024 is set aside as and by way of remand on denovo basis.

Appeal of the assessee is allowed for statistical purposes.

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File