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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘A’, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
(A) Appeal vide 2016-17 against impugned appellate order dated 07/03/2024 (DIN & Order No.ITBA/NFAC/S/250/2023-24/1062202843(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. The grounds of appeal are as under:
2 S.A. No.10/Lkw/2024 Assessment year:2016-17 “1.1 BECAUSE reason to believe recorded by the Assessing Officer for initiating assessment proceedings u/s 147 of the Act are wholly deficient in meeting the requirement of law and consequently the ld. "CIT(A)"should have quashed the assessment order holding the assessment proceedings as void-ab-initio and the assessment order as illegal, bad in law and null and void.
1.2 BECAUSE reason to believe in pursuance of which the assessment was reopened is based on borrowed satisfaction without independent application of mind by the Assessing Officer to the information received from the Investigation Wing, consequently the ld. "CIT(A)" should have held the re-opening of assessment as bad in law.
1.3 BECAUSE belief of escapement of income is based merely on suspicion, without requisite satisfaction as per mandate of section 147 of the Act, the ld. "CIT(A)" should have held the re-assessment proceedings as void ab-initio and consequently the reassessment order impugned in this appeal was liable to be quashed.
1.4 BECAUSE the re-assessment proceedings were initiated only with a view to verify the nature of receipt of Rs.1,25,00,000/- in the bank account of the assessee by way of transfer from the bank account of Shri Zafar Hasan Kazmi which narration does not constitute valid reason to believe in the eyes of law and consequently ld. "CIT(A)" should have held the re-assessment proceedings as void-ab- initio rendering the assessment order as bad in law and wholly without jurisdiction.
BECAUSE reason to believe were not supplied and objection to the same was not disposed off as per decision of Apex Court in the case of G.K.N. Driveshafts (India) Ltd. V. ITO (2003) 259 ITR 19(SC) the re-assessment proceedings got vitiated, rendering the assessment order as wholly without jurisdiction and consequently the ld. "CIT(A)" should have quashed the assessment order.
BECAUSE the approval u/s 151 of the Act was accorded by the competent authority in a casual manner without due application of mind and consequently the ld. "CIT(A)"should have quashed the 3 S.A. No.10/Lkw/2024 Assessment year:2016-17 assessment order holding the assessment proceedings as void-ab- initio and the assessment order as illegal, bad in law and null and void.
BECAUSE the ld. "CIT(A)", while passing the impugned order, failed to appreciate that the appellant was not confronted with the statement on oath of Shri Zafar Hasan Kazmi, stated to have been recorded u/s 131(1A) of the Act, as per mandate of sub-section (3) of section 142 of the Act.
WITHOUT PREJUDICE TO THE AFORESAID
BECAUSE the ld."CIT(A)" has erred in law and on facts in confirming the addition of Rs.1,25,00,000/- made by Assessing Officer by erroneously treating the loan received by the appellant from the lender Shri Zafar Hasan Kazmiasthe unexplained money u/s 69A of the Act.
BECAUSE the ld. "CIT(A)"while confirming the addition of Rs.1,25,00,000/- failed to appreciate that the notice for recovery of the said amountsent by Shri Zafar Hasan Kazmi to the appellant and filing of recovery suit by the said lender against the appellant before the Court of Judicial Magistrate regarding recovery of the amount, proved beyond all reasonable doubts that the amount of Rs.1,25,00,000/ - received by the appellant from Shri Zafar Hasan Kazmi was in the nature of 'Loan' and hence, the said amount could not have been treated as income of the appellant so as to make the addition u/s 69A of the Act.
BECAUSE the ld. "CIT(A)"while upholding the addition made u/s 69A of the Act, failed to appreciate that finding of the Assessing Officer in para 6 of the assessment order that "The assessee has received the amount of Rs.1,25,00,000/- through bank channel but alleged returning the same in cash is not at all supported by any material and evidence brought on record and is purely based on presumption, surmises and conjectures.
BECAUSE the assessee was not found to be the owner of money, bullion etc. therefore, the provisions of section 69A of the Act
4 S.A. No.10/Lkw/2024 Assessment year:2016-17 were not attracted and consequently, ld. "CIT(A)" should have deleted the addition of Rs.1,25,00,000/- made by the Assessing Officer under the said section.
BECAUSE the ld. "CIT(A)", while upholding the assessment order passed u/s 147 of the Act, failed to appreciate that the addition made by the Assessing Officer was based on presumption of bad faith and surmises without properly appreciating the facts of the case and the material and information available on record.
BECAUSE without prejudice to the grounds hereinfore, the ld." CIT(A)" was not justified in dismissing the appeal of the assessee (against the assessment order passed u/s 147 of the Income-tax Act, 1961) by passing the order dated 07.03.2024 ex-parte without affording due and effective opportunity of being heard to the assessee and consequently the impugned order deserves to be set-aside and the matter restored to the "CIT(A)" for passing the order afresh after providing reasonable opportunity of being heard to the assessee.
BECAUSE on a due consideration of the facts and circumstances of the case, the learned "CIT(A)" ought to have appreciated that it is not the case of concealment of particulars of income and accordingly he should have directed the Assessing Officer to drop the penalty proceedings illegally and unjustifiably initiated u/s 271(1)(c) of the Act.
BECAUSE on the facts and circumstances the assessee is not liable for interest u/s 234B of the Act and consequently the ld. "CIT(A)" ought to have directed the ld. AO to delete the interest charged under this section.
BECAUSE the order appealed against is contrary to facts, law and principles of natural justice.
BECAUSE each ground taken in appeal is mutually exclusive and without prejudice to each other.”
(B) The assessee filed original return of income on 23/11/2016 declaring total income of Rs.12,11,000/-. Subsequently the case was reopened by 5 S.A. No.10/Lkw/2024 Assessment year:2016-17 issue of notice dated 30/03/2021 issued u/s 148 of the Income Tax Act, 1961 (“IT Act” for short). In response, the assessee filed return on 29/04/2021, again declaring total income of the aforesaid amount of Rs.12,11,000/-. The Assessing Officer passed assessment order dated 26/03/2022 u/s 147 read with section 144B of the IT Act vide DIN ITBA/AST/S/147/2021-22/1041658240(1) whereby the assessee’s total income was assessed at Rs.1,37,11,000/-. In the aforesaid assessment order, an addition of Rs.1,25,00,000/- was made. The assessee had claimed to have received this amount as loan. The assessee filed appeal in the office of CIT(A). Through impugned order dated 07/03/2024 vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1062202843(1), the assessee’s appeal was dismissed and the aforesaid addition of Rs.1,25,00,000/- was confirmed. The present appeal before us vide has been filed by the assessee against the aforesaid impugned appellate order dated 07/03/2024. The assessee also filed Stay Application No.10/Lkw/2024 before the Tribunal in connection with the aforesaid appeal; requesting the stay of disputed demand. For the sake convenience the aforesaid appeal and the aforesaid Stay Application are being disposed of through this consolidated order. On perusal of records, it is seen that before deciding assessee’s appeal through the aforesaid impugned appellate order dated 07/03/2024, the learned CIT(A) fixed hearing on 26/02/2024 vide notice dated 20/02/2024. Thus, the assessee was allowed only four days (intervening period between 20/02/2024 and 26/02/2024) for making submissions. The assessee sought adjournment of the hearing, requesting time for a fortnight. However, ignoring this request of time for a fortnight from the assessee’s side, another notice dated 28/02/2024 was issued by 6 S.A. No.10/Lkw/2024 Assessment year:2016-17 the learned CIT(A) fixing the date of compliance on or before 04/03/2024. Thus, assessee was allowed only three days for filing the written submissions (intervening period between 28/02/2024 and 04/03/2024). The learned CIT(A) dismissed the appeal ex-parte qua the appellant assessee when the assessee could not make compliance within such a short time.
(C) At the time of hearing before us, the learned Authorised Representative of the assessee submitted, by drawing attention to ground No. 10 of the appeal, that the learned CIT(A) passed ex-parte order without affording due and effective opportunity of being heard to the assessee; and accordingly the impugned order deserved to be set aside and that the matter should be restored to the file of learned CIT(A) for passing the order afresh after providing reasonable opportunity of being heard to the assessee. The learned Sr. Departmental Representative was in agreement with this and expressed no objection.
(D) In view of the foregoing, we set aside the impugned appellate order dated 07/03/2024 of learned CIT(A); and we restore all the issues in dispute in the present appeal before us to the file of learned CIT(A) with the direction to pass de novo order in accordance with law after providing reasonable opportunity to the assessee. All the grounds of appeal are treated as disposed of in accordance with the aforesaid direction.
(E) The aforesaid Stay Application No.10/Lkw/2024 connected with appeal vide of the assessee becomes infructuous because the assessee’s appeal has been decided for which attention is 7 S.A. No.10/Lkw/2024 Assessment year:2016-17 drawn to foregoing paragraph (D) of this order. Therefore, the said Stay Application filed by the assessee is dismissed being infructuous.
(F) In the result, the appeal is partly allowed for statistical purposes and the Stay Application is dismissed as infructuous.
(Order pronounced in the open court on 11/06/2024)