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IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No.227/Srt/2021 [order under section 144/ 147] ITA No.228/Srt/2021 [order under section 271(1)(b)] ITA No.229/Srt/2021 [order under section 271(1)(c)] ITA No.230/Srt/2021 [order under section 271-B] ITANo.231/Srt/2021 [order under section 271-F] (All appeals in Assessment Year: 2011-12) (Hearing in Physical Court) Shri Kamlesh Singh I.T.O. Plot No.46, Khodiyar Nagar-1, Ward-2(2)(2), Vs. Aas Pass Mandir Road, Aaykar Bhavan, Godadra, Majura Gate, Surat-395003 Surat-395001 PAN No. ASQPS 3228 L Appellant/ assessee Respondent/ revenue
Appellant represented by Shri Bharat Javeri, Advocate Respondent represented by Shri Vinod Kumar Sr. DR Shri Shaurya Shashwat Shukla, Sr. DR Date of hearing 04 & 29/07/2022 Date of pronouncement 29/07/2022 Order under section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These five appeals by the single assessee are directed against the separate orders of the National Faceless Appeal Centre, Delhi (NFAC) all dated 23/09/2021 for the Assessment year (AY) 2011-12.
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT 2. In all these appeals, facts are common as all the appeals relate to A.Y. 2010-11, thus, all the appeals were clubbed, heard together and are decided by this consolidate order to avoid the conflicting decision. For appreciation of fact, the appeal in ITA No. 227/Srt/2021 in quantum assessment is treated as ‘lead’ case, as all the orders are arising/ initiated from the assessment order framed by assessing officer under section 144 read with section 147 dated 15.12.2018. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case as well as law on subject, the learned National Faceless Appeal Centre (NFAC) Delhi erred in dismissed the appeal without considering the facts of the case and without giving further opportunity to the appellant.” 3. Brief facts of the case are that the assessee is an individual. The assessing officer reopened the case of assessee by taking view that that as per information available on e-filing ITD system the assessee has not filed his return of income for the Assessment Year (AY) 2011-12. And on verification of ITS data the assessee has made total cash deposit of Rs. 89,66,400/- in his bank account, out of which Rs. 71,87,5000/- in ICICI bank and Rs. 17,78,900/- in State bank of India. On the basis of such information notice under section 133(6) was issued to the assessee, asking the assessee to furnish the details of return of Income of AY 2011-12 and
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT to explain source of cash deposit. No response was made by assessee nor was any information furnished. Thus, the assessing officer took his view that it is not possible to verify the cash deposit, which remained unexplained. The assessing officer took his view that he has a reason to believe that income of assessee to the extent of Rs. 89, 66, 400/- has escaped assessment. Notice under Section 148 dated 30/03/2018 was served upon the assessee. The Assessing Officer in para -2 of his order noted that despite service of notice various notices, no compliance was made. The assessment order, issued final show cause notice dated 27/09/2018 but no compliance was made. The Assessing Officer decided to complete the assessment under Section 144 of the Act.
In para-3 of assessment order, the assessing officer recorded that on verification of ITD system, he noted that the assessee filed original return of income on 08.02.2012, declaring income of Rs. 2,09,550/-. Further in response of notice under section 148, the assessee filed return of income for AY 2010-11 on 11.12.2018 decaling nil income. The assessing officer further noted that no submissions was filed either manually or electronically till passing the assessment order. The assessee has made cash deposit of Rs. 71,87,500 in ICICI bank and Rs. 17,78,900 in State Bank of India. The assessee failed to substantiate the source of cash
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT deposit despite service of various show cause notices. Hence, the credit in the bank account of assessee was treated as unexplained cash credit/money under Section 69A of the Act.
The Assessing Officer initiated penalty under Section 271(1)(c) of the Act. Since, no compliance was made of various notices under Section 142(1), the Assessing Officer initiated penalty under Section 271(1)(c) of the Act for concealment of income. The Assessing Officer further noted that gross receipt of assessee were exceeding Rs. 60.00 lacs for the year under consideration, the assessee ought to have audited his books of account as per the provisions of Section 44AB of the Act. As there is failure on the part of assessee to audit his books of account, the assessing officer- initiated penalty under Section 271B of the Act. The assessee failed to furnish return of income for A.Y. 2011-12, the penalty under Section 271F of the Act was also initiated separately. The assessee has not made compliance of various notices, thus, the assessing officer also initiated penalty under section 271(1)(b) of the Act. The Assessing Officer consequently after issuing separate notices in all the penalty matters, levied penalty four penalties under different Sections as recorded above of different amounts.
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT 6. Aggrieved, by the order in quantum assessment and in various penalty matters, the assesse filed appeal before the ld. CIT(A). The assessee filed appeal electronically on 05.03.2020. In the statement of fact attached with Form-35 (appeal form) the assessee contended that the assessee filed return of income on 11.12.2018. Prior to that no notice was received by him. In column No. 2(c) the mentioned that order appealed was received on 17.02.2020. All the appeals of assessee were dismissed vide separate order all dated 23/09/2021 in ex parte proceedings by holding that sufficient opportunities were given to the assessee but, there is no positive response. The ld. CIT(A) also dismissed all the appeals by taking a view that the appeals were filed beyond period of limitation. The ld. CIT(A) in appeal for quantum assessment, recorded that the assessment order was passed on 15/12/2018 and that appeal was filed on 05/3/2020 thus, there was delay in filing appeal and that the assessee failed to submit fresh cause for filing late appeal. Accordingly, the appeal of assessee was also dismissed being not maintainable for want of delay. Similarly, the other appeals were also dismissed for want of sufficient cause in filing the appeal before the appellate authority. Further aggrieved, the assessee has filed the present appeals before the Tribunal.
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT 7. We have heard the submissions of the learned authorised representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) of the Revenue and have also perused the orders of the lower authorities carefully. The ld. AR of the assessee submits that the assessee was doing the business of purchase and sale of cloth on small scale. The assessee was aware about opening of current account for business and thus all the amount received in business was deposited in the saving bank account. The assessee suffered losses in such business, so he stopped his business and shifted to his native place in Uttar Pradesh. The assessee visited Surat in 2018 and received a notice from assessing officer, which was handed over by his neighbour. The assessee tried to contact his Chartered Accountant, who has filed return of income in 2102 and immediately filed return in response to notice under section 148 on 11.12.2018. After filing return of income in response to notice under section 148, no further notice was received to the assessee. The assessee came to know about the demand in December 2019, the demand letter was also received by his neighbour. The assessee immediately contacted the assessing officer. The assessing officer asked the assessee to submit application in writing for supply of copies of various orders passed by him. The assessee vide his application dated 17.12.2019 demanded copies of the various order, including assessment order. The 6
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT assessing officer supplied copy of assessment order and other order of penalty only on 17.02.2020. The assessing officer passed the assessment order within four days on 15.12.2018.
The ld AR for the assessee submits that no notice either of assessment proceeding, or or in various penalties were received by the assessee. After receipt of assessment order, the assessee immediately filed appeal before the ld. CIT(A) on 05.03.2020, well within time from the date of receipt of the various penalty orders including assessment order. In Form 35, the assessee specifically mentioned about the date of service of notice as on 17/02/2020. The ld. CIT(A) has not considered such fact while adjudicating the appeal of assessee. Before the ld. CIT(A), the assessee made a request for adjournment vide application dated 16.09.2021 which was uploaded on ITBA portal. Thereafter the assessee has not received any communication nor was any notice of hearing received. The ld. CIT(A) dismissed the appeal of assessee without considering the facts of the case and merit of addition. The ld. CIT(A) has not adjudicated the appeal as per mandate of Section 250(6) of the Act and dismissed the appeal in a non- speaking order. No reasonable and fair opportunity of hearing was given to the assessee. The ld. AR further submits that neither the Assessing Officer has given fair and reasonable opportunity nor the ld. CIT(A) has
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT considered the case of merit by giving sufficient opportunity. The assessee has good case on merit and will succeed, if the case of assessee is heard and decided on merit as the cash credit in the bank relates to business of the assessee. The ld AR for the assessee prayed that all the appeals, may be restored to the file of Assessing officer to adjudicate the matter afresh. The ld. AR submits that all the penalties arising out of assessment order dated 15/12/2018 are also to be restored back, therefore, all the appeal may be restored back to the file of Assessing officer. The ld AR for the assessee submits that the assessee has filed his affidavit before Tribunal that no notice of assessing officer was received by him personally as he was out of station, the assessee filed original return of income as well as return in response to notice under section 148.
On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR submits that the Assessing Officer as well as the ld. CIT(A) have given sufficient and ample opportunity to the assessee. The assessee failed to appear and respond to the notices and to file proper reply to substantiate his claim. Therefore, the lower authorities have no option except to decide the matter on the basis of material available on record. The ld. Sr. DR submits that so far as the delay in filing of appeal before the ld. CIT(A) is concerned, the assessee has not
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT furnished any document along with the appeal nor furnished any evidence in support thereof that the assessment order or other order was received by the assesse on 17/02/2018.
We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that the Assessing officer made the reopening on the basis of information in ITD system data available with him that the assessee has not filed return of income for AY 2011-12. As per the information in ITS data, the assesse made cash deposit of Rs. 71,87,500/- in ICICI bank and Rs. 17,78,900 in State Bank of India. The Assessing Officer made addition of entire aggregate amount by taking a view that despite serving several show cause notices, the assessee failed to give any reply. The assessing officer in para-3 of his order recorded that the assessee filed original return of income on 08.02.2012, which is contrary to the fact recorded in para -1. The assessing officer in para-2 recorded that no return in response to notice under section 148 was filed, however in para-3 recorded that return in response to notice under section 148 as filed on 11.12.2018. Thus, the facts recorded by the assessing officer are contradictory, still the assessing officer made the addition of entire credit in the banks account of the assessee.
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT 11. The Assessing Officer also initiated various penalty proceedings as recorded supra. We find that the assessee filed appeal before the ld. CIT(A). In Form-35, (appeal form) the assessee specifically pleaded that the impugned assessment order dated 18/12/2018 was served only on 17/02/2020. Before us, the ld. AR of the assessee filed copy of application filed before the Assessing officer for seeking copy of assessment order. The said application was filed before the Assessing Officer on 11/12/2019 which is duly acknowledged by the Assessing Officer Ward 2(2)(2), Surat. Further, we find that the copy of letter of Assessing Officer dated 17/12/2019, through which the copy of assessment order under Section 144 along with various notices of penalties, demand notice and penalty order under Section 271B, 271(1)(c), 271F and 271(1)(b) of the Act, were supplied. As per this letter, all these orders were received by assessee on 17/2/2020 as per their acknowledgement on the said letter. Further we find that the assessee filed appeal before the ld. CIT(A) on 05/3/2020.
The ld. AR of the assessee before us vehemently submitted that the assessee has not received assessment order or order of penalty and that all orders were received only on 17/02/2020 and the appeal was filed immediately on 05.03.2020, within time. Considering the various correspondences with the Assessing Officer and letter of Assessing officer
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT dated 17/12/2019 which bears the date of receipt of all the orders only on 17/02/2020, hence, we find that the contention of ld. AR of assessee of appeal before first appellate authority was filed within stipulated period from receipt of order of Assessing Officer. In our view, the contention of assessee appears to be correct that all the appeals before ld CIT(A) were filed in time from the date of receipt of the various orders. Therefore, there was no delay in filing appeals.
We further find that the ld. CIT(A) dismissed the appeal of assessee by taking view that the assessee was given sufficient opportunity of being heard but there is no positive response from assessee. We find that the ld CIT(A) has vaguely recorded that sufficient opportunity was given to the assessee. We find that the ld CIT(A) has not specified in his order as to when the dates for making compliances were fixed and the notices were communicated to the assessee. We find that the assessee uploaded an application for adjournment on the ITBA portal of the ld CIT(A), which is neither considered nor referred in his order nor further satisfaction is recorded that non-compliance would lead to passing the ex-party order.
We, further find that order of ld CIT(A) is not in accordance with mandate of Section 250(6) of the Act. Therefore, in our view, the order is no in consonance with the mandate of Section 250(6) of the Act. Considering
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT the totality of facts and circumstances of the case, we are of the view that the ld. CIT(A) was not justified in dismissing all the appeal without giving fair and reasonable opportunity and without hearing the submission on the objection of filing of appeals beyond limitation.
We find that the assessment order was also passed under Section 144 r.w.s. 147, therefore, keeping in view the principles of natural justice, we instead of restoring the matter back to the file of ld. CIT(A), restore the back all the appeal to the file of Assessing officer to decide/adjudicate all the appeals afresh, except the appeal under section 271F. Needless to direct before passing the order afresh, the Assessing Officer shall grant fair and reasonable opportunity of hearing to the assessee. The assessee is given liberty to file documents/evidence in his power and possession before the Assessing Officer. The assessee is further directed to provide all information to the Assessing officer and not to cause any further delay without any reasonable cause.
In the result, all the four appeals of the assessee are allowed for statistical purposes only, except the appeal against the order under section 271F.
ITA No. 231/Srt/2021 (against order under section 271-F)
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT 17. We noted that the assessing officer levied penalty under section 271-F by taking view that the assessee has not filed return of income under section 139(1) and as such notice under section 148 dated 30.03.2018 was issued to the assessee and no return of income in response to notice under section 148 is filed. We find that the finding of the assessing officer is contrary to his observation in para-3 of reassessment order dated 15.12.2018, wherein the assessing officer himself recorded that original return of income was filed by assessee on 08.02.2012 declaring income of Rs. 2,09,550/- and return in response to notice under section 148 was filed on 11.12.2018. Thus, the order of penalty under section 271-F is not in consonance with the observation in the assessment order. Further, the order bears the date of 20.06.2018 on first page and 20.06.2019 on last page are further self-contradictory. Therefore, the penalty levied under section 271-F is quashed/ delated. In the result, the appeal in ITA No. 231/Srt/2021 is allowed.
Order pronounced in the open court on 29th July, 2022, soon after closing of hearing of these appeals.
Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 29 /07/2022 *Ranjan
ITA No.227-231/Srt/2021 Sh. Kamlesh Singh Vs ITO Wd.2(2)(2) SRT
Copy to: 1. Assessee – 2. Revenue - 3. CIT(A) 4. CIT 5. DR 6. Guard File By order // True Copy // Sr.Private Secretary, ITAT, Surat