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Income Tax Appellate Tribunal, “RAJKOT” BENCH, RAJKOT
Before: SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR
The appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Rajkot (‘CIT(A)’ in short) vide Appeal No. CIT(A)-2/10317/2016-17 dated 13.12.2017 arising in the penalty order dated 23.12.2016 passed by the Assessing Officer (AO) under s. 144 r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning AY. 2010-11.
(Mr. Jayesh M. Thesiya vs. ITO] A.Y. 2010-11 - 2 - 2. The ground of appeal raised by assessee reads as under:
“1. The order of the CIT(A) in so far as he assessed the total income at Rs. 19,67,160/- against NIL returned income which is totally bad on facts as well as in law.
The CIT(A) erred in law and on facts in arriving at the conclusion for making the addition in the total Income of Rs. 17,27,159/- on account of Unexplained Cash Deposits in the Bank Account. Further, the appellant has not been given proper time to produce the relevant documents before the Learned CIT(A) and the benefit of credit of cash available on hand for redeposit has also not been given to the appellant.
3. The CIT(A) erred in law and on facts in arriving at the conclusion for making the addition in the total Income of Rs.2,40,000/- on account of Household Expenses.
The appellant further states that even otherwise on the facts and merits of the case the impugned addition is wholly untenable and requires to be deleted.
The appellant denies to pay interest U/s 234B and 234C on the assessed income. The assessing officer ought to have charged interest U/s 234 B and 234 C on the return income.
6. The learned assessing officer has erred in law and on facts in initiating penalty proceedings u/s 274 r.w.s 271 (1) (c) of the IT Act 1961 for concealment of particulars of income and furnishing of inaccurate particulars of income.
The appellant reserves his rights to add, amends, alter, and modifying or to raise additional grounds of appeal during the course of hearing.”
In this ease, the assessee had made huge credit deposit/cash deposits in bank accounts maintained with Punjab National Bank, Danapith, Junagadh during the relevant financial year under assessment, however, it was noticed that he had not filed return or income. Therefore, the source of making deposits had remained unexplained. Hence, notice u/s.148 28.03.2016 was issued after obtaining approval from the Pr. CIT, Rajkot.
3.1 In response to notice u/s. 148, the assessee did not comply. Therefore, further letters and notices u/s.142(1) requesting him to file return of income and other details, were issued. However, none of them have been compiled.
(Mr. Jayesh M. Thesiya vs. ITO] A.Y. 2010-11 - 3 - Details of notices issued and compliance thereof, from beginning of assessment to till date, are as under:
Details of notice issued Details .called for Date of Mode of Date of Status of Sr. service ssrvice hearing compliance No, 1 30.03.2616 RPAD Notice u/3. 148, dated Return of income for Within 30 Neither complied 28.3.16 AY the above. AY days of nor adjournment service sought 2 30.03.2016 RPAD 18.04.2016 -do- Notice u/s.142(1) dated" Request to file return 28.3.16 and details like copies of a/c. etc. 3 -do- 19.06.2016 -do- Notice u/s. 142(1) dtd. 06,06.2016 RPAD 31.5.16 Showcause for penalty 4 -do- 17.08.2016 -do- Notice u/s. 142(1) dtd. 10.07.2016 RPAD 28.7.16 & showcause for penalty -do- 30.08.2016 15.09.2016 -do- 5 Notice u/s. 142(1) dtd. Personally 29.8.16 & showcause for penalty -do- RPAD 23.09.2016 -do- 6 Summons u/s. 142(1) dtd. 17,09.2016 28.7.16 & showcause for penalty -do- RPAD 11.11.2016 -do- 7 Notice u/s. 142(1) dtd. 28.102018 28.7.16 & showcause for penalty 3.2 Thus from the above chart, it is seen that the assessee has not complied any of the notices issued till date. Therefore, vide this office’s showcause dated 11.11.2016 fixing date of hearing on 23.11.2016; the assessee was asked to show cause as to why assessment should not be finalized ex-parte considering the materials available on records and served upon the assessee by RPAD.
3.3 However, till date, the assessee has not complied the above show cause notice. Therefore, the AO with no alternative but presumed that the assessee has no objection to the action proposed by the Department, in the showcause. Hence, the re-open assessment proceedings are decided ex-parte to his best judgment considering all the material and details available on record. Accordingly, the AO finalized the assessment on the following grounds:
(Mr. Jayesh M. Thesiya vs. ITO] A.Y. 2010-11 - 4 - 3.4 As per the details available on record, it is noticed that the assessee had made huge cash/credit deposits. Vide this office’s letter dated 10.06.2016, information was called for u/s.133(6) of the Act from PNB, Danapith Branch, Junagadh, and in response, Bank has filed following reply:
Sr. Name of Account No. Amount deposit during FY No. Bank relevant to AY 1 PNB 0238000100833059 Cash 17,27,155/- Transfer 0/- NEFT 0/- Clearing 0/- Interest 4/- Total 17,27,159/- However, till date, the assessee has not complied till date. Therefore, the issue of credit/cash deposit is decided as under: a) The assessee has not produced Bank/Cash Book; therefore, the source of credit/cash deposits is not verifiable. b) The assessee has not produced any sale bills, therefore, it is not verifiable whether the credit/cash deposits is on account of cash sales, sale realization from debit sales, etc. c) The assessee has not furnished complete name, address, confirmation, contra a/c, ack. Of return of income, relevant portion of bank/cash book of the persons from which cheques/cash has been received. Therefore, this issue also remains unverified. d) The benefit of credit of cash available on hand for redeposit (by making summary) is not allowed as it is also not known whether the assesse has re-deposited the same amount or not. Also the assessee has not made any claim for allowing benefit of credit of withdrawals made earlier from the same account. e) The assessee has not filed the reply to any of the notices. Therefore, it is clear that the assessee has no explanation regarding the source of cash deposits.
(Mr. Jayesh M. Thesiya vs. ITO] A.Y. 2010-11 - 5 - 3.5 In view of the above findings, source of credit/cash deposits remains unexplained and the same is treated as unexplained cash credit u/s 68 of the I T Act. Accordingly, an addition of Rs.17,27,159/- is made to the total income of the assessee, u/s.68 of the I T Act. Penalty proceedings u/s.271(1)(c) of the IT Act, are initiated for furnishing inaccurate particulars of income and concealment of Income.
3.6 The assessee has not furnished any details regarding the house hold withdrawals. Therefore, it is not known as to what are his house hold withdrawals. The AO had taken into consideration that rate of inflation, price index and cost of day-to-day needs fikeiyto.be incurred during the relevant financial year under assessment and he was of the opinion that minimum amount of Rs.20,000/- p.m. would be required to cater the needs. Therefore, AO estimated house hold withdrawal of Rs.2,40,000/- p.a. and the same was added to the total income. Thus, the AO made total addition of Rs.19,67,160/-.
4. Thereafter, assessee preferred first statutory appeal before the learned CIT(A). Before learned CIT(A), it was contended by the assessee that matter was decided ex parte by the learned AO and even before the learned CIT(A), assessee could not file his submission. As mentioned in the statement of facts, learned CIT(A) did not grant him enough time to submit his document. Learned CIT(A) has mentioned that despite of the fact that several opportunities were given to the assessee to file his submission but he could not file the relevant papers for the reason best known to him.
5. On the other hand, assessee contended in his appeal memo that learned CIT(A) did not grant him enough time and opportunity to file relevant papers in support of his case before learned CIT(A). Therefore, in such facts and circumstances and in the interest of justice, we set aside this matter back to the file of the learned AO subject to the condition that a penalty of Rs.1000/- shall (Mr. Jayesh M. Thesiya vs. ITO] A.Y. 2010-11 - 6 - be imposed on the assessee as he has wasted precious time of the Revenue authority and did not file any relevant details in support of its case and same to be deposited with the department within 60 days from the receipt of this order. Thereafter, the AO shall decide the matter after giving an opportunity of being heard to the assessee and pass the order as per law.
In the result, the appeal filed by the Assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 31/05/2022
Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 31/05/2022 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,