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Assessee by Ms. Kinjal V Shah, CA Revenue by Ms. Anupma Singla,Sr-DR Date of hearing 08.02.2022 Date of pronouncement 08.02.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. Commissioner of Income tax (Appeals)-4 Vadodara [ ‘CIT(A)’ for short] dated 24.09.2019 for assessment year (AY) 2011-12 which in turn arises from the assessment order dated 31.01.2014 under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.01.2014. The assessee has raised the following grounds of appeal:- “I On Cash Credit of Rs.23,04,900/-
1. The CIT(A) has erred both in Law and in Fact in confirming addition of Rs.23,04,900/- made by the Assessing Officer u/s 68 of the Act. Your Appellant submits that facts of the case and provisions of Law Sec.68 does not apply and therefore no addition was called for.
2. Your Appellant submits that various depositors are known persons who has proved their identity, creditworthiness and genuineness and the and the transaction being genuineness all ingredients required are satisfied and hence addition u/s 68 was not liable to be made by the Assessing Officer.
3. Your Appellant submits that the entire amount of Rs.23,00,900/- with includes cheques of Rs.1,55,000/-being deposits in the bank account, Sec.68 does not apply and prima facie the CIT(A) ought to have deleted the addition in view of various judgements of various judicial authorities including binding judgements of Ahmedabad income-tax Appellate Tribunal. Rs.5.61,834/-
4. Without prejudice to above your Appellant submits that the amount u/s 68 has not been correctly worked out and CIT(A) has erred in not following principle of “Peak Credit” and that if any amount is liable to be added then it should be Peak Credit only. II. On Bank interest Rs.12,305/- Your Appellant further submits that the ITO had erred in including Rs.12,305/-being interest from Central Bank of India, Bank of Baroda and since bank interest was not liable to be taxed as income the ITO ought to have included the same as Appellate Tribunal. Rs.3,802/-
2. Brief facts of the case are that assessee is School teacher (Individual) filed his return of income for the assessment year (AY) 2011-12on 31.01.2011 declaring total income of Rs.3,36,610/-. The case was selected for scrutiny. The Assessing Officer while passing his assessment order made addition on account of unexplained cash credit in saving bank account of Rs.23,04,900/- and interest thereon of Rs.13,305/-.The Assessing Officer made addition by taking view that assessee has not explained anything about the entries credit in his bank account. Aggrieved by the addition in the assessment order, the assessee filed appeal before Ld. CIT(A). The Ld. CIT(A) confirmed the action of Assessing Officer in ex parte order. The Ld. CIT(A) while passing impugned order recorded that assessee was served with a number of notices at the address provided in Form-35, however, no compliance was made by assessee. The Ld. CIT(A) upheld the action of Assessing Officer by holding that the view and finding recorded by Assessing Officer remained uncontroverted. Further aggrieved the assessee has filed present appeal before the Tribunal.
We have heard the submissions of Ld. Authorized Representative (AR) for the assessee and Ld. Senior Departmental Representative (DR) for the Revenue and have gone through the orders of lower authorities. At the outset of hearing, Ld. AR of the assessee submits that the Assessing Officer as well as Ld. CIT(A) passed ex parte order. The assessee could not explain the credit in his bank account, therefore one more opportunity to explain the cash credit may be granted. The Ld. AR of the assessee submits that she undertake on behalf of assessee to be vigilant in future and to attend the proceeding before lower authorities. The Ld. AR of the assessee submits that even otherwise she is ready to argue the case on merit as the assessee has sufficient evidence to prove the identity of creditors, creditworthiness and genuineness of transactions. The Ld. AR of the assessee submits that assessee has already placed on record the sufficient documentary evidence to prove all three ingredients of the addition under section 68 of the Act.
On the other hand, Ld. Sr.DR for the Revenue submits that before Assessing Officer as well as Ld. CIT(A) assessee has not discharged his onus by filing sufficient documentary evidence to prove his case. The assessee is habitual in not making timely compliance, the ld CIT(A) has given ample opportunity, however, the assessee failed in making compliances of all the notices. In such circumstances the assessee does not deserve any leniency.
On the merit of the case, the ld Sr DR for the revenue submits that the Ld. CIT(A) pass non-speaking order without discussing the merit of the case, if in any circumstances, the Hon’ble Tribunal deem it necessary to consider the case on merit, that the matter may be restored to the file of Ld. CIT(A) for considering the evidence and assessee may be directed to be more vigilant in pursuing his case before lower authorities. 6. We have considered the rival submissions of both the parties and find that the Ld. CIT(A) passed the ex parte order after recording the fact that assessee was given a number of notices and recorded that the conduct of assessee shown that he has not interest in pursuing his appeal. The Ld. CIT(A) dismissed the appeal of assessee in limine in non-speaking order. Further, we find that the Assessing Officer also made addition by holding that the assessee did not explain anything on the credit entries in his bank account. The AO accordingly made additions of total cash credit consisting cash deposit of Rs.21,49,900/- and cheque deposit of Rs.15,500/- in Central Bank of India as unexplained credit. The Assessing Officer also disallowed consequential interest of his credit. 7. Now, before us Ld. AR of the assessee urged that assessee may be given one more opportunity of hearing to explain his case on merit. And that assessee has a good case on merit and will succeeds if one more opportunity is given and the appeal is decided on merit. We instead of going into controversy that assessee has not furnished necessary details and substantiate the grounds of appeal raised before Ld. CIT(A) in time or not. We find that the order passed by Ld. CIT(A) is not in accordance with mandate of Section 250(6) of the Act. Section 250(6) of the Act mandates that the Ld. CIT(A) while deciding the appeal is required to pass order on various grounds of appeal, decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the appeal of assessee is restored back to the file of Ld. CIT(A). The assessee is directed to provide all necessary details in discharging his onus to prove the case. The Ld. CIT(A) is also given liberty to seek remand report from Assessing Officer if so desire. The assessee is further directed to be more vigilant in attending/ responding to the notices of Ld. CIT(A) or National Faceless Appeal Centre (NAFC) and not to cause