RASHMI GHOSH,AMRITSAR vs. INCOME TAX OFFICER WARD-4 (4), AMRTSAR

ORDER Per Dr. M. L. Meena, AM: The appeal by the assessee is directed against the order of the CIT(Appeal), National Faceless Appeal Centre, (NFAC), Delhi.

“1. That the assessment order as well as the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi are both against the facts of this case and are untenable under the law.

2 Reshmi Ghosh v. ITO 2. That no reasonable and proper opportunity of being heard was allowed before passing the assessment order. As such the order of the Ld CIT(A) thereby confirming the same is also liable to be cancelled.

7. That the CIT(A) has grossly in deciding the case ex-parte and confirming the addition without appreciating and understanding the facts of the case. The worthy CIT(A) has clearly violated the principle of natural justice. As such the addition made may be deleted.

8. That alternatively the addition made is very high & excessive.

10. That alternatively the interest charged u/s 234A and 234B is very high & excessive.

3. Apropos grounds no. 2 and 7, the assessee has challenged the impugned order of the CIT appeal on account of principles of natural justice as no reasonable and proper opportunity of being heard has been allowed to the assessee.

4. Briefly, the facts as per record are that the case of the assessee was selected for limited scrutiny under CASS in view of substantial cash deposits made by the assessee during the year. AO has issued notice under section 143(2) and 142(1) through electronically. He stated that assessee failed to comply the questionnaire sent along with the notice dated 05 009.2019 issued under section 142(1) of the act. In another notice under section 142(1) was issued to the assessee on 05.11.2019 and 25.11.2019. However, assessee failed to comply with the said notices despite the fact that these notices were duly delivered to the assessee.

Finally, a show cause notice was issued to the assessee on 14.12.2019 electronically but assessee failed to comply with the said notice. In view of the above facts, the AO passed best judgement assessment as per 4 Reshmi Ghosh v. ITO provisions of section 144 of the income tax act by treating the cash deposits to the tone of � 3309280/- in the bank account number 32962958439 maintained with SBI during the demonetization period in the name of Mrs Rose enterprises, as unexplained cash and that to the return income.

5. Being aggrieved, assessee went in appeal before the CIT appeal who has confirmed the finding of the assessing officer by passing a detailed speaking order although it is challenged by the appellant as passed ex parte qua the assessee.

6. The learned counsel for the assessee submitted that no reasonable and proper opportunity of being heard was allowed before passing the assessment order and that the Ld. CIT(A) has grossly erred in passing the ex-parte order by rejecting the appeal of the assessee and as such the order of the Ld CIT(A) thereby confirming the same is also liable to be cancelled. The ld. AR contended that the Ld. CIT(A) has erred in confirming the addition of Rs.33,09,280/- without appreciating the facts of the case. He argued that the authorities below did not appreciate the basis of cash deposits in the bank that assessee was a commission agent and that the assessee was entitled to only meager commission on account of business transacted on behalf of State Bank of India. He further stated that the 5 Reshmi Ghosh v. ITO authorities below did not appreciate that the cash deposited in the bank belongs to various customers of State Bank of India, on which the assessee was earning only commission income as the assessee was working as an Agent working on behalf of the bank. As such the addition made by the AO is unjustified, uncalled for and the same may be deleted.

Similarly, the worthy CIT(A) has grossly erred in confirming the order of the AO without application of mind and without appreciating the facts of the case. Thus, the CIT(A) has grossly in deciding the case ex-parte and confirming the addition without appreciating and understanding the facts of the case in violation of the principle of natural justice. As such the addition made may be deleted.

9. It is seen that the Ld. CIT(A) has passed a detailed order, discussing the each and every fact of the case, and it was failure on the part of the appellant assessee who was required to participate in the appellate proceeding in adjudication of its appeal and addressal of its grievance and merely agitating before us that impugned order passed expartie qua the assessee by authorities below without cooperation during the assessment and appellate proceedings is not justified. However, the assessee contention that he has not been served show cause notice by the CIT(A) before taking adverse view by way of endorsing the finding of the AO, has merit. The CIT(A) ought to have granted opportunity in rebuttal to controvert the department view. Moreover, the Ld. CIT(A) has confirmed the findings of the AO on the cash deposits in bank, the assessee was required to be heard before deciding the appeal on merits by passing an speaking order by way of disposing off the objections of the assessee after affording due opportunity of being heard according to the principles of natural justice. We, therefore, set aside the order of the CIT(A) and restore the matter back to his file with the direction to adjudicate the appeal afresh on merit after affording proper opportunity of being heard to the assessee 7 Reshmi Ghosh v. ITO and the AO. No doubt, the assessee shall cooperate in the fresh proceedings before the Ld. CIT(A).

Order pronounced, in the open Court on 21/04/2022.