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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
ORDER PER YOGESH KUMAR U.S., JM: This appeal by Revenue is filed against the order of Learned
Commissioner of Income Tax (Appeals)-6, Delhi [“Ld. CIT(A)”, for short], dated 21/08/2017 for Assessment Year 2009-10. The following grounds taken in this appeal are as under:
“1. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting addition of Rs. 23,35,76,491/- u/s 68 of the Income Tax Act, 1961 (the Act) on account of cash deposits in bank account even when the assessee had failed to discharge its initial onus to prove the genuineness of source of cash deposited in the bank during the course of assessment proceedings even after providing sufficient opportunities to the assessee ? 2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting addition of Rs. 23,35,76,491/- on account of cash deposits in bank account by ignoring the provision of section 68 of the Act in this regard and also by ignoring the fact that the assessee had failed to discharge its initial onus laid down u/s 68 of the Act ? 3. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting addition of Rs. 23,35,76,491/- u/s 68 of the Act even when the addition was made by the assessing officer (the AO) on the basis of credible information available with the department and also by ignoring the fact that action of the AO initiating proceedings u/s 148 of Act was upheld as justified by himself in the instant appellate order ? 4. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting addition of Rs. 23,35,76,491/- u/s 68 of the Act on account of cash deposits in bank account by accepting submission/documents filed by the assessee during appellate proceedings even when the assessee had not fulfilled conditions as laid down under Rule 46A of the Income Tax Rule, 1962 (the Rule) and no opportunity was provided to the Assessing Officer of being heard ?
5. That the appellant craves leave to add, alter, amend or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.”
The brief facts of the case are that the assessee filed its return declaring total income at Rs.1,03,500/-. The return was processed u/s 143(3)/147 of the Act. The Assessment Order came to be passed u/s 143(3)/147 of the Act on 29/12/2016 by making addition of Rs.23,35,76,491/- u/s 68 of the Act being as unexplained credit.
ITO vs. Neelkamal Impex Pvt. Ltd. 3. Aggrieved by the Assessment Order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), vide order dated 21/08/2017 allowed the appeal by deleting the addition made by the Assessing Officer (“AO”, for short). As against the order of Ld. CIT(A) dated 21/08/2017, the Department preferred the present appeal on the grounds mentioned above.
None appeared on behalf of the assessee even after issuing several notices to the registered address of the assessee. A power attorney is also filed by the representative of the assessee, but the representative of the assessee failed to appear before the Tribunal.
Considering the above facts and circumstances, we deem it fit to decide the matter after hearing the Ld. Departmental Representative (“Ld. DR”, for short) and on verifying the material on record.
The Ld. DR vehemently submitted that the Ld. CIT(A) committed an error in deleting the addition of Rs.23,35,76,491/- on account of cash deposits in bank by accepting submission/documents filed by the assessee during the appellate proceedings, even though the assessee had not fulfilled the conditions as laid down under Rule 46A of the Income Tax Rule,
ITO vs. Neelkamal Impex Pvt. Ltd. 1962 (the Rule) and no opportunity was provided to the AO of being heard, therefore, the order impugned of the Ld. CIT(A) requires interference at the hands of the Tribunal.
We have heard the Ld. DR and verified the material on record.
During the course of assessment proceedings, the Ld. AO gave several opportunities to the assessee to prove the source of credit entries in his bank account, but the assessee even after availing several opportunities, failed to prove the source of credit entries in his bank account. The Ld. A.O. proceeded to make the addition of Rs.23,35,76,491/-. The assessee opted not to furnish any details and clarification to the A.O., though, the A.O. has given sufficient opportunities to do so.
6.1 It is found from the order of the Ld. CIT(A), that during the appellate proceedings, the assessee had furnished books of account for examination. Considering the fact that the books of account was not before the A.O. and the same was produced before the Ld. CIT(A), which was examined by the Ld. CIT(A) being an additional evidence, the Ld. CIT(A) was bound to comply with all the conditions of Rule 46 of the Rules. On going through the order of ITO vs. Neelkamal Impex Pvt. Ltd. the Ld. CIT(A), it is found that the Ld. CIT(A) has admitted the additional evidence in violation of Rule 46A of the Rules and has not given any opportunity to the A.O. to examine or to rebut the additional evidence produced by the assessee. Thus, in our opinion, if the matter is remanded to the file of the A.O. for de novo adjudication, substantial justice would be rendered. Accordingly, the matter is remanded to the file of the Ld. AO for de novo adjudication of the matter and the A.O. shall provide opportunity of being heard to the assessee and decide the matter in accordance with law.
In the result, the appeal filed by the Revenue is partly allowed for statistical purposes.