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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per: Bench: The instant two appeals of the assessee are directed against the order of the ld. Commissioner of Income Tax (Appeals), Bathinda,[in brevity the ‘CIT (A)’] order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity the Act] for A.Y.
2010-11.The combined order was passed by the ld. CIT(A) considering the &111/Asr/2019 2 Assessment Year: 2010-11 orders,which were framed by the ld. ITO, Ward 3(3)[in brevity the AO], Faridkot order passed u/s 144 and 271(1)(b) of the Act.
The assessee has taken the following grounds: “
1. That on the facts and in the circumstances of the case andinlaw, the learnedCIT(A) erred in not deciding the issue of re-opening thecase by issuing the noticeu/s 148.
2. That on the facts and in the circumstances of the case and in law, the learned AOhas re-opened the case on vague information after 4 years. The provisions of Explanation 2(a) of section 147 are not applicable. So, the re-opening as well as re-assessment is liable to be quashed.
3. That on the facts and in the circumstances of the case and in law, the learned AOhas re-opened the case of the assessee only on the basis of the bank deposits in ICICI Bank without giving the finding that these are of income nature. So, the reopening as well as re- assessment is liable to be quashed.
4. That the learned Pr. CIT, Bathinda erred in giving sanction to re-open the casemechanically and without application of mind on the facts of the case.
5. That the copy of reasons recorded was not supplied to the assessee during the course of assessment proceedings. So, he could &111/Asr/2019 3 Assessment Year: 2010-11 not meet the case. So, the reopening is bad in law and liable to be quashed.
6. That it is nothing but change of opinion as the assessee has filed the return ofincome on 04.11.2010. So, re-opening is liable to be quashed.
7. That on the facts and inthe circumstances of the case and in law, the learnedCIT(A) should have admitted the evidence which are of public documents being sale deeds and mortgage deeds. That the learned CIT(A) should have given more time to produce the copies from Tehsil office. 8. That the assessee has the financial capacity to deposit the amount in question onvarious dates out of the opening balance of cash, business income of past years and of current assessment year, of sale of animal shed and agricultural income. If we give credit of various incomes of past years as well as of current assessment year, then no addition is called for. 9. That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the addition of Rs. 700000/- keeping in view the facts and circumstances of the case. The learned as well as CIT(A) should have calculated the peak investment by considering both the additions. Actually, the addition of Rs. 700000/- is double addition.
&111/Asr/2019 4 Assessment Year: 2010-11
That on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the addition of Rs. 1492000/- keeping in view the facts and circumstances of the case.
That the learned AO should have applied the rate of 5% u/s 44AD on the gross receipts from the business turnover as admitted by the AO not the whole amount. 12. That the assessee is eligible for deduction u/s 24(b) of the Act for paying interest on the House Building Advance from SBI amounting to Rs. 80000/-. 13. That the assessee has the proof of depositing the amount in LIP and repayments of instalments of house building advance to SBOI. So,eligible for deduction u/s 80C. So, the addition of Rs. 100000/- is liable to be deleted. 14. That any other relief may kindly be granted to the assessee to whom he is found entitled at the time of hearing of appeal.”
The assessee has taken the following grounds: “
1. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the penalty of Rs. 10000/- imposed by the AO u/s 271 (l)(b) of the Act.
2. That the assessee was under the impression that his counsel Sh. J P Sharma, Advocate was attending the case before the AO from time to time. Even the assessee was under mental stress and admitted &111/Asr/2019 5 Assessment Year: 2010-11 to hospital. So, there was a reasonable cause and the penalty is liable to be quashed.
3. That the department should have kept in view the status of the assessee being a mistri i.e. illiterate person having no knowledge of income tax law which is complex in nature. So, the penalty is liable to be quashed.
4. That any other relief may kindly be granted to the assessee to whom he is found entitled at the time of hearing of appeal.”
Both the appeals were called for hearing. None was present on behalf of the assessee. Even the adjournment petition was not filed before the Bench. In view of the above and considering the nature of dispute, we proceed to dispose the appeal ex-parte qua the assessee after hearing the ld.DR and on the basis of material available on the record. Brief facts of the case are that the assessee is a trader. In ITA No. 5. 110/Asr/2019, the assessee’s case was reopened u/s 148 and the assessment was framed U/s 144/147 of the Act. The additions were made by the ld. AO related to peak credit for depositing cash in the bank account amount of Rs.14,92,000/-. The assessee deposited cash in bank amount of Rs.21,12,000/-. After a calculation of peak credit,the ld. AO has restricted the addition amount of Rs.14,92,000/- out of cash deposited in ICICI Bank account of the assessee and has treated the amount as &111/Asr/2019 6 Assessment Year: 2010-11 undisclosed source of income. The addition was also made related to deposit of cheque amount of Rs.7 lacs which the ld. AO has treated as suspicious transaction.
After the credit entries in bank amount of Rs. 7lakh within next day all the amount was withdrawn. Hence, Rs.7 lac is treated as income from undisclosed sourceand with the total income of the assessee. Further the disallowance was made under Chapter VIA amount of Rs. 1 lacs. In 271(1) (b) which was initiated for non-complying notice U/s 142(1) during the assessment proceeding. The amount of Rs.10,000/- is levied u/s 271(1)(b) of the Act. Aggrieved assessee filed the appeals against both the orders before the ld. CIT(A). But remain unsuccessful.
Being aggrieved assessee filed an appeal before us.
Both the appeals are clubbed together, heard together and disposed of by this common order for the sake of convenience.
In this case, the assessee has taken the ground which is mostly related to legal ground by challenging the jurisdiction for reopening u/s 148 of the Act. But the issue was never challenged before the ld. CIT(A) during appeal proceeding.
Further on perusal of the assessment order thejurisdiction was never be challenged &111/Asr/2019 7 Assessment Year: 2010-11 before the ld. AO. The assessee was not able to substantiate any such documents that the assessee was agitated these jurisdiction issue before the lower authorities.
7.1 The ld. Sr. DR vehemently argued and only relied on the order of the ld. CIT(A). The revenue authorities have mentioned that the assessee has taken very limited ground during the appeal proceeding. The ld. DR invited our attention in point no. 2 page no. 2 of the appeal order which is extracted as below: “2.0 The appellate proceedings were attended by Sh. Pankaj Arora, Advocate on behalf of the appellant from time to time. The appeal has been instituted against the above-mentioned order and as per Form 35, the appellant has taken following grounds of appeals in this case: - “1. That the assessment order has been received on dated 26.12.2017 and the appeal is being filed within limitation of time.
2. That on the facts and in the circumstances of the case, the order passed by the Ld. A. O. is against the law and facts and is without any jurisdiction and hence not applicable to the facts of the case.
3. That the Assessment order passed by the Ld A.O is highly erroneous, illegal and uncalled for and is liable to be set aside.
4. On the facts and in the circumstances of the case, the Ld Income Tax Officer was incorrect & unjustified in issuing the notice under section 148 of the Income Tax Act is illegal. The A.O. without affording any opportunity to the appellant, being prompted by his &111/Asr/2019 8 Assessment Year: 2010-11 whims and fancies, issued the notice without following the legal provisions.” 8. We heard the submission of the revenue and considered the documents available in the record. We find that the entire issue was not properly agitated before the ld. CIT(A). Even the legal grounds which are taken before the bench is never be taken before the lower authority. In our considered view we remit back the appeal bearing before the ld. CIT(A) for adjudicationde novo by considering both the legal and factual ground. 9. In the result, the appeal bearing ITA No. 110/Asr/2019 is allowed for statistical purposes.
10. The issue was also challenged before the bench related to penalty u/s 271(1)(b) for non-compliance of notice U/s 142(1) of the Act during the assessment proceeding.
11. The ld. Sr. DR vehemently argued and relied on the order of the ld. CIT(A). Page no. 5 para 8 of the CIT(A) order is extracted as below:
“8.0 This appeal is against order dated 20.12.2017 passed by the A.O u/s 271(1 )(b) for nonattendance of the notice dated &111/Asr/2019 9 Assessment Year: 2010-11
12.07.2017 u/s 142(1) of the Act issued by the AO. The appellant neither filed the details nor attended the proceedings. The A.O issued show cause u/s 274 of the Act for levy of penalty which was also no attended. Hence, Rs. 10,000/- was levied as penalty. 8.1 In the appeal it was contended that the appellant was doing the business of petty repairs and was not aware to the intricacies. He was suffering from mental stress and on that date admitted to hospital. However, no documentary evidence was provided. 8.2 I have considered the details given in the impugned order as well as assessment order in this case and find that the appellant has been non cooperative to the entire assessment proceedings. There was no evidence of mental stress and it transpires that deliberately there is non-compliance of the proceedings. The A.O. was justified in imposing penalty. 9.0 In the result, the appeal of the appellant is dismissed.”
We heard submission of revenue and considered the documents available in the record. The assessment was framed by the ld. AO u/s 144 of the Act. It is very clear that assessee was non cooperative during assessment proceeding. Further in appeal proceeding before the CIT(A) theassessee was not able to substantiate any &111/Asr/2019 10 Assessment Year: 2010-11 such evidence that there is a reasonable cause for non-levying of penalty u/s 271(1)(b) read with Section 274 of the Act. In the ground, the assessee mentioned that due to the medical cause the notices of the AO was non-complied. The reasonable cause should be verified by the ld CIT(A) as the assessee has taken the issue first time before the bench. We remit back the issue before the ld. CIT(A) for de novo adjudication related penalty U/s 271(1)(b). The appeal of the assessee bearing ITA 111/Asr/2019 is allowed for statistical purpose.
In the result, the appeal bearing 111/Asr/2019isallowed for statistical purposes.