ATAM PARKASH,PATIALA V. .CIT(APPEALS), PATIALA, PATIALA

ITA 412/CHANDI/2023

AI Insights

The case involves Atam Parkash, the appellant, who contested an ex-parte assessment order under section 144 of the Income Tax Act, 1961, which added Rs. 74,43,595 as unexplained cash credits to his income for the assessment year 2011-12. The initial assessment and subsequent appeals were marked by the appellant's non-cooperation and failure to provide required information, leading to an ex-parte order. The Tribunal noted the procedural lapses and the ex-parte nature of the lower authorities' decisions, leading to the decision to remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107651 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: DEV AHUJA
• Keywords: Condonation of delay; Set aside; Business income; Unexplained cash credit
• Section: 144; 142(1); 143(2); 131; 69A; 246A

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ᮰ी कृणव᭠त सहाय, लेखा सद᭭य एवं ᮰ी परेश म. जोशी, ᭠याियक सद᭭य BEFORE: SHRI. KRINWANT SAHAY, AM & SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ ITA NO. 412/Chd/2023 िनधाŊरण वषŊ / Assessment Year : 2011-12 Atam Parkash 248, Street No. 5 Tripuri Town, Patiala बनाम The ITO Ward-1, Patiala ˕ायी लेखा सं./PAN NO: AAUPP3504C अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Dev Ahuja, Advocate राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, JCIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 29/10/2024 उदघोषणा की तारीख/Date of Pronouncement : 18/12/2024 आदेश/Order PER PARESH M. JOSHI, J.M. : This is second appeal filed by the assessee under section 253 of the Income Tax Act, 1961(hereinafter referred to as the Act). The assessee is aggrieved by the order dt. 03/08/2017 passed by CIT(A), Patiala in 1st Appeal No. 117/IT/CIT(A)/PTA/14-15 under section 250(6) of the Act which is hereinafter referred as “impugned order”. The relevant A.Y. is 2011-12 and the corresponding previous year period is from 01/04/2010 to 31/03/2011. The assessee had filed first appeal under section 246A of the Act as he was aggrieved by the Assessment Order dt. 11/02/2014 passed under section 144 of the Act. 2. Factual Matrix 2.1 That the assessee filed return declaring on income of Rs. 4,44,070/- on 31/03/2012. Thereafter, the case was selected for scrutiny through CASS. Notice under section 143(2) and 142(1) of the Act dated 07/09/2012 was issued and could not be served on the assessee in ordinary manner. Even the notice sent through post was 2 received back with the Remarks “Left without giving any address”. Thus , the notice was served through affixture by Shri Harbans Singh, Inspector and Shri Prem Chand Notice server on the conspicuous part of the place where the assessee is known to have last resided. 2.2 That again questionnaire dated 12/04/2013 was issued which was served on the assessee. Again questionnaire dated 2.9.2013 alongwith notices u/s 143(2) and 142(1) of the I.T. Act were issued and served through affixture fixing the case for 11.09.2013. None attended in response to these notices. Again a letter dated 23.9.2013 was issued calling for the information sought for vide questionnaire initial questionnaire dated 12.4.2013 fixing the case for 6.10.2013. None attended on this date too. On 7.4.2013 Sh. Ajay Singh, CA appeared and stated that he will furnish the Power of Attorney later on. However, he was asked to furnish the following information vide order sheet entry dated 7.10.2013: “Furnish Income-tax return, computation of income, audit report for the A.Y. 2011.12. He is also requested to furnish the following: a) Detail of any other source of income. b) Detail of bank account in your name or in the name of the family members. c) Detail of your family members, monthly household expenses and sources to meet these expenses. d) Details of FDRs, NSCs, Post office deposits and deposit in any other institution. e) State whether the assesse is assessed to wealth tax.” The case was fixed for hearing on 15.10.2013. Neither anybody attended nor any adjournment was sought. Again summons u/s 131 of the I.T.Act, 1961 was issued to the assessee on 1.11.2013 fixing the case for 22.11.2013 which was duly served on the assessee on 7.11.2013. None attended on this date also. Again penalty notice u/s 271(l)(b) of the I.T.Act was issued to the assessee on 13.12.2013 fixing the case for 23.12.2013. On this date, Sh. Ajay Singh, CA sent a letter mentioning therein that he could not attend this office to some personal obligation and sent his Power of Attorney. 3 2.3 On 27.1.2014 the CA of the assessee was contacted telephonically to file the reply. Sh. Ajay Singh CA alongwith the assessee appeared on 28.1.2014. The undersigned tried to take the statement of the assessee. During the course of statement the assessee stated that he is dealing in ready made garments in the name and style of Fashion Shoppee. The assessee was specifically asked about cash deposits in the following banks: IDBI Rs. 17,13,000/- ICICI Rs. 11,44,445/- SBI Rs. 19,25,800/- AxisBank Rs. 15,68,650/- HDFC Bank Rs. 10,91,700/- In reply the asssssee stated that these are out of sale proceeds from the shop. Some of these are out of loans availed. He said that he will come tomorrow and furnish the details of loans and other details. From the date of initiation of assessment proceedings till the completion of the assessment the assessee had not cooperated with the department. Neither he nor his counsel has submitted a single piece of information. 2.4 That as per information available with this office, the assessee had made following deposits in different banks: Bank Amount deposited IDBI Rs. 17,13,000/- IC1CI Bank Limited RS. 11,44,445/- State Bank of India Rs.19,25,800/- Axis Bank Limited Rs.15,68,650/- HDFC Bank Rs. 10,91,700/- (Total Rs. 74,43,595/- What to talk about the explanation of these credits entries, the assessee was reluctant to give even the details of these bank accounts. When he was asked to explain about 4 these entries, he said that I could give information only after procuring the details of the loans availed by him. 2.5 That again a final show cause notice dated 5.2.2014 was issued fixing the case for 11.2.2014. Vide this letter, assessee was requested to show cause as to why Rs. 74,43,595/- may not be treated as unexplained cash credits and added back to his returned income. On this date again the counsel of the assessee sent a letter that Sh. Atam Parkash is out of country and no information has been received from him yet. Thus, he sought adjournment. The assessee is adopting delaying tactics throughout the assessment proceedings on one pretext or the other and did not file any information, explanation, justification in respect of questionnaire issued and querries raised 2.6 That keeping in view non attendance, non-filing of information and non cooperative and evasive attitude of the assessee to complete the assessment, I have left with no other alternative to complete the assessment ex-parte u/s 144 of the I.T.Act, 1961 to the best of my knowledge and material/documents placed on record. Therefore, I complete the assessment ex-parte u/s 144 of the I.T. Act, 1961 to the best of my knowledge and information available on record, addition of Rs.74,43,595/- is made on account of unexplained cash deposit/money u/s 69A of the I.T. Act, 1961 in different saving accounts to the returned income of the assessee. 2.7 That with these observations, income of the assessee is computed as under: Income as shown by the assessee Rs. 4,44,070/- in return Add: Addition as discussed above in para 3. Rs. 74,43,595/- Total Taxable income: Rs. 78,87,665/- 5 2.8 That the aforesaid assessment order dated 11/02/2014 was challenged by the assessee before the Ld. CIT(A) in first appeal under section 246A of the Act and the Ld. CIT by impugned order has dismissed the appeal of the assessee consequently Ld. AO order dated 11/02/2014 is sustained. 2.9 That the assessee being aggrieved by the impugned order has preferred second appeal in terms of section 253 of the Act before this Tribunal and in Form No. 36 has raised following grounds of appeal: 1. On the facts and circumstances of the case the Ld. AO has erred in making the addition of Rs. 74,43,595/- u/s 69A of the Income Tax Act by treating the deposits in the IDBI, ICICI, SBOI, Axis and HDFC Bank as unexplained deposits instead of business receipts/transactions. 2. The appellant carves leave to add or amend the aforesaid ground before disposal of the appeal. 3. Record of Hearing The hearing in the matter took place before this Tribunal on 29/10/2024 when both Ld AR for and on behalf of the assessee appeared and was heard on his submissions. The Ld. DR who appeared for and on behalf of the Revenue supported the orders of the both the lower authorities. However the Registry by letter dated 26/07/2023 has pointed out to the assessee that his appeal by hand was received on 27/06/2023 and that appeal is prima facie time barred by 2061 days and therefore the assessee was asked to show cause why appeal should not be dismissed or why condonation of delay application as per rule should not be filed. The Registry by letter dated 04/07/2023 addressed to CIT(A) Patiala was requested to communicate to the Tribunal as to when impugned order dated 03/08/2017 in Appeal No. 117/IT/CIT(A)/PTA/14-15 was served on the assesse. In response the O/o CIT(A) Patiala vide letter dtated 19/07/2023 communicated to the Registrar of this Tribunal that as per the record maintained by them order was sent to the address of the assesse on 30/08/2017 via speed post. The AR 6 of the assesse vide letter dt. 16/08/2023 in response to Registry letter dt. 26/07/2023 (supra) submitted that condonation of delay along with Affidavit in support is already filed with appeal on 27/06/2023 however they once again enclosed copy of same. 3.1 In the condonation of delay application the assessee has pleaded that delay be codoned as his original counsel Shri Ajay Singh CA remained ill for a long time and unfortunately has expired. That he came to know of passing of impugned assessment order and 1st appellate order when Department pressed for recovery of demand. A new counsel was engaged who carried out inspection of record in office of ITO and obtained both orders. However the same was obtained on 30/05/2023. It is averred the appellate order was not received before 30/05/2023. It is contended assessee fully remained depended upon his earlier counsel. The delay occurred is bonafide, unintended and beyond control of assessee and be condoned. We notice that by affidavit dated 16/06/2023 above facts are solemnly affirmed and declared. 3.2 In addition to above facts on codonation of delay it was contended that orders of lower authorities are exparte and in interest of justice matter be set aside remitted back. The Ld. DR has left this issue be decided by Tribunal as per law. 4. Findings & Conclusions 4.1 We in the premises laid down as above are of the considered view that delay of 2061 days in preferring second appeal is explained on account of prolonged illness of earlier counsel of the assessee who finally expired due to long illness. All papers and proceedings of tax matters of the assessee was with him. The assessee was totally dependent upon him for tax matters. Ultimately assessee engaged new counsel in April 2023 (After recovery was initiated by Department) who obtained all documents 7 including orders on 30/05/2023 from ITO. We therefore condone the delay, as sufficient cause is shown. Delay is not deliberate. 4.2 We notice that both the orders of the lower authorities are exparte due to one or more reasons. However we deem it fit and proper to remit the matter back to the file of the Ld. AO for fresh adjudgement and adjudication according to law. Consequently we set aside the impugned order and remit the matter back to the file of Ld. AO who shall pass a fresh order on merits within 60 days from date of receipt of this order. The assessee is directed to furnish all information documents etc in support of his case sufficiency well in advance and is also directed to cooperate fully with Department. Order 5. The impugned order is set aside as and by way of remand back to the file of Ld. AO who shall pass a fresh order within 60 days from date of receipt of this order with assessee filing all material particulars with Ld. AO sufficiently well in advance. 6. In the result, appeal allowed for statistical purposes. Order pronounced in the open Court on 18/12/2024. Sd/- Sd/- कृणव᭠त सहाय परेश म. जोशी ( KRINWANT SAHAY) (PARESH M. JOSHI) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ / JUDICIAL MEMBER AG आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "