BAHADUR SINGH,ZIRAKPUR PUNJAB V. COMMISSIONER OF INCOME TAX (APPEALS), INCOME TAX DEPARTMENT DELHI

ITA 577/CHANDI/2024

AI Insights

The case involves an appeal by Bahadur Singh against the order of the CIT(A)/NFAC, Delhi, which sustained the addition of Rs 7,61,50,040 under Section 69 of the Income Tax Act, 1961, for the Assessment Year 2013-14. The addition was initially made by the Assessing Officer based on unexplained cash and time deposits in the assessee's bank account. The ITAT noted procedural lapses in the assessment process, including the failure to consider the assessee's return of income and the lack of adequate opportunity for the assessee to respond, particularly during the pandemic. The ITAT decided to remit the case back to the AO for a thorough re-examination, ensuring that the assessee is given a fair chance to present his case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107809 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT SHARMA; VIRTUAL
• Assessee Lawyers: SPANDEEP SHARMA
• Keywords: Set aside; Reasonable cause; Unexplained investment; Capital Gains; Principle of natural justice; Source of fund
• Section: 147; 148; 142(1); 69

Judgement Text

"आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “ए” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य एवं ᮰ी परेश म. जोशी, ᭠याियक सद᭭य BEFORE: SHRI. VIKRAM SINGH YADAV, AM &SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ ITA NO. 577/Chd/2024 िनधाᭅरण वषᭅ / Assessment Year : 2013-14 Bahadur Singh House No. 477 Preet Colony Zirakpur Mohali, Punjab- 140603 बनाम The ITO Ward 5(5) Chandigarh ˕ायीलेखासं./PAN NO: CDVPS9706F अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Spandeep Sharma, Advocate राज᭭व कᳱ ओर से/ Revenue by : Shri Rohit Sharma, CIT, DR (Virtual) सुनवाई कᳱ तारीख/Date of Hearing : 09/12/2024 उदघोषणा कᳱ तारीख/Date of Pronouncement : 30/12/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 29/02/2024 pertaining to Assessment Year 2013-14 challenging the sustenance of addition of Rs 7,61,50,040/- under Section 69 of the Act made by the Assessing officer. 2. At the outset, it is noticed that there is a delay in filing the present appeal by 16 days. In this regard, the Ld. AR submitted that the assessee has filed a condonation petition wherein he has stated that he was suffering from old age, body ailments and inconsistent health and as a result, he could not contact his Counsel for timely filing of the present appeal and it was submitted that in the 2 interest of substantial justice, the delay may be condoned. The Ld. CIT/DR is heard who has not raised any specific objection. After hearing both the parties and considering the condonation application as well as the affidavit placed on record, we find that there was reasonable cause for the delayed filing of appeal and the delay is hereby condoned and the appeal of the assessee is admitted for adjudication. 3. Briefly, the facts of the case are that the assessment was completed under section 147 r.w.s 144 r.w.s 144B of the Act vide order dt. 22/03/2022 wherein the AO brought the tax a sum of Rs. 7,60,75,592/- under Section 69 of the Act and another amount of Rs. 74,450/- as income from other sources and assessed income was determined at Rs 7,61,50,040/-. The case of the assessee was re-opened basis information that the assessee has made cash deposit of Rs. 3,30,00,000/- and time deposit of Rs. 4,30,01,146/- in the bank account maintained with Punjab National Bank and has also received interest of Rs. 74,446/- and since the assessee did not file return of income, the case of the assessee was reopened holding that the income chargeable to tax has escaped assessment to the extent of Rs. 7,60,75,592/- within the meaning of Section 147 of the Act and thereafter notice under section 148 dt. 31/03/2021 was issued by the Jurisdictional AO. In response to the notice, the assessee filed its return of income on 23/02/2022. The case of the assessee was transferred to NFAC under faceless assessment scheme and notices under section 142(1) was issued followed by the reminder on 07/02/2022 and 16/02/2022 and thereafter, a final show cause along with draft assessment order was issued dt. 10/03/2022 proposing addition of Rs. 7,60,01,146/- and in absence of any compliance on the part of the assessee, the AO proceeded and completed the assessment under section 144 bringing to tax the cash as well as time deposit as unexplained investment under section 69 of the Act as well as interest income 3 under the head “income from other sources” and assessed income was determined at Rs 7,60,75,592/-. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) who has since sustained the findings of the AO and dismissed the appeal of the assessee on account of non-prosecution and against the said order, the assessee is in appeal before us. 5. During the course of hearing, the Ld. AR submitted that the assessee is a senior citizen aged above 68 years and is severe diabetic and high blood pressure patient. The assessee is not much educated or qualified and does not know about the law of Income Tax. It was submitted that the assessee received notice u/s 142 (1) of Income Tax Act 1961, issued by the Income Tax Officer ward 5(5), Chandigarh on 10/12/2021 for the impugned Assessment Year 2013-2014 and reply to notice was filed stating various sources of income and related documents were filed. The assessee had income from interest on FDRs and agriculture income, also sale of agriculture land has been reflected under the head “Long Term Capital Gains” in the return filed in response to notice u/s 148 of the I.T. Act on 23/02/2022 which has not been considered by the AO. 6. It was submitted that the assessee again received notice from Assistant Commissioner of Income Tax/ Income Tax Officer, National Faceless Centre Delhi during Corona Pandemic and the assessee was in the process of collating all documentation/records but the Assessing Officer without any consideration or awarding sufficient time and without proper investigation, made an addition of 7,61,50,040/-. It was submitted that the Assessing officer has computed the tax liability at Rs. 2,35,07,358/- and the interest charged is 4,98,35,476- making the tax equal to the income added which is illegal, arbitrary and against the principals of natural Justice. 4 7. It was submitted that the aggrieved assessee filed an appeal with the Learned Commissioner of Income Tax and prayed for the case to be remanded back to the Assessing Officer and to be given a final opportunity to file all documentation and evidences and complete the pleadings but the same fell on deaf ears. It was submitted that the ld Commissioner of Income Tax (Appeals) has not even gone through the pleadings of the assessee and without giving proper relief erroneously upheld the order of the Assessing Officer which in itself has been passed hastily and without proper investigation. 8. It was submitted that the assessee is in possession of sufficient evidence to prove the uncalled for behemoth addition made by the Assessing Officer and hereby seeks to be given one more opportunity and the case be remanded back to the Assessing Officer so that proper assessment can be made in the interest of justice and fair play. 9. The Ld. CIT/DR is heard who has relied on the order of the lower authorities. As far as prayer for remand as sought by the ld AR, the ld CIT/DR did not raise any specific objection where the matter is set aside to the file of the AO. 10. We have heard the rival contentions and purused the material available on record. We find that the proceedings were initiated through issuance of notice u/s 148 on 31/03/2021 and completed u/s 147 r/w 147 r/w 144B vide order dated 22/03/2022 and in the intervening period, the assessee did file his return of income on 23/02/2022 which find mention in the order so passed by the AO, the case of the assessee was thereafter transferred to NFAC wherein the assessee sought time to collate relevant documentation but NFAC proceeded and passed the assessment order basis initial information without taking cognizance 5 of the return of income and allowing further opportunity to the assessee and effectively, passed an ex-parte order and all these proceedings happened during the covid pandemic and national lockdown and there were apparent difficulties and challenges on both sides. Similarly, even during the appellate proceedings, there is no adjudication on merits of the case though the ld CIT(A) has talked about the return of income and computation of long term capital gains filed by the assessee. We therefore have a situation where there is no findings on merits of the case and keeping in view the principle of substantial justice where the assessee cannot be condemned without being heard, we believe that and as also submitted by both the parties, the matter deserve to be remitted to the file of the AO for fresh adjudication. In the result, the matter is set-aside to the file of the AO for fresh adjudication as per law after providing reasonable opportunity to the assessee. Needless to say, the assessee shall attend to the proceedings and submit necessary information/documentation as advised/called for and ensure in timely completion of the proceedings. 11. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/12/2024 Sd/- Sd/- परेश म. जोशी िवᮓम ᳲसह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) ᭠याियक सद᭭य / JUDICIAL MEMBER लेखा सद᭭य/ ACCOUNTANT 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. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "