BALA SUNDARI IRON AND CEMENT STORE,BADDI V. NATIONAL FACELESS ASSESSMENT CENTRE (ITO PARWANOO), PARWANOO

ITA 1073/CHANDI/2024

AI Insights

The case involves Bala Sundari Iron And Cement Store, a partnership firm, which appealed against the order of the CIT(A) confirming the addition of Rs. 14,45,000 as unexplained money under Section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer (AO) based on information from the Insight Portal regarding cash deposits and alleged mutual fund sales. The assessee contended that the deposits were from recorded cash sales and that necessary documents were submitted, which the AO and CIT(A) failed to consider. The Tribunal found that the matter had not been adjudicated after due consideration of the documents filed and thus set aside the CIT(A)'s order, restoring the matter to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360634 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Pioneer Motors Private Ltd. vs The municipal Council, Nagrecoil :AIR 1967 SC 684
• Laws Referred To: Section 147, Section 69A, Section 272A(1)(d), Section 148A(b)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: MANOJ KUMAR; C.A
• Keywords: Set aside; Opportunity of being heard; Invalid notice; Principle of natural justice
• Section: 147

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: PHYSICAL MODE BEFORE: SHRI. LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 1073 /Chd/2024 िनधाŊरण वषŊ / Assessment Year : 2018-19 Bala Sundari Iron And Cement Store Shop No. 1, Fauji Complex, Sai Road, Baddi, Himachal Pradesh बनाम The ITO Parwanoo ˕ायी लेखा सं./PAN NO: AAHFB0801D अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Manoj Kumar, C.A राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT सुनवाई की तारीख/Date of Hearing : 07/05/2025 उदघोषणा की तारीख/Date of Pronouncement : 19/05/2025 आदेश/Order PER LALIET KUMAR, J.M This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 29/07/2024 pertaining to Assessment Year 2018-19. 2. In the present appeal, Assessee has raised the following grounds: 1. The ld. CIT(A) is wrong in confirming the addition made by ld. A.O. on account of cash deposit of Rs. 14,45,000/- due to non-furnishing of reply to show-cause notice dated 28.02.2023 by recording wrong finding vide para 4.5 of its order . by stating that the appellant (assessee) has failed to furnish documentary evidences such as Cash book, bank statement etc., whereas assessee had duly submitted the documentary evidences such as cash book, bank statement etc before the ld. A.O. on dated 23.03.2023. Moreover, the assessee had also , filed the screenshot of income tax portal before the ld. CIT(A) as proof of submitting his reply before the ld. A.O. so action of ld. CIT(A) by giving wrong finding is bad-in-law and liable to be quashed. 2. Without prejudice to ground no. 1, the ld. CIT(A) is further wrong in confirming the addition made by ld. A.O. on account of cash deposit of Rs. 14,45,000/- due to non-furnishing of reply to show cause notice dated 28.02.2023, whereas, during the course of consequential penalty proceedings initiated u/s 272A(1)(d), the ld. A.O. himself admitted the fact that the 2 assessee had furnished its reply in response to the show cause notice and reply of the assessee is genuine, so penalty is dropped, hence action of ld. CIT(A) by giving wrong finding is bad-in-law and liable to be quashed. 3. The ld. CIT(A) is wrong in confirming the addition of Rs. 14,45,000/- made by ld. A.O. on account of non-furnishing of cash book and bank statement etc. by recording wrong finding vide para 4.6 of its order that the appellant did not file the same before the ld. A.O. till 23.03 .2023, whereas assessee had duly filed the reply along-with cash book, bank statement etc. before the ld. A.O. on dated 23.03.2023, which is part of record of faceless assessment proceedings. 4. The ld. CIT(A) is wrong in confirming the validity of reassessment order in pursuance of invalid notice issued u/s l48A(b) dated 19.03 .2022 to file response on or before 26.03.2022,.because after exclusion of terminal days i.e. issuance of notice (i.e. 19.03.2022) as well as compliance day (i.e.26.03.2022), time of 6 days was provided in the notice issued u/s l48A(b), which is less than the minimum statutory time of 7 days, so as per the judgment of Hon'ble SC in the case of Pioneer Motors Private Ltd. vs The municipal Council, Nagrecoil :AIR 1967 SC 684, the notice issued u/s l48A(b) is invalid in the eyes of law and liable to be quashed. 3. Brief facts of the case are that, the assessee, a partnership firm, filed its original return of income on 31.10.2018 declaring income of Rs.13,93,960/-. The assessment was reopened under Section 147 based on information from the Insight Portal regarding cash deposits of Rs.14,45,000 and alleged mutual fund sales of Rs.13,94,000. The AO made an addition of Rs.14,45,000 under Section 69A, treating the cash deposits as unexplained money. 4. The assessee contended that the cash deposits were from cash sales, duly recorded in the books and banked into an overdraft account. It also argued that it filed the cash book and OBC bank statements on 23.03.2023, prior to the passing of the order on 24.03.2023. However, the AO concluded that no satisfactory explanation or documentary evidence was furnished. 5. Against the order of the AO the assessee went in appeal before the Ld. CIT(A) who has since confirmed the addition, noting non-furnishing of the cash book and failure to establish nexus between cash sales and deposits. 6. Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal. 3 7. During the course of the hearing, the learned Counsel for the assessee submitted that the assessee had filed the cash book and bank statements on 23.03.2023; however, the learned Assessing Officer did not consider these documents. He further contended that the assessee was denied an adequate opportunity of being heard, amounting to a violation of the principles of natural justice. The learned Counsel also clarified that the OBC bank account was duly included in the audited accounts and that the source of the cash deposits was properly explained. Additionally, he referred to the penalty order under Section 272A(1)(d), which acknowledged that compliance had been made, thereby supporting the assessee’s stand. 8. Per contra, the Ld. DR relied on the orders of the lower authorities. 9. We have heard the rival contentions of the parties and perused the material available on the record. In the present case, the Assessing Officer, in the assessment order, has recorded that the assessee failed to file submissions and documentary evidence, such as the cash book, to substantiate the availability of the cash deposited in the bank account. However, our attention has been drawn to page 1 of the proceedings before the Faceless Assessing Officer, wherein the assessee’s reply to the show-cause notice, along with Annexures including the bank statement, was filed. 9.1 Contrary to this, in paragraphs 4.2.3 and 4.3 of the assessment order, the Assessing Officer has observed that the assessee did not comply with the notice or submit the requisite documents. The assessee reiterated the same explanation and furnished the same documents before the learned Commissioner of Income Tax (Appeals). However, the CIT(A) also failed to consider the material available on record and summarily confirmed the order passed by the Assessing Officer. 4 9.2 In view of the foregoing, we find merit in the plea of the assessee that the matter has not been adjudicated after due consideration of the documents filed. Accordingly, the impugned order is set aside, and the matter is restored to the file of the Assessing Officer for de novo adjudication. 9.3 The Assessing Officer shall pass a fresh assessment order after granting a reasonable opportunity of being heard to the assessee. The assessee is directed to extend full cooperation in the proceedings and to furnish all necessary documents, including those already filed, afresh, as may be required by the Assessing Officer. 9.5 The Assessing Officer is further directed to pass a well-reasoned and speaking order after duly considering all documents available on record and those filed in the course of remand proceedings, in accordance with law. 10. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 19/05/2025 Sd/- ( LALIET KUMAR) JUDICIAL MEMBER AG Date: 19/05/2025 आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "