BANESAHIB LAL BASHA,TIRUVANNAMALAI V. .ITO, WARD 2, THIRUVANNAMALAI, THIRUVANNAMALI

ITA 2713/CHNY/2024

AI Insights

The case involves Shri Banesahib Lalbasha, a commission agent in selling vegetables, who appealed against an ex-parte order by the CIT(A) under section 250 of the Income Tax Act, 1961 for the Assessment Year 2017-18. The CIT(A) had dismissed the appeal in-limine due to non-prosecution as the assessee failed to respond to multiple notices. The assessee, represented by his advocate, argued that the non-response was due to the oversight of his GST consultant, who did not check the emails from the CIT(A). The main contention was regarding the addition of Rs.21,82,427 as unexplained cash credits under section 68 of the Act, which the assessee claimed was already taxed as part of his business income. The Tribunal found merit in the assessee's argument that the amount might be taxed twice if added again under section 68 and decided to restore the matter to the AO for a fresh examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36169 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: D.ANAND; POTHI MADHAVAN
• Keywords: Unexplained cash credit
• Section: 250

Judgement Text

"आयकर अपीलȣय अͬधकरण,‘सी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी जगदȣश, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2713/CHNY/2024 िनधाᭅरण वषᭅ/Assessment Year:2017-18 Shri Banesahib Lalbasha, No.49, Gandhi Market Arni, Tiruvannamalai District – 632 301. PAN: ABXPL 3090M Vs. The Income Tax Officer, Ward 2, Thiruvannamalai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri D. Anand, Advocate & Shri Pothi Madhavan, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Anitha, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 19.12.2024 घोषणा कᳱ तारीख/Date of Pronouncement : 20.12.2024 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal at the instance of the assessee is directed against CIT(A) - NFAC order dated 28.08.2024, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18. 2. At the very outset, we notice that the CIT(A) has passed an ex-parte order. The CIT(A) has not adjudicated the issues on - 2 - ITA No.2713/CHNY/2024 merits and has dismissed the appeal in-limine for non-prosecuting the case. The reasons for passing an ex-parte order was that assessee did not respond to five notices issued from the office of the First Appellate Authority to furnish his written submissions / documentary evidences in support of his contentions. 3. The ld.AR submitted that the assessee is a commission agent in selling vegetables. He was not conversant with checking e-mails and during the proceedings before the CIT(A) in Form 35, he had given the e-mail id of his GST consultant. It was submitted by the ld.AR, since the GST consultant did not take note of e-mail sent from the office of the First Appellate Authority, the proceedings before the CIT(A) was ex-parte. The ld.AR further submitted that the issue may be restored to the files of the AO. The learned AR submitted that assessee had committed the mistake in conceding before the AO for the addition of Rs.21,82,427/-. It was stated that cash deposits of Rs.21,82,427/- (which was conceded for addition) is out of assessee’s business of selling vegetables and has suffered tax. Therefore, taxing the entire amount of Rs.21,82,427/- u/s.68 of the Act would amount to taxation of the said sum twice. It was submitted that assessee had maintained books of accounts and the same was verified by the AO (refer para 3 at page 2 of the - 3 - ITA No.2713/CHNY/2024 assessment order). It was submitted that the officers of the Department shall not take advantage of the ignorance of the assessee and should assist the tax payer in a very reasonable way. In this context, the ld.AR relied on the Board Circular No.014(XL- 35) of 1955 dated 11.04.1955. 4. The ld.DR submitted that the assessee had conceded for addition of Rs.21,82,427/- as unexplained cash credits u/s.68 of the Act. Therefore, it was contended that there is no reason to raise the issue before the CIT(A) and before the ITAT. It was submitted that the appeal of the assessee may be dismissed. 5. We have heard rival submissions and perused the materials on record. The assessee, an individual is a commission agent in selling vegetables. The assessee is not very familiar with the operation of computers and in Form 35, he had given the GST consultant e-mail id. It is the claim of the assessee that the GST Consultant did not take note of the e-mail notices sent from the office of the CIT(A), consequently the proceedings before the CIT(A) was ex-parte. It is the claim of the assessee though the addition has been made by the AO on the concession of the assessee, the cash deposits are only out of the business of selling - 4 - ITA No.2713/CHNY/2024 vegetables. Admittedly, the assessee has maintained books of accounts and the same has been verified by the AO, which is evident from the assessment order at para 3. If the cash deposits are out of the business of the assessee, again adding the cash deposits as unexplained u/s.68 of the Act would lead to a situation, that the said amount would be taxed twice. In the interest of justice and equity, as a last opportunity, we are of the view that the matter needs to be examined afresh by the AO. Accordingly, the issue of addition of Rs.21,82,427/- made by the AO is being restored to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment in the matter. It is ordered accordingly. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th December, 2024 at Chennai. Sd/- Sd/- (जगदȣश) (JAGADISH) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चेÛनई/Chennai, Ǒदनांक/Dated, the 20th December, 2024 - 5 - ITA No.2713/CHNY/2024 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Chennai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. . "