BINAY KUMAR SINHA,NEAR SHRUTI MEDICAL V. ACIT, CIRCLE, DHANBAD

ITA 270/RAN/2023

AI Insights

The case involves Binay Kumar Sinha, the appellant, who contested the addition of Rs. 15 lakh as undisclosed income by the Income Tax Department for the Assessment Year 2017-18. The addition was based on large cash deposits in the appellant's bank account, which were not satisfactorily explained. The CIT(A) upheld the addition after the appellant failed to provide documentary evidence despite multiple notices. The tribunal found that there was a lack of proper communication and substantive hearing, leading to the decision to remand the case back to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 32631 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 18-12-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Search and seizure
• Section: 142(1); 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH,RANCHI Shri Partha Sarathi Chaudhury, Judicial Member Shri Prabhash Shankar, Accountant Member I.T.A. No.270/RAN/2023 Assessment Year: 2017-18 Binay Kumar Sinha, Near Shruti Medical, Steel Gate, Post- Saraidhela, Dhanbad - 828127 [PAN: ALDPS8511Q]….......................…...……………....Appellant vs. ACIT, Circle (1), Dhanbad.....…..........................…..…..... Respondent Appearances by: Assessee represented by : None Department represented by : P.K. Koley, Sr. DR Date of concluding the hearing : 03.10.2024 Date of pronouncing the order : 14.10.2024 ORDER Per Prabhash Shankar, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2017-18is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by the Learned Commissioner of Income Tax (Appeals) [in short 'the Ld. CIT(A)],National Faceless Appeal Centre (NFAC), Delhi, dated 07.11.2023 arising out of assessment order dated 25.11.2019, passed under Section144 of the Act. 2. At the time of hearing, none appeared on behalf of the assessee. The learned Sr. DR supported the orders of lower authorities. 3. Brief facts of the case are that the assessee is an individual and derives income from Business & Other Sources. The assessee has filed its return of income for the A.Y. 2017-18 on 31.03.2018 declaring a total income of Rs. 19,15,791/-. The case of the assessee was selected for limited scrutiny under Computer Assisted Selection of Cases (CASS) to verify large I.T.A. No.270/RAN/2023 Binay Kumar Sinha 2 cash deposits in the bank account during the year under consideration. A notice u/s 142(1) of the Act was issued to the assessee. It was found by the ld.AO that the assessee had deposited a sum of Rs 15 lakh in his bank account by way of cash. He concluded that the assessee failed to explain the sources thereof. Consequently, the amount was treated as undisclosed and added to the income. The ld.CIT(A)has also observed that no documentary evidence were filed even before him though multiple notices were issued by him. According to him, the contention that the impugned sum represented accumulated income of earlier years was not substantiated. The addition made was, therefore, upheld by him. 4. On the other hand, the assessee in the grounds of appeal has contented that he responded to each and every notice issued by the ld.CIT(A).Giving datewise details and references, he has alleged that the ld.CIT(A) has not bothered to see any of his replies. Further, the ld.AO also did not issue any show cause notice or final draft proposing such addition without giving adequate opportunity of hearing. 5. We have carefully considered all the relevant aspects of the case, non- compliance of the assessee and the conclusions drawn by the lower authorities. The assessee has contented that that its submissions made were not considered in proper perspective. It is apparent from the records that in the present case, no substantive hearing could take place on account of lack of proper communication between the assessee and the department. The respective contentions are contradictory. In such a situation, eventhough the assessee did not appear before us also, it is in the fitness of things to allow one last opportunity of hearing to the assessee to explain the matter before lower authorities in the interests of justice and fair play. We are adopting this approach consistently in all such cases as we find in quite a few cases that there is some degree of lack of proper communication wherever notices are sent through e-portal. Besides, we hold that as per the provisions of Section 250(6) of the 1961 Act, ld.CIT(A) is obligated to state points for determination in appeal before him, the decision thereon and the reasons for determination. He has no power to dismiss appeal of assessee I.T.A. No.270/RAN/2023 Binay Kumar Sinha 3 on account of non-prosecution and without deciding on the merits of the case. 5.1 During the hearing, the Bench proposed for restoration of the matter to the ld.CIT(A) for a de novo consideration. The Revenue did not vehemently oppose this plea. Thus, in the in the interest of justice, we deemed it appropriate to allow the appeal for statistical purposes, emphasizing the need for a thorough and compliant adjudication process. The ld. CIT(A) shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in the set aside remand proceedings for de novo adjudication of the appeal of the assessee filed before him. Needles to state that the assessee will comply with notices and any details sought by the appellate authority. 6. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 14/10/2024. Sd/- Sd/- [Partha Sarathi Chaudhury] [Prabhash Shankar] Judicial Member Accountant Member Dated:14.10.2024. AK, PS (on tour) Copy of the order forwarded to: 1. Binay Kumar Sinha 2.ACIT, Circle (1), Dhanbad 3. CIT(A)- 4. Pr.CIT-Dhanbad 5. CIT(DR) 6. Guard File I.T.A. No.270/RAN/2023 Binay Kumar Sinha 4 //True copy// BY ORDER, (Senior Private Secretary) (On Tour), ITAT, Ranchi "