DINESH KUMAR SINGH,RAIGARH V. .INCOME TAX OFFICER WARD 1, RAIGARH, RAIGARH

ITA 427/RPR/2024

AI Insights

The case involves Dinesh Kumar Singh, the appellant, who contested the reopening of his income assessment for the year 2013-14 under sections 144/147 of the Income-tax Act, 1961. The reopening was based on information regarding unexplained cash deposits in his bank account, which were allegedly sourced from cash withdrawals from the same account. The Assessing Officer (AO) issued a notice under section 148, and upon the appellant's non-participation, proceeded to assess the income based on best judgment. The appellant's subsequent appeal to the ADDL/JCIT(A), Kanpur was dismissed for non-prosecution. The Tribunal found that the CIT(A) had erred in dismissing the appeal without considering the merits, leading to the setting aside of the CIT(A)'s order and a directive for a fresh assessment on merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35782 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Other Referred Cases: Lakhmani Mewaldas (1976) (SC), Meenakshi Overseas (P) Ltd (2017) (Del HC), Well Trans Logistics India (P) Ltd (2024) (Del HC), Kalpana Shantilal Haria (2017) (Bom), Kartik Sureshchandra Gandhi (2023) (Born), CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: S SUNIL KUMAR AGRAWAL; VIMAL KUMAR AGRAWAL
• Keywords: Set aside; Opportunity of being heard
• Section: 147; 148; 250; 246A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 427/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Dinesh Kumar Singh Sonumuda, Kali Mandir, Ward No.42, Raigarh (C.G.)-496 001 PAN: CQMPS5008L .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1, Raigarh (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : S/shri Sunil Kumar Agrawal & Vimal Kumar Agrawal, Cas Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 16.12.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 19.12.2024 2 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the ADDL/JCIT(A), Kanpur, dated 26.07.2024, which in turn arises from the order passed by the A.O under Sec.144/147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 24.11.2018 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: “Gr.No.1: \"On the facts and circumstances of the case and in law, reopening u/s148/147 is invalid; based on NMS information of cash deposits into saving bank of Rs.14,74,600, which is sourced from cash withdrawals of Rs.13,82,340 from such SB account; AO has not applied his mind independently on such information; it is only 'reason to suspect' for verifying the facts; there is no live link/ nexus between the NMS information of cash deposits & formation of believe for escaped income of Rs.14,74,600; in absence of this pre- requisite/ pre-condition for assuming jurisdiction u/s147, reopening u/s148/147 is invalid; liable to be quashed; relied on Lakhmani Mewaldas (1976) (SC); Meenakshi Overseas (P) Ltd (2017) (Del HC); Well Trans Logistics India (P) Ltd (2024) (Del HC).\" Gr.No.2: \"On the facts and circumstances of the case and in law, approval granted u/s151(2) by Jt.CIT dt.5-3-18 is invalid; Jt.CIT has not cared the mistake of AO in proposal form, i.e., wrong mentioning of provisions of law i.e., sec147(a) which had been omitted from the statute wef.1-4-89; without verifying/caring the fact that cash deposits of Rs.14,76,600 is made out of cash withdrawals of Rs.13,82,340 from such SB account; it is mechanical approval without application of mind; in absence of valid approval u/s151(2) by Jt.CIT as mandated by law u/s151; reopening u/s148/147 is invalid, 3 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 is liable to be quashed; relied on Kalpana Shantilal Haria (2017) (Bom); Kartik Sureshchandra Gandhi (2023) (Born).\" Gr.No.3: \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.14,74,600 on cash deposits into saving bank, which is sourced by cash withdrawals of Rs.13,82,340 from such SB account; it is unjustified & is liable to be deleted.\" Gr.No.4: \"The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing.\" 2. Succinctly stated, the A.O based on information that though the assessee had made cash deposits of Rs.14,74,600/- in his bank account with UCO Bank during the subject year, but had not filed his return of income, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act, dated 28.03.2018 was issued by the AO. 3. As the assessee failed to participate in the assessment proceedings, therefore, the A.O proceeded with and after making an addition of Rs.14,74,600/- framed the assessment to the best of his judgment u/ss. 144/147 of the Act, dated 24.11.2018. 4. Aggrieved, the assessee carried the matter in appeal before the ADDL/JCIT(A), Kanpur. As the assessee despite having been afforded four opportunities i.e. on 08.01.2021, 08.07.2024, 16.07.2024 and 24.07.2024 had failed to participate in the proceedings before the first appellate 4 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 authority, therefore, the latter finding no infirmity in the view taken by the A.O upheld the same, observing as under: “4. Details of appellate Proceedings: Notices u/s 250 of the Income Tax act 1961 was issued to the appellant to submit/upload documents and arguments in support of its grounds of appeals. The details of notices served are as under:- S. No. Notice issue date (through ITBA) Date of compliance Response of appellant. 1. 24.12.2020 08.01.2021 No written submission filed in support of grounds of appeal. No request of adjournment is made. 2. 01.07.2024 08.07.2024 3. 09.07.2024 16.07.2024 4. 18.07.2024 24.07.2024 It has been observed that the appellant has not responded to any of the notices mentioned above and has not participated in the appellate proceedings. Considering the non-responsive nature of the appellant another notice u/s 250 was issued to the appellant on 18.07.2024 requesting to submit or upload the documents in support of its grounds of appeal. However, no reply or submission has been received from the appellant on ITBA till date. 5. Decision: I, have carefully gone through the facts of the case and grounds of appeal submitted by the appellant. Moreover, all notices were duly served upon the appellant through email. The appellant opted not to respond to the above notices for the reason best known to him. No documents were produced before me on ITBA in support of his grounds of appeal or to rebut the assessment order despite being given sufficient opportunities. 5 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 In view of the above facts and circumstances, it is clear that the appellant is not interested in pursuing the present appeal on merits and therefore in absence of any evidence to rebut the assessment order, the assessment order is CONFIRMED and accordingly the appeal is dismissed. Hence, all grounds of appeal raised by the appellant are dismissed. 6. In result, the assessment order is CONFIRMED.” 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short ‘AR') for the assessee, at the threshold of hearing, submitted that the AO had in the “Form for recording the reasons for initiating proceedings under Section 148 and for obtaining the approval of the Joint Commissioner of Income tax”, had at Sr. No.7 made a mention of Sec. 147(a) of the Act, i.e a statutory provision which was no more available on the statute during the subject year. Elaborating further on his contention, the Ld. AR submitted that as both initiation of proceedings u/s 147 of the Act by the AO as well as grant of approval by the JCIT, Range-1, Bilaspur u/s 151 of the Act were based on misconceived facts an revealed an non-application of mind by the said authorities, therefore, the impugned assessment order passed u/ss. 6 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 144/147 of the Act, dated 24.11.2018 cannot be sustained and was liable to be quashed for want of valid assumption of jurisdiction. The Ld. AR in support of his aforesaid contention had relied on the judgment of the Hon’ble High Court of Bombay in the case of Smt. Kalpana Shantilal Haria Vs. ACIT, Circle-27(12), Navi Mumbai, Writ Petition (L) No.3063 of 2017. 8. Alternatively, the Ld. AR submitted that as the ADDL/JCIT(A), Kanpur had summarily disposed of the appeal without adverting to the issues which were raised before him, therefore, the matter in all fairness be restored to his file for fresh adjudication. 9. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 10. I have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. Ostensibly, it is a matter of fact borne from record that the assessee despite having been afforded four opportunities i.e. on 08.01.2021, 08.07.2024, 16.07.2024 and 24.07.2024 had failed to participate in the proceedings before the first appellate authority. Although, I would mince no words to deprecate the conduct of the assessee who despite having been afforded four opportunities to put up his case before the first appellate authority, had however chosen not to participate in the said proceedings, but at the same time, am unable approve the manner in which 7 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 the ADDL/JCIT(A), Kanpur had summarily dismissed the appeal. I find that there is no whisper in the order of the first appellate authority qua the merits of the case, i.e as to why the order passed by the A.O u/ss. 144/147 of the Act, dated 24.11.2018 was being approved by him. All that can be gathered from the order of the ADDL/JCIT(A), Kanpur is that as the assessee despite sufficient opportunity had failed to participate in the proceedings before him, therefore, it revealed that he was not interested in prosecuting the matter and rebut the view taken by the A.O. 11. As observed hereinabove, the ADDL/JCIT(A), Kanpur had disposed off the appeal for non-prosecution and had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. I am unable to persuade myself to accept the manner in which the appeal of the assessee has been disposed off by the ADDL/JCIT(A), Kanpur. In my considered view, once an appeal is preferred before the ADDL/JCIT(A), Kanpur, it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the ADDL/JCIT(A), Kanpur remained under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The 8 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble High Court had observed as under: \"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 9 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 12. I, thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the ADDL/JCIT(A), Kanpur for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say the ADDL/JCIT(A), Kanpur shall in the course of set aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at liberty to substantiate his claim on the basis of documentary evidence, if any. The grounds of appeal raised by the assessee are disposed off in terms of the aforesaid observations. 13. In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 19th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th December, 2024. **SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. 10 Dinesh Kumar Singh Vs. ITO, Ward-1, Raigarh ITA No. 427/RPR/2024 आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "