DINESH SARAOGI,RAIPUR V. INCOME TAX OFFICER-1(1), RAIPUR (ERSTWHILE INCOME TAX OFFICER- 1(3), RAIPUR), RAIPUR

ITA 417/RPR/2024

AI Insights

The case involves Dinesh Saraogi, the appellant, who contested the orders of the Income Tax Officer-1(3), Raipur, and the Commissioner of Income Tax (Appeals), which included substantial additions to his declared income for the Assessment Year 2014-15. The primary issues revolved around the additions made under section 68 of the Income Tax Act, 1961, concerning an unsecured loan and its interest, and the dismissal of his appeal by the CIT(A) as withdrawn, mistakenly believing he had opted for the Vivad se Viswas Scheme. The Tribunal's decision to set aside the CIT(A)'s order and remand the case for a fresh examination was based on the incorrect application of the scheme to the appellant's case and the failure to consider his written submissions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 299025 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 12-09-2024
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: POOJA BAJAJ
• Keywords: Condonation of delay; Set aside; Unexplained cash credit; Bonafide belief; Bogus
• Section: 143(3); 250; 271(1)(c); 251; 68; 246A; 5(2)

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM (आयकर अपील सं. / ITA No: 417/RPR/2024) (िनधा[रण वष[ Assessment Year: 2014-15) Dinesh Saraogi, 27/253, Saraogi House, Jawahar Nagar, Raipur, C.G., 492001 V s Income Tax Officer-1(1), Aaykar Bhawan, Raipur (C.G.) PAN: AOSPS3092J (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Ms. Pooja Bajaj, CA राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 17.10.2024 घोषणा की तारीख/Date of Pronouncement : 21.10.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals), NFAC, Delhi, (in short “CIT(A)”), vide order dated 07.09.2022 u/s 250 of the Income Tax Act, 1961 (in short “The Act”), for the Assessment Year 2014-15, which in turn arises from the order of Income Tax Officer-1(3), Raipur, (in short “The AO”), u/s 143(3) of the Act, dated 23.12.2016. 2 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 2. The Grounds of appeal raised by the assessee are extracted as under: 1. Ld. CIT(A) erred in dismissing the appeal without appreciating facts of case properly. Ld. CIT(A) has passed order without considering the written submission filed by appellant. Order passed by Ld. CIT(A) is illegal and contrary to the facts on records. There was no withdrawal of appeal by assessee. 2. Ld. CIT(A) erred in confirming addition of Rs. 25,00,000/- made by AO, on account of unsecured loan received from one Smt. Saroj Devi Baid, invoking sec. 68. The addition made by AO and confirmed by Ld. CIT(A) is not justified. 3. Ld. CIT(A) erred in confirming addition on account of interest of Rs. 2,84,374/- paid on above loan. The addition of Rs. 2,84,374/-made by AO and confirmed by Ld. CIT(A) is otherwise also not justified as the expenditure was never claimed by the appellant as deduction. 4. The appellant reserves the right to amend, modify or add any of the grounds/s of appeal. 3. Concisely stated, the facts of the present case are that the scrutiny assessment of the assessee was completed u/s 143(3) on 23.12.2016, wherein income declared by the assessee at Rs. 6,68,770/- has been further enhanced with additions / disallowances to the tune of Rs. 2,26,12,803/-, consequently, the assessed income has been determined at Rs. 2,32,81,573/-. The bifurcation of the additions u/s 68 of the Act effected through the concluded assessment u/s 143(3) pertains to (i) addition on account of declining the assessee’s claim for long-term-capital-gain (LTCG), considering the same as generated though execution of bogus transactions amounting to Rs. 1,98,28,429/- and (ii) On 3 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur account of unexplained cash credit received in the form of unsecured loan a/w interest thereon to the tune of Rs. 27,84,374/-. 4. Aggrieved with aforesaid additions, assessee preferred an appeal before the Ld. CIT(A), wherein the appeal of the assessee has been dismissed as withdrawn, under the conviction that the assessee had opted for Direct Tax Vivad se Viswas Scheme (DTVSVS) introduced under Direct Tax Vivad se Viswas Act (DTVSVA) 2020. 5. Dissatisfied with the aforesaid order of Ld. CIT(A), the assessee has filed the present appeal before us for our consideration. 6. At the outset, it is pointed out by the registry that the appeal filed by the assessee is delayed by 676 days. When the Authorized Representative of the assessee, Ms. Pooja Bajaj, CA (in short “Ld. AR”) was confronted with such defect in the appeal, she come forth with the explanation supported with the application for condonation of delay along with affidavit of the assessee, which are extracted as under for the sake of appreciation of facts qua the delay involved. 4 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 5 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 6 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 7 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 8 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 9 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 10 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 7. Based on aforesaid submissions, Ld. AR argued that the reason for delayed in filing of appeal is mainly for the reasons beyond the control of assessee, that the notices were not sent on email ID mentioned in Form No. 35 by the assessee before the First Appellate Authority. In support of such contetion, she drew our attention to the Form No. 35 in appeal memo, the relevant portion is extracted as under: 8. On perusal of the aforesaid Form No. 35, it is transpired that the assessee has mentioned email ID as [e-mail] at the same time the question in the appeal memo that “whether notices/ communications may be sent on email?”, the assessee opted “NO”. FORM NO. 35 [See rule 45] Appeal to the Commissioner of Income-tax (Appeals) CIT(A) Acknowledgment Number 590027531120117 Personal Information First Name Middle Name Last Name or Name of Entity PAN TAN (if available) DINESH SARAOGI AOSPS3092J Flat/Door/Block No. Name of Premises/ Buildings/ Village Road/ Street/ Post Office 15/212, SARAOGI HOUSE Area/ Locality Town/ City/ District State Country JAWAHAR NAGAR Raipur CHHATISGARH India Pin Code Mobile No. STD/ISD Code-Phone No Email Address Whether notices/ communication may be sent on email? 492001 9425209949 - [e-mail] No 11 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 9. Ld. AR further clarified that the email were sent on a different email ID, i.e., [e-mail], whereas the email ID filled in Form 35 was [e-mail] . 10. Copies of the screen shot of e-filing portal and notices reflecting the email ID are placed before us. On the basis of such evidence, it is claimed by the Ld. AR that the information for passing of appellate order was came to the knowledge of assessee on 01.09.2024 only, when he enquired about status of appeal from his counsel. Alternatively, it is argued that the assessee was provided the option to choose mode of communication in Form No. 35, wherein the option for communication through email was selected in negative by stating “NO”, therefore, the assessee was under genuine and bonafide belief that even after implementation of faceless appeal scheme, the notices / order etc. would be received by him in physical form. It was the submission that there was no reason for the assessee to follow inbox of his email. Ld. AR further alleged that the written submission furnished by the assessee under the faceless regime before the Ld. CIT(A) on 21.05.2019 were also not considered by the Ld. CIT(A), while passing the order. Ld. AR further placed her reliance on various judicial pronouncements as referred (supra) in the application for condonation. It was also to the surprise 12 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur of the assessee that he had not opted for DTVSVS for the present appeal, but the appeal of assessee is disposed of treating the same as withdrawn. 11. Backed by such submission, it was the prayer by Ld. AR that the delay involved in the present case was on account of bonafide belief of the assessee to receive the communication in physical copy by post, there were no intentional lapses on the part of the assessee, therefore, the delay may kindly be condoned. 12. Contradicting the aforesaid submission on behalf of the assessee, Dr. Priyanka Patel, the Senior Departmental Representative (in short “Sr. DR”) on behalf of the revenue, submitted that the delay involved in present case for 676 days is an inordinate delay, therefore, such delay shall not be allowed to be condoned. Regarding the assessee’s submission qua the service of notice or any communication in physical mode, she argued that the procedure in new faceless regime do not allow the Ld. CIT(A) to serve any communication though physical mode, the only method available with them is to serve the communications on email, there for contention of the assessee to receive the same physically shall not be entertained. Though, on being queried regarding the justification of option provided to appellants to receive the communications though email or not in form 35, she was unable to respond with any plausible explanation. 13 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 13. We have considered the rival submissions, perused the material available on record and the orders of Ld. Revenue Authorities. In present case, while deliberating upon the assertions by the Ld. AR qua the delay involved in filing of the appeal, it is noted that there was an option in appeal memo in form no. 35 for filing of appeal before the first appellate authority, wherein the assessee is required to furnish an email ID, in this case the Email ID furnished by the assessee was [e-mail] (as evident from the copy of Form 35 submitted before us, relevant portion extracted supra). Further, the assessee has been provided with the option that “whether notices / communication may be sent on email?”, in present case to answer the said option the assessee filled / opted “NO”. The aforesaid two facts borne out from records are not disputed by either party. It is further brought to our knowledge by way of placing the copies of screen shot of the web portal of the Income Tax Department, extracted therefrom copies of notices / communications bearing reference ID 100031040998 & 100027104746 both dated nil, having attachments “Hearing Notice us 250_ 1030358387(1)_04022021.pdf” & “Hearing Notice us 250_ 1027160342(1)_27052020.pdf” respectively, such documents shows that the notices for hearing dated 04.02.2021 & 27.05.2020 were issued to the assessee, however in both the aforesaid notices the email ID mentioned was 14 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur [e-mail], which is not the email ID mentioned by the assessee in Form No. 35. 14. In view of aforesaid admitted facts of the present case, we find force in the contentions of the Ld. AR that there was bonafide and sufficient reasons for the assessee justifying the delay in filing of the appeal, as the communications were sent on a different email ID, than the email ID preferred by the assessee in form no. 35, moreover, the option for communications though email was opted with “NO”, assessee’s belief to receive the communication, other than through email as mandated in law cannot be brushed aside. We, therefore, are of the considered view that there was no intentional lapse or negligence on the part of assessee in the delay involved in filing of the present appeal, therefore, we allow the condonation of delay. 15. At the outset, Ld. AR placed before us the fact that the appeal of the assessee has been dismissed as withdrawn by the Ld. CIT(A), under the impression that the assessee had opted for DTVSV Scheme 2020, but factually this perception of the Ld CIT(A) was not the correct. To substantiate, our attention was drawn to the impugned order of Ld. CIT(A), wherein the observations while dismissing the appeal of assessee are as under: 15 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur During the course of appellate proceedings, the appellant opted for DTVSVA 2020 and has filed an application/form-l in this regard before the designated authority i.e. PCIT, Raipur on 27.12.2020. A certificate no. 222072390210121 (form5) dated 21.01.2021 has been issued by the PCIT, Raipur. The appellant has paid the amount toward the full and final settlement of the tax arrears as determined in the order and VSV order u/s 5(2) has been issued on 19.01.2022 by the designated authority. In view of the above and as per the mandate provided in the DTVSVA 2020, the appeal of the appellant is dismissed as withdrawn due to DTVSVA2020. 16. Ld. AR placed before us copy of another order passed by Ld. CIT(A) u/s 250 of the Act for the AY 2014-15 dated 14.12.2022, in the assessee’s own case qua the penalty order u/s 271(1)(C) dated 29.06.2017 for which the assessee had opted for DTVSV scheme, 2020 and the assessee had requested for withdrawal of appeal. Accordingly, the appeal filed before the first appellate authority was dismissed as withdrawn. Copy of the appellate order against the penalty u/s 271(1)(c) and request of assessee to withdrawal of appeal are placed before us, same are extracted as under: 16 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 17 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 18 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 19 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 17. After submitting the aforesaid documents, Ld. AR submitted that, it might be the case that, the Ld. CIT(A) had copied the information from order passed in assessee’s own case qua the penalty u/s 271(i)(c) (Appeal No. 1/10114/2017-18) dated 14.12.2022, in the order passed for disposal of quantum appeal (No. 1/12110/2016-17) on 07.09.2022, even the certificate number of form 5 (No. 222072390210121 dated 21.01.2021) issued in DTVSV scheme and other information are also extracted, with no distinction. It is further argued that the assessee had never opted for DTVSV scheme for the quantum appeal against the order of the Ld. AO u/s 143(3) dated 23.12.2016. The Ld. CIT(A) have incorrectly applied the request for withdrawal of appeal by the assessee qua the penalty appeal, while deciding the quantum appeal, such order of Ld. CIT(A), therefore, contains error and perversity, the same, thus, cannot be upheld. With the aforesaid submissions, it was the prayer that the order of Ld. CIT(A) has been passed without considering written submissions filed by the appellant, on the contrary there was no withdrawal of appeal by the assessee, but the appeal of assessee was dismissed as withdrawn, the order of Ld. CIT(A), therefore, is liable to be set aside. Alternatively, as there was no adjudication by the Ld. CIT(A) on the merits of the issues assailed before him, in all fairness, the matter may be restored back for fresh adjudication. 20 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 18. Ld. Sr. DR, also on perusal of the order of Ld. CIT(A) have fairly admitted that the contentions raised by the Ld. AR on behalf of the assessee appears good and logical, therefore, in the interest of justice, to consider the matter on merits, it may be set aside to the files of Ld. CIT(A) for fresh adjudication. 19. We have considered the rival submissions, perused the material available on record and orders of the authorities below. Admittedly, in present case, the order of Ld. CIT(A) found to be misconceived wherein the facts of another appeal of the assessee pertaining to penalty u/s 271(1)(c) are picked up and copied in the order passed against the quantum appeal of the assessee challenging the order of Ld. AO u/s 143(3). The assessee has opted for DTVSV scheme 2020 for the pending appeal towards the penalty, there was no evidence on record that the assessee had also opted for DTVSV scheme 2020 for his appeal against the order u/s 143(3), therefore, the inference drawn by Ld. CIT(A) that the assessee has opted for DTVSVA 2020 is misplaced, farfetched and a reading which is not in consonance with the facts on record. Such order of Ld. CIT(A) may be due to inadvertent error, but has no standing in the eyes of law, therefore, the same is liable to be set aside. Since there was no deliberation on the merits of issue, whereas the facts pertaining to the issues are available on the records, we find it appropriate to allow the request as fairly admitted by both the parties to 21 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur restore the matter back to the file of Ld. CIT(A) to adjudicate the same afresh on merits. 20. Our aforesaid view is fortified and supported with view enshrined in the judgment of Hon’ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) reported in [2016] 240 taxman 133, wherein Hon'ble Bombay High Court has held as under: “…………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 Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 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. Section 251(l)(a) and (b) 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-section (2) of Section 251 of the Act also makes it dear 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 Section 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, with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer 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 dear from the Section 251(l)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to at 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.” 22 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur 21. In back drop of aforesaid judicial pronouncement, a/w the facts, circumstances, and observations in the instant case, the issues raised in the present appeal of the assessee, without adverting to the merits of the same, restore back to the file of Ld. CIT(A) for de novo adjudication. Needless to say, the assessee shall be afforded with reasonable opportunities of being heard in the set aside appellate proceedings. 22. Resultantly, the present appeal of assessee is partly allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 21/10/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 21/10/2024 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant- Dinesh Saraogi 2. ŮȑथŎ / The Respondent- ITO-1(1), Raipur 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. 23 ITA No.417/RPR/2024 Dinesh Saraogi vs ITO-1(1), Raipur (erstwhile Income Tax Officer-1(3), Raipur आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur // स×याǒपत Ĥित True copy // "