DTC TRADING CO,LUDHIANA V. PARTNER, RISHI NAGAR LUDHIANA

ITA 1016/CHANDI/2024

AI Insights

The case involves DTC Trading Co., the Appellant, contesting the assessment order for the Assessment Year 2017-18, which included significant additions to their income based on unexplained cash deposits and credits. The Appellant argued that the CIT(A) had passed an order without adequate opportunity for the Assessee to present their case, primarily due to the medical issues of their counsel. The ITAT acknowledged the procedural lapses and remanded the case back to the AO for a fresh assessment, emphasizing the need for a fair hearing and proper consideration of the Assessee's submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669107 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Set aside; Reasonable cause; Unexplained cash credit; Bonafide belief; Principle of natural justice
• Section: 144; 143(3); 68

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी राजपाल यादव, उपाȯƗ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. RAJPAL YADAV, VP & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No.1016/Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2017-18 DTC Trading CO House No. 42-H, Sarabha Nagar, Ludhiana, Punjab -141001 बनाम The ITO Ward 1(1) Ludhiana, Punjab ˕ायी लेखा सं./PAN NO: AALFD8125E अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 19/05/2025 उदघोषणा की तारीख/Date of Pronouncement : 27/06/2025 आदेश/Order PER KRINWANT SAHAY, AM: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 31/07/2024 pertaining to Assessment Year 2017-18. 2. In the present appeal Assessee has raised the following grounds of appeal: “1.a) That the Ld. AO has erred in passing the assessment order u/s 144 r,w.s. 143(3) of the Act. 1.b) That the Ld. CIT(A) has erred in passing the order without giving sufficient/adequate opportunity to the assessee and the order having been passed without giving sufficient and adequate opportunity, the said order deserves to be set aside to the file of the Ld. CIT(A) in order to give adequate/reasonable opportunity to the assessee. 1.c) That no submissions could be filed before the CIT(A) since the assessee was prevented by sufficient and 2 reasonable cause in not been able to file the submissions and which is highly regretted. 2. That the Ld. CIT-(A) should have passed the order on merits and as such the order passed by the Ld. CIT-(A) deserves to be set aside. 3. That the addition by Assessing Officer and confirmed by CIT(A) of Rs. 1,22,50,000/-made on the basis of deposit of cash in their bank account without verifying the detail of sales made and cash withdrawn from bank accounts was against the law and as well as against the facts of the case and uncalled for hence liable to be delete. 4. That the Assessing Officer/CIT(A) was wrong by considering Rs.31,73,100/-as unexplained cash credits which is bad in the eyes of the law. 5. That the Ld. CIT (A) has erred in invoking the provisions of Section 69A r.w.s 115BBE of the Income Tax Act, in respect of the addition of Rs. 1,22,50,000/- and also on account of the addition on account of alleged unexplained cash credit u/s 68 r.w.s 115BBE amounting to Rs. 31,73,100/-. 6. Notwithstanding the above grounds of appeals, the Ld. AO has also erred in applying the provisions of section 115BBE of the Act on the amount of cash deposited in the bank account of the assessee before 15.12.2016 i.e. the 60% rate of tax + Surcharge + Cess is not applicable in the case of the assessee. 7. Notwithstanding the above grounds of appeals, the Ld. A0 has also erred in applying the provisions of section 115B8E of the Act on unexplained cash credits by applying 60% rate of tax + Surcharge + Cess in the case of the assessee. 8. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.” 3. It was argued by the Ld. Counsel for the Assessee that the return was filed declaring income of Rs. 7,83,350/- on 06.11.2017 which was processed u/s 143(1). Thereafter, notices u/s 3 143(2)/142(1) were issued and certain Partial compliances were made by the Counsel of the assessee, Adv. Ajay Pal Singh. It has been mentioned in the order in para 5, that part compliance was made before the AO. However, complete information could not be filed by the assessee before the AO and, thus, the AO passed the order u/s 144 by rejecting the books of accounts vide order, dated 30.12.2019. Certain additions on account of deposits in the different bank accounts of the assessee were made as unexplained money u/s 69A r.w. the provisions of the section 115BBE, amounting to Rs. 1,22,50,000/-. It was noticed by the AO that certain unsecured loans were there in the balance sheet of the assessee to the tune of Rs. 31,73,100/-, for which, no confirmation was filed so, it was also added. Finally, the income of the assessee, was assessed at Rs. 1,64,03,302/-. 4. Appeal was filed by the assessee before the CIT(A) through the same Adv. Ajay Pal Singh. It was argued by the Ld. Counsel that the e-mail.id on Form No. 35 was given of the assessee’s Adv. Ajay Pal Singh. Though, his staff sought adjournments on few dates as the said Advocate was suffering from depression/memory loss and was not attending the office on account of such depression/memory loss. 5. Further, it was brought to our notice by the Ld. Counsel that the assessee was solely dependent on his counsel for the Income tax proceedings. He was under a bonafide belief that everything is being taken care of. Thus, it was prayed that, since there was a bonafide reason on account of the counsel’s medical issue due to 4 which, the ex-parte order has been passed by the CIT(A). It was prayed that since the part information was filed before the AO, in the interest of justice and equity, request was made that the case may, please, be remanded back to the AO for fresh decision. 6. The Departmental Representative Pleaded that the decision be taken as per the merits of the case. 7. We have gone though the order of Assessing Office/ CIT(A) and also the arguments of Ld. Counsel and DR. The Ld. CIT(A) has passed an ex-parte order, since no compliance was made by the assessee or his counsel before CIT(A). We have also considered the submissions of the Ld. Counsel for the Assessee about the medical issue of the counsel of the assessee at the time of CIT(A) and AO. We are of this considered view that in order to give natural justice to the Assessee, the case should be remanded back to the AO. Thus, we remand the case to the AO for fresh adjudication after giving reasonable opportunity to the assessee and to which, the assessee shall cooperate. Thus, appeal is allowed for statistical purpose. 8. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/06/2025 Sd/- Sd/- राजपाल यादव क ृणवȶ सहाय (RAJPAL YADAV) (KRINWANT SAHAY) उपाȯƗ/VICE PRESIDENT लेखा सद˟/ ACCOUNTANT MEMBER AG 5 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 सहायक पंजीकार/ Assistant Registrar "