INCOME TAX OFFICER, WARD -5, PANCHKULA, AAYAKAR BHAWAN, SECTOR-, PANCHKULA V. NAVDESH INFRATECH, PANCHKULA

ITA 124/CHANDI/2024

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A), which had partly allowed the appeal of the assessee, Navdesh Infratech, and deleted additions made by the Assessing Officer (AO) regarding unexplained income. The AO had treated certain amounts as unexplained income under Section 69A of the Income Tax Act, 1961, due to non-compliance and lack of sufficient evidence from the assessee. The CIT(A) accepted additional evidence during remand proceedings and found the explanations satisfactory, leading to the deletion of the additions. The revenue challenged this decision, arguing that the CIT(A) erred in not upholding the AO's findings, given the lack of compliance and the procedural lapses by the assessee. The Tribunal agreed with the revenue's stance, highlighting the need for a thorough examination of the evidence and proper adherence to procedural requirements.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107857 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-09-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 09-02-2024
• Other Referred Cases: CIT vs Orissa Corporation Pvt Ltd, CIT vs Jawahar Lal Oswal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Assessee Lawyers: DHRUV GOEL; ..; HOWEVER ASSESSEE FAILED
• Keywords: Set aside; Additional evidence; Onus to prove; Tax effect; Principle of natural justice; Source of fund; Non compliance
• Section: 144; 143(3); 142(1); 143(2); 250; 143(1); 68; 69; 69A; 246A

Judgement Text

"आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ,च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH‘B’ CHANDIGARH BEFORE: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER, आयकर अपील सं./ITA No. 124/CHD/2024 िनधाᭅरण वषᭅ /Assessment Year : 2018-19 Income Tax Officer, Ward- 5, Panchkula, Aayakar Bhawan, Sector, Panchkula बनाम VS Navdesh Infratech SCF No. 11, New Grain Market Sec. 20, Panchkula, 134117, Haryana ᭭थायीलेखासं./PAN /TAN No: AAOFN9989K अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Dhruv Goel, C. A. राज᭭व कᳱ ओर से/Revenue by : Smt. Kusum Bansal, CIT-DR तारीख/Date of Hearing : 04.09.2024 उदघोषणा कᳱ तारीख/Date of Pronouncement : 29.10.2024 PHYSICAL HEARING आदेश/ORDER PER PARESH M. JOSHI, JM This is an appeal filed by the revenue under Section 253 of the Income Tax Act, 1961 before this Tribunal as and by way of second appeal under the Income Tax Act, 1961. The relevant Assessment Year is AY 2018-19. The corresponding previous year period is from 01.04.2017 to 31.03.2018. The Revenue is aggrieved by order bearing No. ITBA/NFAC/S/250/2023-24/1058998764(1) ITA 124/CHD/2024 A.Y. 2018-19 2 dated 22.12.2023 which is hereinafter referred to as the “Impugned order” passed in the first appeal under Section 250 of the Income Tax Act, 1961. Factual Matrix 2. The assessee is a Firm. The assessee filed the original return of the Income [RoI] on 24.07.2018 for ASSESSMENT YEAR 2018-19 and had declared total income NIL. 3. The return of Income was processed u/s 143(1) of the Act and the case was selected for complete scrutiny in CASS and notice u/s 143(2) dated 22.09.2019 was issued to the Assessee for the verification of: (1) Investments/Advances/loans (2) Share capital/other capital 4. That the case of the assessee was transferred to faceless Assessment Scheme 2019 and that the assessee was informed about the same by letter dated 15.10.2020. 5. That the notice u/s 142(1) dated 14.12.2020 was issued to the assessee calling for certain details which was required to be replied to by the assessee by 29.12.2020, however assessee failed to do so. ITA 124/CHD/2024 A.Y. 2018-19 3 6. That due to the non-compliance of the notice dated 14.12.2020, the assessee was reminded to file submission for the notice u/s 142(1) on 12.01.2021, 20.01.2021, 25.01.2021 and 15.03.2021. However the assessee has not replied the same even after providing so many opportunities. 7. Upon verification of ITR for AY 2018-19 it is noticed that assessee have reported Partner’s/Member’s Capital Fund Rs.5,01,8,500/- and unsecured loan of Rs.9,70,1300/-. Moreover as per return of income, there is no revenue generation during the year under consideration. 8. The assessee has shown Rs.9,58,546/- as other current assets and Rs.14,62,3000/- as loans and advances. 9. It was assessee’s first return of income. 10. That under notice u/s 142(1) dated 14.12.2020 at question no. 5, the assessee was specifically asked to provide the name, Pan, address, ledgers, confirmation and other related details. The assessee was reminded multiple times by other notice(s) supra to submit reply, but no reply was submitted by the assessee. 11. It is required to be noted and appreciated that onus is on the assessee to prove identify, genuineness and creditworthiness of the lender. But the assessee has failed to discharge this burden ITA 124/CHD/2024 A.Y. 2018-19 4 of proof despite opportunities after opportunities for reasons best known to them. 12. That the source of unsecured loan amounting to Rs.9,70,13000/- as appearing the assessee’s return of income, remains/remained unverifiable/unverified. 13. That under notice u/s 142(1) dated 14.12.2020 at question no. 7, the assessee was also specifically asked to provide the ledger of partners, source of funds with evidences and last three years balance sheet including the ITR’s of the partners’s by whom capital was introduced in the assessee’s firm. That on this score too, the assessee firm was reminded multiple time to submit reply, but not reply was ever submitted by the assessee firm for reasons best known to them. In this regard, it is also required to be noted and appreciated that the onus to prove/burden of proof is on the assessee firm to prove and discharge onus with regard to “sources”of the capital introduced in the Entity. But even on this count- the assessee failed to discharge the burden of proof or onus, for the reasons best known to them. The source of capital introduced by partner or partners amounting to Rs.5,01,08,500/- as per return of income remains/remained unverifiable/unverified. 14. That a Show Cause Notice dated 12.04.2021 was issued to the assessee’s firm to provide to the assessee’s firm a final ITA 124/CHD/2024 A.Y. 2018-19 5 opportunities in view of principles of natural justice, the contents of which are reproduced below:- \"As you are aware that your case was selected for scrutiny under CASS and notice u/s 143(2) dated 22.09.2019 was issued to you for the verification of following issues: 1. Investments/Advances/Loans ii. Share Capital/Other Capital. 2. The notice u/s. 142(1) dated 14.12.2020, issued to you calling for certain details which was required to be replied by you by 29.12.2020, however you failed to do so. Due to non compliance of notice dated 14.12.2020, you were reminded to file submission for the notice u/s 142(1) on 12.01.2021. 20.01.2021, 25.01.2021 & 15.03.2021. However you have not replied the same till date, even after providing so many opportunities. 3. On verification of ITR for the A.Y. 2018-19 it is noticed that you have reported partners/members' capital fund Rs. 5,01,08,500/- and unsecured loan of Rs. 9,70,13,000/-. Moreover as per return of the income, there is no revenue generation during the year. You have shown Rs. 9,58,546/- as other current assets and Rs. 14,62,30, 000/- as Loan and Advances. It is important to mention here that this is your first return of income. 4. In the notice u/s 142(1) dated 14.12.2020 at question no-5, you are specifically asked to provide the name, PAN, address, ledger, confirmation and other related details. You have reminded multiple time, as stated in para 2 above, to submit your reply, but no reply submitted by you till date. Onus is on assessee to prove identity, genuineness and creditworthiness of the lender. But you failed to serve to the onus, put on you. Under the circumstances and as per the reasons mentioned above, source of the unsecured loan amounting to Rs. 9,70,13,000/-, as appearing in your return of income, remains unverified and hence same is treated unexplained money u/s 69A of the IT act. You are requested to show cause why not the amount of Rs. 14,71,21,500/- may be treated as unexplained money u/s 69A of the IT act and added to income returned by you. 5. In the notice u/s 142(1) dated 14.12.2020 at question no-7, you are specifically asked to provide the ledger of partners, sources of funds, with evidences and last three years balance sheet and ITRs of the partners by whom capital is introduced in the firm. You have reminded multiple time, as stated in para 2 above, to submit your reply, but no reply submitted by you till date. Onus is on assessee to prove source of the capital introduced in the entity. But you failed to serve to the onus, put on you. Under the circumstances and as per the reasons ITA 124/CHD/2024 A.Y. 2018-19 6 mentioned above, source of the capital introduced by the partner or partners amounting to Rs. 5,01,08,500/-, as appearing in return of income, remains unverified and hence same is treated unexplained money u/s 69A of the IT act. You are requested to show cause why not the amount of Rs. 5,01,08,500/- may be treated as unexplained money u/s 69A of the IT act and added to income returned by you. 6. You are required to furnish your submission/explanation within three days of receipt of notice. Please note that if nothing is submitted from your side within the stipulated time, it shall be presumed that you have nothing to say in the matter and accordingly the assessment will be finalized after considering the information available on the record.” 15. That assessee firm even failed to submit reply with regard to the above Show Cause Notice dated 12.04.2021 within the stipulated time provided for. 16. That in ultimate analysis keeping the aforesaid book ground the assessee’s firm miserably failed to reply above notice(s) both u/s 143(3) and 142(1) (supra), failed to provide any reason and failed also to given any justification for not treating the amount of Rs.9,70,13,000/- and Rs.5,01,08,500/- appearing as unsecured loans and partner’s fund respectively in return of income, to treat the same as unexplained income as per section 69A of the Income Tax Act, 1961. 17. That in the premises as set out hereinabove the ld. AO was left with no other option but to carry out the assessment in an ex- parte manner and followed section 144 r.w.s. 144B of the I. T. Act, 1961 by considering all the information available on record. The ld. AO after considering all the facts of the case (supra) and ITA 124/CHD/2024 A.Y. 2018-19 7 basic information available on record treated the amounts of Rs.9,70,13,000/- as unsecured loans not explained at all by assessee’s firm as unexplained income under Section 69A r.w.s. 115BBE of the Act (supra) and so also the amount of Rs.5,01,08,500/- as unexplained partner’s fund not explained at all by the assessee’s firm as unexplained income under Section 69A r.w.s. 115BBE of the Act. Total income assessed under Section 144 r.w.s. 144B worked out to Rs.14,71,21,500/-. 18. That the aforesaid Assessment Order under Section 144 r.w.s. 144B bears No. ITBA/ASR/S/144/2021-22/1032528268(1) and is dated 19.04.2021. Proceedings before CIT(A) 19. That assessee being aggrieved by the aforesaid Assessment Order dated 19.04.2021 prefers first appeal before ld. CIT(A) in terms of section 246A of the Income Tax Act, 1961 and in Form No. 35 which is form of appeal to the CIT(A) interalia raises following grounds of appeal against the aforesaid Assessment Order dated 19.04.2021 which are enumerated as below: “1. That learned AO has erred in law and on facts in completing the assessment ex- parte u/s 144 r.w. section 144B of the Act. 2. That learned AO has erred in law and on facts in completing the assessment u/s 144 r.w. section 144B without service of notice u/s 143(2). ITA 124/CHD/2024 A.Y. 2018-19 8 3. That learned AO has erred in law and on facts in completing the assessment u/s 144 r.w. section 144B without service of notice u/s 143(2). 4. That learned AO has erred in law and on facts in completing the assessment u/s 144 r.w. section 144B without service of show cause notice mandated u/s 144B. 5. That learned AO has erred in law and on facts in assessing capital balance as of 31.3.2018 amounting Rs.5,01,08,500/- as unexplained money u/s 69A r.w. section 115BBE. 6. Erred in law and on facts that ld. AO has in assessing unsecured loans of Rs.9,70,13,000/- as unexplained money u/s 69A r.w.s 115BBE. 7. That the ld. AO has erred in law and on facts in applying an effective tax rate of 77.5 per cent (60 pc tax +25 pc surcharge +3 pc education cess) on the addition of Rs.14,71,21,500/- u/s 115BBE.” 20. The ld. CIT(A) in the impugned order has held as under: “5.1 I have considered the facts of the case and material available on record. The issue is being examined on merit. The appellant is a firm who filed their first ever return of income dated 24.07.2018 and declared total income as Nil. The case was selected for complete scrutiny under CASS to verify the genuineness of the partner's capital and unsecured loans. The appellant failed to comply with any of notices issued by the assessing officer and the assessment was completed on ex-parte basis by NFAC Delhi wherein entire capital and unsecured loan totaling to Rs. 14,71,21,500/- were treated as unexplained and were added to appellant income u/s 69 of the Act. In the ITR the appellant reported partner's capital fund of Rs.5,01,08,500/- and unsecured loan of Rs 9,70,13,000/-. The appellant has shown 9,58,546/- as other current asset and 14,62,30,000/- as loan and advances. Source of the capital introduced by the partner amounting to Rs.5,01,08,500/- and unsecured loan of Rs.9,70,13,000/- has not been provided by the appellant to the Assessing Officer and the same has been treated as unexplained income as per 69A of the income tax Act. Aggrieved with the addition, the assessee filed the present appeal. All the grounds are being dealt together. 5.2 The appellant also filed additional ground and evidence u/s 46A of the Act. which are accepted. The same along with all the submission were sent to Assessing Officer for remand on 17.07.2023. Remand report was received on 06.11.2023 and was shared with the ITA 124/CHD/2024 A.Y. 2018-19 9 appellant. The appellant submitted their rejoinder on 01.12.2023. A video conferencing were requested by the appellant on 01.12.2023. the same was conducted on 21.12.2023. 5.3 Ground No.1 to 4 are general in nature and need no separate adjudication. Appellant has submitted his objection by stating that the Ld. A.O erred in law and on fact in completing the assessment ex- parte u/s 144 r. w. section 144B of the Act and that the assessment was completed without service of notices u/s 142(1) and 143(2). This contention is not acceptable as it is evident from the assessment records available on ITBA that various notices as per the above table were served upon the assessee which remain uncompiled with. However the appellant in VC has contended that the notices served through email/ portal are not visible on the e-portal of the department. Therefore the notices remained uncomplied with. The contention of the appellant not withstanding, It is seen that the Assessing Officer has sent notices on various dates. Therefore assessment is as per due procedure of law. Hence this ground of appeal is dismissed. 5.4 I have pursued the assessment order of the A.O. and the explanation given by him for adding the amount of Rs.5,01,00,000/- in the total income of the appellant u/s 68 of the I.T Act 1961. The firm had 2 partners: Vishnu Parkash Goyal and Navraj Mittal and both had duly filed their ITRs for AY 2018-19 and entire capital was contributed via regular banking channels (Rs 4.6cr Vishnu Goyal and Rs. 41,08,500/- Navraj Mittal). In support of source of partners for contributing the capital, detailed confirmations, bank statements and supporting documents were filed before this office and examined by AO under remand proceedings. The appellant has submitted comprehensive documents from sale deeds, receipts from sale of properties, bank statements, OD advanced against FDR's, balance sheet, capital statement and ITR of each of the sources which were duly shared with the Assessing Officer. The Assessing Officer not done any inquiry or examined any of the evidences. All the payments are duly accounted for with respect to their source and those find mention in the detailed paper book filed by the appellant. The Assessing Officer contention is not accepted since its not based on any examination of evidence wherein the appellant has submitted complete documents establishing the source of deposit. Hence this ground of appeal is allowed. 5.6 The appellant were received of Rs. 9,70,13,000/- from various persons and in support of the same, detailed confirmations from the lenders alongwith explanation of sources, their ITRs and Bank statements were produced before this office. Despite having significant time of 5 months at hand and having all contact details and PAN numbers of all parties involved, AO has chosen to not conduct any independent enquiry from any of the ITA 124/CHD/2024 A.Y. 2018-19 10 parties. In fact, not even assessee or its partners were called upon to provide any further clarifications during remand proceedings, Similar approach was taken by AO in assessment proceedings also whereby AO relied on assessee's non response and did not conduct any enquiry before making additions. In such a factual position, the capital and unsecured loans cannot be upheld to be unexplained income as assessee had discharged its onus of proving the genuineness, creditworthiness and identity of the receipts while no verification was done by AO. Reliance is placed on Supreme Court decision in case of CIT vs Orissa Corporation Pvt Ltd, (1986) 159 ITR 0078 where it was held that when AO did not make any enquiry from the creditors despite their details being produced by assessee, no additions could be made. Reliance is also placed on decision of Honble Jurisdictional High Court (Punjab & Haryana) in case of CIT vs Jawahar Lal Oswal [2016] 382 ITR 453 where it was held that once assessee had produced evidences to prove the source of the credits, onus shifted on AO to reject the same only by way of further evidences. Additions under deeming provisions could not be made solely on suspicions and doubts when assessee produced sufficient evidences. No effort has been made at end of the AO to either collect any incriminating material or to conduct any independent enquiry either in assessment or in remand proceedings. The objections made by AO are only of nature of suspicions which cannot be made basis of additions in income tax proceedings. Hence this ground of appeal is allowed. 6.1 In view of arguments given above, it difficult to sustain with the additions made by Assessing Officer. 6.2 In view of these facts, I am of the opinion that the addition made by the AO of Rs.4,60,00,000/- and Rs.9,70,13,000/- to the total income of the appellant is uncalled for and therefore deleted. These grounds of appeals are allowed. 7. In the result the appeal is partly allowed.” 21. The revenue being aggrieved by the impugned order in Form 36 which is form of appeal to this Tribunal has raised the following grounds of appeal before us:- “1. Whether on the facts and in the circumstances of the case, the Ld CIT(A) is right in law in holding that the identity, creditworthiness and genuineness of the creditors and other ITA 124/CHD/2024 A.Y. 2018-19 11 parties who have advanced unsecured loans of Rs 9,70,13,000/- to the assessee is well established? Tax effect- 10,26,71,269/- 2. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred to allow the appeal of the assessee and delete the additions of Rs 9,70,13,000/-made u/s 69A of the Income Tax Act, 1961 when the creditworthiness of the parties who have extended these unsecured loans is not well established. 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is right in law in holding that the identity, creditworthiness and genuineness of the entities from whom the assessee has sourced Rs 5,01,08,500/- as partner's funds is well established? 5,30,31071/- 4. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred to allow the appeal of the assessee and delete the additions of Rs 5,01,08,500/- made u/s 69A of the Income Tax Act, 1961 when the creditworthiness of the parties from whom the assessee has sourced Rs 5,01,08,500/- as partner's funds is not well established? 5. It is prayed that the order of the Ld. CIT(A) be set- aside and that of the A.O. be restored.” Total Tax Effect Rs. 15,57,02,340/- Record of Hearing 22. The hearing in the matter took place before us on 04.09.2024 when ld. DR contended before us that it is an admitted position that assessee has shown total non-compliance in the original assessment proceedings invited our attention to para 5.3 of the order of ld. CIT(A) which we reproduce once again for sake of convenience and ease. ITA 124/CHD/2024 A.Y. 2018-19 12 “5.3 Ground No.1 to 4 are general in nature and need no separate adjudication. Appellant has submitted his objection by stating that the Ld. A.O erred in law and on fact in completing the assessment ex- parte u/s 144 r. w. section 144B of the Act and that the assessment was completed without service of notices u/s 142(1) and 143(2). This contention is not acceptable as it is evident from the assessment records available on ITBA that various notices as per the above table were served upon the assessee which remain uncompiled with. However the appellant in VC has contended that the notices served through email/ portal are not visible on the e-portal of the department. Therefore the notices remained uncomplied with. The contention of the appellant not-withstanding, It is seen that the Assessing Officer has sent notices on various dates. Therefore assessment is as per due procedure of law. Hence this ground of appeal is dismissed.” It was contended that once ld. CIT(A) has held that assessment is as per due procedure of law and has dismissed grounds of appeal 1 to 4 of the assessee, the ld. CIT(A) ought to have dismissed the appeal of the assessee and has wrongly partly allowed the assessee appeal further no counter appeal has been filed by the assessee nor anything is urged in respect of these grounds by the assessee’s firm anywhere in the pleadings and paper book/grounds of appeal before this Tribunal hence these findings have attained finality. Under these circumstances order of ld. CIT(A) should be set aside and order of ld. AO should be restored. The issue raised by revenue goes to the root of the matter herein. Hence their contention should be upheld. 22.1 It was next- contended by ld. DR that amount of Rs.5,01,08,500/- as partner’s capital partakes the character of unexplained money within the hearing of section 69A of the ITA 124/CHD/2024 A.Y. 2018-19 13 Income Tax Act, 1961 as nothing is explained with regard to it’s sources by the assessee’s firm despite opportunities after opportunities which action of ld. AO is even upheld by ld. CIT(A) (supra). The ld. CIT(A) erred in deleting the addition of aforesaid amount by having held: “The firm had 2 partners: Vishnu Parkash Goyal and Navraj Mittal and both had duly filed their ITRs for AY 2018-19 and entire capital was contributed via regular banking channels (Rs 4.6cr Vishnu Goyal and Rs. 41,08,500/- Navraj Mittal). In support of source of partners for contributing the capital, detailed confirmations, bank statements and supporting documents were filed before this office and examined by AO under remand proceedings. The appellant has submitted comprehensive documents from sale deeds, receipts from sale of properties, bank statements, OD advanced against FDR's, balance sheet, capital statement and ITR of each of the sources which were duly shared with the Assessing Officer. The Assessing Officer not done any inquiry or examined any of the evidences. All the payments are duly accounted for with respect to their source and those find mention in the detailed paper book filed by the appellant. The Assessing Officer contention is not accepted since its not based on any examination of evidence wherein the appellant has submitted complete documents establishing the source of deposit. Hence this ground of appeal is allowed. It is a wrong finding of fact as ld. AO has followed due process which fact is even admitted by ld. CIT(A)in para 5.3 (supra) and any failure, non enquiry, no examination cannot be attributed to the ld. AO. Merely because additional paper so filed by the assessee’s firm for the first in form of sale deeds, receipt from sale of properties, bank statements, and advanced against FDR’s, balance sheet, capital statements, ITR of each of sources which were simply shared with ld. AO in remand proceedings ipso ITA 124/CHD/2024 A.Y. 2018-19 14 facto and ld. AO has not examined the evidence by no stretch of imagination could lead to conclusion by way of an inference that amount of Rs.5,01,08,500/- is properly explained and it’s sources stand disclosed which are all legitimate. What is required in law is detailed and in depth inquiry, examination, verification of documents placed on record by the assessee firm which was so placed for the first time and mere non examination of it by conducting no inquiry and verification by ld. AO in remand proceeding cannot be lead to assumptions of fact that sources stands explained. It was then vehemently contended that the entire approach and course followed by ld. CIT(A) is unique as nothing prevented him/her to examine, conduct inquiry and due verification of material placed on record by assessee’s firm with regard to “sources” of aforesaid amount of Rs.5,01,08,500/-. Nothing prevented ld. CIT(A) to have called both the partner’s bank officials, examine details of confirmation, sale deeds, receipts of sale of properties etc. Nothing was done by ld. CIT(A) despite powers with him. Hence, deletion is wrong and should be set aside. 22.2 It was next contended by ld. DR that the assessee had received unsecured loan of Rs.9,71,13,000/- from various persons and in support of the same, detailed confirmations from lenders along with explanation of sources, their ITR’s and bank statements ITA 124/CHD/2024 A.Y. 2018-19 15 were produced before office of ld. CIT(A) despite furnishing these papers ld. AO in remand proceedings have not conducted any due diligence and verification of these papers so placed on record by assessee firm for the first time. The ld. CIT(A) therefore ought not to have held: “In such a factual position, the capital and unsecured loans cannot be upheld to be unexplained income as assessee had discharged its onus of proving the genuineness, creditworthiness and identity of the receipts while no verification was done by AO.” 22.3 Concluding the argument- ld. DR has finally contended that- ld. CIT(A)impugned order by default on part of ld. AO in remand proceedings to the materials so placed for the first time has deleted the addition of Rs.5,01,08,500/- and Rs. 9,70,13,000/- aggregating to Rs.14,71,21,500/-and such an exercise in law is not permissible as source of income/money must be established by due process of actual inquiries, verification, cross-verification, examination of both the persons as well as papers etc. It should be done logically and empirically. There is no role of default determination and/or adverse inference or inferences. The determination of amount/money should be on real time basis. 23. Per contra, ld. AR has supported the impugned order of ld. CIT(A) the ld. AR has placed on record a PB from pages 1 to 234 enclosing copy of written submissions before CIT(A), copy of paper book and documents filed before CIT(A), copy of ITA 124/CHD/2024 A.Y. 2018-19 16 application under 46A filed before CIT(A), copy of remand report filed by AO and copy of reply to remand report filed by assessee firm. We have perused the same, in all, carefully. Findings and conclusions 24. We now have to examine legality, validity and proprietary of impugned order in light of premises which has been drawn up (supra). We hold that in the impugned order ld. CIT(A) in para 5.3 by having held that-assessment is as per due procedure of law ought not to have set aside the impugned assessment order dated 19.04.2021. We hold that-provisions of section 142(1) and 143(2) are mandatory provisions of law and no one can escape this rigorous of law be it assessee or Dept. officials. These are not general provisions of law but are mandatory provisions of law. We therefore hold that it was but incumbent upon the assessee firm to have gone through rigorous of law as no one can escape especially at the original stage of the assessment that to when case is selected for complete scrutiny in CASS for verification of investments/Advances/loans and share capital/other capital. 24.1 We also hold that in guise of rule 46A a clever attempt has been made to escape this rigorous of law which is not permissible in law. We hold that rule 46A of Income Tax Rules deals with production of additional evidence before the CIT(A). It says expressly that-appellant shall not be entitled to produce before CIT(A) any evidence, whether ITA 124/CHD/2024 A.Y. 2018-19 17 oral or documentary other than evidence produced by him during the course of proceedings before the Assessing Officer except in the following circumstances namely: “(a) Where the [Assessing Officer] has refused to admit evidence which ought to have been admitted or; (b) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer]; or (c Where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any round of appeal ; or (d) Where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.” A bare and simple perusal of aforesaid means those evidence whether oral or documentary other than evidence produced by him during the course of proceedings before Assessing Officer. In the instant case nothing was produced before ld. AO as evidence in original assessment proceedings. The ld. CIT(A) ought to have also followed due process in this regard which has not happened which is contemplated under Rule 46A (1) (2) (3) & (4) of Income Tax Rules, 1962 which are statutorily framed under Income Tax Act, 1961. Admission of additional evidence is thus not an empty formality. We exercise restrain from further observing under rule 46A. 24.2 Be that as it may, we are of the considered view that the ld. CIT(A) ought not to have partly allowed the assessee’s firm appeal by deleting the amounts of Rs.5,01,08,500/- and Rs.9,70,13,000/- ITA 124/CHD/2024 A.Y. 2018-19 18 aggregating to Rs.14,71,21,500/- merely because in remand proceedings pursuant to additional evidence under Rule 46A he the ld. AO failed to carry out any inquiries, examination, verification etc. on material so placed, as we are of the considered view that nothing prevents the ld. CIT(A) to carry out such exercise all by himself as he has all the powers including coercive powers at his commands. Needless to state that the powers of ld. CIT(A) are co-terminus with that of ld. AO upon cumulative reading of all the provisions of the Income Tax Act and rules. The ld. CIT(A) ought not have found fault on part of ld. AO but ought to exercise his persuasive mind on ld. AO officially in order to meet his requirements in order to achieve the ends of justice. In result of blame culture; the income/money/amount has come to be deleted on other parameters/ considerations short of meritorious grounds. Income computation and its sources must be determined meritoriously and not by drawing adverse inferences. ORDER In result, we set aside the impugned order and remit back the matter back to the file of CIT(A) to pass an order afresh on denovo basis after making all due diligence, verification, checks, examination of persons/documents by himself or through ld. AO or both so that amounts (supra) sources are clearly examined in a meritorious way and not as and by way of default as disposal of ITA 124/CHD/2024 A.Y. 2018-19 19 appeal should be fair, logical, and meritorious. It should not be decided in a short-cut manner or in summary manner as is sought to be done. We hope and trust-assessee firm too would cooperate with Dept. in disposing off the appeal in meritorious way. We hope and trust that appeal would be decided as expeditiously as possible probably within six months from date of receipt of this order. 25. Revenue’s appeal is allowed as and by way of remand. 26. Appeal allowed for statistical purposes. Order pronounced as on 29.10.2024. Sd/- Sd/- (VIKRAM SINGH YADAV) (PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER “GP, Sr. PS” आदेशकᳱᮧितिलिपअᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकरआयुᲦ/ CIT 4. िवभागीयᮧितिनिध, आयकरअपीलीयआिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅफाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar "