Sri. Ramesha, Bangalore V. Income-Tax Officer, Ward-1(2)(3), Bangalore

ITA 101/BANG/2023

AI Insights

The case involves Shri Ramesha, who appealed against the order of the National Faceless Appeal Centre (NFAC), which had dismissed his earlier appeal due to non-response to notices. The primary contention was the unexplained cash deposit of Rs. 15,18,000 during the demonetisation period, which the AO treated as unexplained investment under Section 69A of the Income Tax Act, 1961. The Tribunal noted that the assessee did not receive the notices due to a change in the staff of his Tax Practitioner and thus did not have a fair opportunity to respond or present his case at earlier stages. The Tribunal's decision to allow the appeal for statistical purposes and remand the case back to the AO was influenced by the principles of natural justice and the need for a comprehensive examination of the assessee's explanations regarding the source of the cash deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115339 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 19-02-2023
• Other Referred Cases: Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 133(6); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU “C” “SMC” BENCH, BENGALURU Before Shri Laxmi Prasad Sahu, Accountant Member ITA No. 101/Bang/2023 (Assessment Year: 2017-18) Shri Ramesha No. 53, Aluru Post Dasanapua Hobli Bengaluru 562123 PAN – AQLPR9582M vs.The Income Tax Officer Ward - 1(2)(3) Bngaluru (Appellant) (Respondent) Assessee by:Shri Ravishankar S.V., Advocate Revenue by:Shri Ganesh R. Ghale, Standing Counsel Date of hearing: 20.03.2023 Date of pronouncement: 21.03.2023 O R D E R Per: Laxmi Prasad Sahu, A.M. This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide DIN and order No. ITBA/NFAC/S/250/2021-22/ 1037321812(1) dated 29.11.2021 on the following grounds of appeal: - “1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned Commissioner of Income-tax [Appeals]/National Faceless Appeal Centre [NFAC for short] is not justified in dismissing the appeal filed on the ground that there was no response by the appellant to the notices issued on various occasions and therefore, the appellant was not interested in pursuing the appeal under the facts and in the circumstances of the appellant's case. 2.1 The learned CIT[A] ought to have appreciated that the e-mail address provided in the e-filing portal and Form No.35 related to ITA No. 101/Bang/2023 Shri Ramesha 2 one of the staff of the appellant's Tax Practitioner, who had left the employment and hence, the appellant had not received any of the notices issued by the learned CIT[A] / NFAC and therefore, the impugned order has been passed without allowing sufficient and effective opportunity to the appellant as no physical notice was served upon the address of the appellant drawing reference to the non-compliance and hence, the impugned order passed deserves to be set-aside. 2.2 The learned CIT[A] ought to have appreciated that the appeal filed could not be dismissed for non-prosecution and had to decided on merits and therefore, the impugned order passed deserves to be set-aside. 3. The appellant denies himself liable to be assessed on a total income of Rs. 15,70,530/-against the returned income of Rs.52,530/- for the year under appeal, under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A]/NFAC is not justified in upholding the addition of Rs. 15,18,000/- as unexplained cash deposited in the bank account u/s.69A of the Act, rejecting the bonafide explanation tendered under the facts and in the circumstances of the appellant's case. 4.1 The addition made by the learned A.O. u/s.69A of the Act is opposed to law and facts of the appellant's case in as much as, the cash deposit made by the appellant was from out the earlier withdrawals of the funds and from out of the past savings of the appellant and thus, these cash deposits were made out of known and explainable sources of funds and hence, the addition made deserves to be deleted. 4.2 The learned CIT[A]/NFAC is not justified in upholding the tax imposed under the provisions of section 115BBE at the rate of 60% under the facts and in the circumstances of the appellant's case. 5. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-A and 234-B of the Act, which under the facts and in the circumstances of the appellant's case and the same deserves to be cancelled. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant ITA No. 101/Bang/2023 Shri Ramesha 3 may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.” 2.There is a delay of 380 days in filing the appeal by the assessee, as noted by the Registry. The actual delay in filing the appeal is 271 days as rest of the period of delay is covered by the judgement of the Hon'ble Supreme Court dated 28.02.2022. The assessee has filed an affidavit dated 20.02.2023 in which he has explained the delay in filing the appeal before the Tribunal and the reasons given in the affidavit are bonafide and properly explained by the assessee. Therefore, following the Supreme Court decision of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471 (SC), I am of the view that there was reasonable cause for the delay in filing the appeal and condone the delay. 3.The brief facts of the case are that the assessee filed return of income for AY 2017-18 on 07.09.2017 declaring total income of Rs.52,530/-. The case was selected for scrutiny under CASS for examination of “cash deposited during the year”. Statutory notices were issued to the assessee. During the course of assessment proceedings the Assessing Officer (AO) issued notice under Section 133(6) of the Income Tax Act, 1961 (the Act) to the Canara Bank, Chikkabidarakallu Branch where the assessee has maintained account no. 11991010006577 in which the assessee has deposited cash during demonetisation period of Rs.15,18,000/-. In this regard the assessee was asked to explain the source of cash deposits but the assessee failed to submit any response. Thereafter the AO treated the cash deposits as unexplained investment under Section 69A of the Act and tax liability was computed as per Section 115BBE of the Act and assessment was completed under Section 144 of the Act. 4.Aggrieved by the above order the assessee filed appeal before the CIT(A). The CIT(A) issued three notices but the assessee did not respond to ITA No. 101/Bang/2023 Shri Ramesha 4 any of the notice. Accordingly the appeal was decided against the assessee on the basis of the material available on record. 5.Aggrieved by the above order the assessee filed appeal before the Tribunal. The learned A.R. submitted that the assessee did not receive any information regarding the date of hearing fixed by the CIT(A) and he undertook that if one more chance is given to the assessee for representing his case he will produce all the necessary documents as required by the lower authorities. Therefore, he requested that the matter may be sent back to the AO for considering it afresh. 6.The learned D.R. opposed the request made by the ld A.R. and submitted that may opportunities were granted to the assessee by both the authorities for pursue the case but he did not avail the oppourtunities. 7.After considering the rival submission I noted from the material available on record that the assessee has income from house property and agricultural income. During the demonetisation period the assessee deposited cash of Rs.15,18,000/- in his Canara Bank, Chikkabidarakallu Branch in account no. 11991010006577 which was not explained by the assessee during the course of assessment proceedings as well as proceedings before the CIT(A). The CIT(A) has also decided the issue only on the basis of material available before him. Since the ld. AR of the assessee has undertaken that he shall be representing properly before the lower authorities, in the interest of justice and considering the prayer of the assessee I accept the prayer of the ld. AR of the assessee and restore the matter to the file of the AO for considering it afresh in the light of CBDT Circular dated 09.08.2019 in F.no.225/145/2019 ITA II. With this observation the appeal of the assessee is allowed for statistical purpose. ITA No. 101/Bang/2023 Shri Ramesha 5 8.In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21 st March, 2023. Sd/- (Laxmi Prasad Sahu) Accountant Member Bengaluru, Dated: 21 st March, 2023 Copy to: 1.The Appellant 2.The Respondent 3.The CIT(A) -NFAC, Delhi 4.The CIT - 5.The DR, ITAT, Bengaluru 6.Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.