M/S. SHREE SANT GAJANAN NAGRI SAHKARI PATSAHTH, THANE V. DY COMMISSIONER OF INCOME TAX -2, KALYAN

ITA 1178/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9808 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 18-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Reason to believe; Set aside
• Section: 68; 148; 144; 142(1); 80P; 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 1178/Mum/2022 (A.Y: 2012-13) M/s. Shree Sant Gajanan Nagri Sahkari Patsahtha, Shop No. 8/Plot No. 48, Parshwnath Towers, Suryoday CHS Ltd, Near DNS Bank, Ambernath, Thane -421501. Maharashtra. Vs. DCIT-2, 2 nd Floor, Mohan Plaza, Wayle Nagar, Khadakpada, Kalyan West – 421 301. Maharashtra. PAN/GIR No. AAFTS9566E Appellant .. Respondent Appellant by : Shri Viraj Mehta.AR Respondent by : Shri. Tejinder Pal Singh.DR Date of Hearing 05.09.2022 Date of Pronouncement 06.09.2022 आदेश / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the CIT(A)-National Faceless Appeal Centre (NFAC), Delhi passed u/s 144 and 250 of the Act. The assessee has raised the following grounds of appeal: ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 2 - Legal: 1. Reopening under section 147/148 is bad in law The action of the Ld. A.O. in reopening the assessment of the Appellant by issuance of the notice under section 148 of the Act without recording valid and proper reasons to show that any income chargeable to tax has escaped assessment is erroneous. Hence, the notice under section 148 and subsequent assessment order passed under section 143 r.w.s. 147 is bad in law and the same may be quashed and set aside. 2. Sanction not obtained as per section 151 The action of the Ld. A.O. in reopening the assessment without following proper sanctions as per section 151 is erroneous. Hence, the notice under section 148 is bad in law and the same may be quashed and set aside as there is no proper sanction as per section 151. Merit 3. Unexplained Cash Credit u/s 68 of Rs. 51,46,423/ On facts and circumstances, Ld. CIT(A) has erred in confirming the addition made by Ld. AO u/s 68 on account of unexplained cash credit of Rs. 51,46,423/- and ought to be reversed. Such addition is bad in law and erroneous in facts and liable to be deleted. 4. Treating Inocme of Rs. 95,637/- as income from other sources and denying deduction u/s 80P On facts and circumstances, Ld. CIT(A) has erred in confirming the action of Ld. AO by treating income of Rs. 95,637/- under the head Income from Other Sources instead of Profit & Gains from Business or Profession and thereby disallowing deduction u/s 80P. Such action is bad in law and ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 3 - erroneous in facts and liable to be deleted and deduction u/s 80P ought to be allowed. 5. The Appellant craves leave to add, alter, rescind or amend any of theabove grounds of appeal. 2. The brief facts of the case that the assessee trust is engaged in a business of providing credit facilities to its members on interest. The assessee has filed the return of income for the A.Y 2012-13 on 11.04.2018 disclosing a total income of Rs. Nil, after claiming deduction u/s 80P of Rs. 95,367/-. The AO found that the assessee has disclosed a total receipts of Rs. 13,55,157/- and offered profit of 95,367/- and has same has claimed exemption u/s 80P of the Act. The Assessing Officer (A.O) found that as per AIR information and financial transactions statement the assessee has deposited cash aggregating to Rs. 65,01,580/- in the savings bank account maintained with Ambarnath Jai Hind Co-operative Bank during the F.Y.2011-12. The assessee has not filed the return of income, therefore the AO has reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act and further notice 143(2) and 142(1) of the Act were issued. Since there was no compliance ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 4 - the AO has applied the best judgment assessment u/s 144 of the Act. The AO has considered the information on record and found that the assessee has not explained the cash deposits in the bank account and the assessee has restricted the receipts of Rs. 13,55,157/- and therefore the difference of Rs. 51,46,423/- deposited in the bank account is treated as unexplained sources of income and made addition u/s 68 of the Act and denied deduction u/s 80P of the Act and assessed the total income of Rs. 52,42,060/- and passed the order u/s 144 r.w.s 147 of the Act dated 14.12.2019. 3. Aggrieved by the order the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) considered the grounds of appeal and findings of the AO, and the issued notice, since there was no compliance from the assessee, the CIT(A) has confirmed the action of the AO and dismissed the appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal. ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 5 - 4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer. The assessee has a good case on merits and shall substantiate with the material evidence and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. We find the Ld.CIT(A) has issued the notices of hearing referred at page 3 Para 4.1 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. We find that the assessee has raised grounds of appeal challenging the additions of the ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 6 - assessing officer and there could be various reasons for non appearance which cannot be overruled. We considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case before the CIT(A) along with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should cooperate in submitting the information for early disposal of the appeal and allow the grounds of appeal of the assessee for statistical purpose. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 06.09.2022 Sd/- Sd/- ( AMARJIT SINGH) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 06.09.2022 KRK, PS ITA No. 1178/Mum/2022 M/s Shree Sant Gajanan Nagri Sahkari Patsahth, Mumbai. - 7 - Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. Concerned CIT 5. DR, ITAT, Mumbai 6. Guard file. आदेशान ु सार/ BY ORDER, //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai