Manoj Kumar Khandelwal, Kolkata V. I.T.O.,Ward-31(1), Kolkata

ITA 1271/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2344 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-01-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N KHANDELWAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Peak credit; Set aside
• Section: 44AD; 250; 68; 148

Judgement Text

ITA NO. 1271/KOL/2019 ASSESSMENT YEAR: 2010-2011 MANOJ KUMAR KHANDELWAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 1271/KOL/2019 ASSESSMENT YEAR: 2010-2011 MANOJ KUMAR KHANDELWAL,............................ .........................APPELLANT 183/2, LENIN SARANI, 1 ST FLOOR, KOLKATA-700013 [PAN: AFJPK6697K] -VS.- INCOME TAX OFFICER,................................ ................................RESPONDENT WARD-31(1), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700071 APPEARANCES BY: SHRI P.N. KHANDELWAL, FCA, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, SR. D.R., FOR THE RESPON DEN T DATE OF CONCLUDING THE HEARING : FEBRUARY 20, 2020 DATE OF PRONOUNCING THE ORDER : MARCH 20, 2020 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKATA DAT ED 26.03.2019 PASSED EX-PARTE, WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 26.03.2011 DECLARING TOTAL INCOME OF RS.2,05,951/-. THE SAID R ETURN WAS INITIALLY PROCESSED BY THE ASSESSING OFFICER UNDER SECTION 14 3(1) OF THE ACT ON 31.07.2014. THE ASSESSMENT, HOWEVER, WAS SUBSEQUENT LY REOPENED BY THE ASSESSING OFFICER AND A NOTICE UNDER SECTION 148 WA S ISSUED BY HIM AFTER RECORDING THE REASONS. IN REPLY, A LETTER WAS FILED BY THE ASSESSEE STATING THEREIN THAT THE RETURN ORIGINALLY FILED BY HIM ON 26.03.2011 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE U NDER SECTION 148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS CALLED ITA NO. 1271/KOL/2019 ASSESSMENT YEAR: 2010-2011 MANOJ KUMAR KHANDELWAL 2 UPON BY THE ASSESSING OFFICER TO EXPLAIN THE CASH D EPOSITS OF RS.24,11,600/- AND CHEQUE DEPOSITS OF RS.26,59,877/ - FOUND TO BE MADE IN HIS BANK ACCOUNT MAINTAINED WITH PUNJAB NATIONAL BANK DURING THE YEAR UNDER CONSIDERATION, WHICH WERE NOT ACCOUNTED FOR. IN REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE SAID DEPOSITS RE PRESENTED SALE PROCEEDS OF COTTON WASTE SALES. IN THE ABSENCE OF A NY EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF BILLS ETC. TO SUPPORT A ND SUBSTANTIATE THE SAID EXPLANATION, THE ASSESSING OFFICER DID NOT ACCEPT T HE SAME. HE ISSUED A NOTICE REQUIRING THE ASSESSEE TO SHOW-CAUSE AS TO W HY PEAK CREDIT APPEARING IN HIS UNDISCLOSED BANK ACCOUNT SHOULD NO T BE TREATED AS UNEXPLAINED CASH CREDIT AND AN ADDITION TO THAT EXT ENT BE MADE UNDER SECTION 68. IN REPLY, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT HIS INCOME MAY BE ASSESSED BY APPLYING A NET PROFIT RAT E OF 8% TO THE TOTAL DEPOSITS MADE IN THE BANK ACCOUNT WITH PUNJAB NATIO NAL BANK BY TREATING THE SAME AS BUSINESS TURNOVER AS PER SECTION 44AD O F THE ACT. ALTERNATIVELY IT WAS ALSO SUBMITTED ON BEHALF OF TH E ASSESSEE THAT EVEN BY THE PEAK CREDIT FORMULA, THE ADDITION COULD NOT BE MADE EXCEEDING RS.5,00,000/-.KEEPING IN VIEW THIS SUBMISSION MADE ON BEHALF OF THE ASSESSEE, THE ASSESSING OFFICER TREATED THE PEAK CR EDIT OF RS.5,00,000/- APPEARING IN THE UNDISCLOSED BANK ACCOUNT OF THE AS SESSEE WITH PUNJAB NATIONAL BANK AS UNEXPLAINED CASH CREDIT AND AN ADD ITION TO THAT EXTENT WAS MADE BY HIM UNDER SECTION 68 TO THE TOTAL INCOM E OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/147 O F THE ACT VIDE AN ORDER DATED 26.12.2017. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147 OF THE ACT, AN APPEAL WAS PREFERRED BY T HE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE ADDITION OF RS .5,00,000/- MADE BY THE ASSESSING OFFICER TO HIS TOTAL INCOME UNDER SEC TION 68. THERE WAS, HOWEVER, NO SATISFACTORY COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTICES ISSUED BY THE LD. CIT(APPEALS) FIXING THE S AID APPEAL FOR HEARING FROM TIME TO TIME AND KEEPING IN VIEW THE SAME, THE LD. CIT(APPEALS) ITA NO. 1271/KOL/2019 ASSESSMENT YEAR: 2010-2011 MANOJ KUMAR KHANDELWAL 3 DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSEC UTION VIDE HIS APPELLATE ORDER DATED 26.03.2019 PASSED EX-PARTE. A GGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN SUPPORT O F THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL CHALLENGING T HE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PARTE DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION, THE LD. COUNSEL FOR T HE ASSESSEE HAS SUBMITTED THAT THE APPEAL OF THE ASSESESE WAS FIXED FOR HEARING BY THE LD. CIT(APPEALS) ON THREE DATES, I.E. 12.11.2018, 27.11 .2018 AND 25.03.2019. HE HAS SUBMITTED THAT THE ASSESSEE SOUGHT ADJOURNME NT OF THE HEARING FIXED ON 12.11.2018 AND 25.03.2019 BY FILING APPLIC ATIONS IN WRITING ON THE GROUND THAT HE WAS SICK AT THE RELEVANT TIME. H E HAS SUBMITTED THAT THE LD. CIT(APPEALS), HOWEVER, DID NOT GIVE ANY FUR THER OPPORTUNITY TO THE ASSESSEE AND PROCEEDED TO DISMISS THE APPEAL OF THE ASSESSEE FOR NON- PROSECUTION VIDE HIS IMPUGNED ORDER PASSED EX-PARTE . HE HAS CONTENDED THAT THE LD. CIT(APPEALS) THUS HAS NOT GIVEN PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD BEFORE D ISMISSING THE APPEAL FOR NON-PROSECUTION VIDE HIS IMPUGNED ORDER PASSED EX-PARTE AND THERE IS A CLEAR VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. KEEPING IN VIEW THIS SUBMISSION MADE BY THE LD. COUNSEL FOR THE ASSESESE IN THE LIGHT OF THE FACTS OF THE CASE AS EVIDENT FROM RECORD, I FIND ME RIT IN THIS CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE. EVEN TH E LD. D.R. HAS NOT RAISED ANY OBJECTION IN THIS REGARD. MOREOVER, THE LD. CIT (APPEALS) AS PER THE PROVISIONS OF SUB-SECTION (6) OF SECTION 250 WAS RE QUIRED TO DISPOSE OF THE APPEAL OF THE ASSESSEE VIDE AN ORDER IN WRITING STATING THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISION. IT IS OBSERVED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) DOES NOT COMPLY WITH THESE REQUIREMENTS. I, THEREFORE, C ONSIDER IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER ITA NO. 1271/KOL/2019 ASSESSMENT YEAR: 2010-2011 MANOJ KUMAR KHANDELWAL 4 PASSED BY THE LD. CIT(APPEALS) EX-PARTE DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION AND REMIT THE MATTER B ACK TO HIM FOR DISPOSING OF THE APPEAL OF THE ASSESSEE AFRESH ON M ERIT IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS UNDERTAKEN BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANCE BEFORE THE LD. CIT(APPEAL S) AND SHALL EXTEND ALL THE POSSIBLE COOPERATION IN ORDER TO ENABLE THE LD. CIT(APPEALS) TO DISPOSE OF THE APPEAL AFRESH EXPEDITIOUSLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 20, 202 0. SD/- (P.M. JAGTAP) VICE-PR ESIDENT) KOLKATA, THE 20 TH DAY OF MARCH, 2020 COPIES TO : (1) SHRI MANOJ KUMAR KHANDELWAL, 183/2, LENIN SARANI, 1 ST FLOOR, KOLKATA-700013 (2) INCOME TAX OFFICER, WARD-31(1), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700071 (3) COMMISSIONER OF INCOME TAX (APPEALS)-9, KO LKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.