SHRI ATMA RAM, NAKODAR V. INCOME TAX OFFIECER WARD , NAKODAR

ITA 141/ASR/2023

AI Insights

The case involves Atma Ram, the appellant, contesting an order from the Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, Delhi, which confirmed an addition of Rs. 4,50,000 as income from undisclosed sources for the Assessment Year 2017-18. The appellant argued that this addition was arbitrary and lacked legal and factual basis, as it was based on the sale of an old tractor, evidenced by an affidavit. The Tribunal noted that the lower authorities had not adequately addressed the appellant's contentions or provided a reasoned order, leading to a violation of the principles of natural justice. Consequently, the Tribunal remanded the case for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114392 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 11-05-2023
• Other Referred Cases: Tin Box Company vs. CIT
• Laws Referred To: Income Tax Act-1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHIT KUMAR NIGAM
• Assessee Lawyers: WAY OF REBUTTING ITS CONTENTION SUPPORT OF
• Keywords: Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 144; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (VIRTUAL COURT) BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 141/Asr/2023 Assessment Year: 2017-18 Atma Ram S/o Piara Lal Vill. Buta Dian Channa, PO- Kot Badal Khan, Teh.- Nakodar, Distt. Jalandhar 144039 [PAN: BZFPR 6609K] Vs. Income Tax Officer, Ward, Nakodar (Appellant) (Respondent) Appellant by : Sh. Rakesh Joshi, Adv. Respondent by: Sh. Mohit Kumar Nigam, Sr. DR Date of Hearing: 31.07.2023 Date of Pronouncement: 04.08.2023 ORDER Per Dr. M. L. Meena, AM: This appeal has been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 14.03.2023 in respect of Assessment Year: 2017-18. ITA No. 141/Asr/2023 Atma Ram v. ITO 2 2. The assessee has raised the following grounds of appeal: “1. That the ld. Commissioner of Income Tax (Appeals) NFAC, Delhi, misdirected himself while confirming the addition of Rs.4,50,000/- as income from undisclosed sources. 2. That the action of ld. Commissioner of Income Tax (Appeals) NFAC, Delhi in confirming the said addition is arbitrary, illegal being against law and facts of the case. 3. That the impugned order under appeal is arbitrary and contrary to law & facts of the case, hence deserves to be cancelled/annulled. 4. That the appellant craves leave to add/alter or forgo any of the grounds of appeal before or at the time of hearing of appeal.” 3. The case has been fixed for hearing on 14.06.2023, 06.07.2023, 24.07.2023 and 31.07.2023. None appeared nor any adjournment application is received on record. Since, the appellant is not interested in pursuing the appeal and hence, we decided to hear the Ld. DR and adjudicate the appeal on merits of the case. 4. Heard the Ld. DR, perused the material on record, and impugned order. Admittedly, the authorities below passed orders ex parte qua the assesse. The appellant contended in the grounds of appeal that the assessment framed u/s 144 is against the law and natural justice, hence it is liable to be quashed; that the addition of Rs. 4,50,000/- u/s 69A of the ITA No. 141/Asr/2023 Atma Ram v. ITO 3 Income Tax Act-1961 without bringing any adverse material on record and that addition of Rs. 1,450000/- u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961 in respect of cash deposit in bank was out of amount received on sale of old tractor and proof of sale of tractor with support of affidavit of the purchase of the tractor was submitted before Ld. AO during impugned assessment proceedings. There was no defect pointed out in the books and documents filed during assessment proceedings, and explanation that cash deposit is out of sale of tractor by the appellant. There was no specific or adverse material brought on record by the Ld. A.O. or the CIT (A) from which it could he concluded that appellant had not sold his tractor for the consideration of Rs. 450000/- in the impugned assessment order and that without having even a single/iota of evidence against the assesses, merely on surmises and conjectures, sale of own tractor of the appellant could not have been characterized/ replaced with alleged unexplained investment u/s 69A. 5. It is seen that the Ld. CIT(A) has confirmed the addition by observing that the A.O. has made detailed discussion in the assessment order about the extent of compliance of the appellant which has compelled the A.O. to pass an order u/s 144 of the Act and that “I find no infirmity in the action of ITA No. 141/Asr/2023 Atma Ram v. ITO 4 the A.O. in passing an order under section 144 of the Act”. However, the Ld. CIT(A) while confirming the addition, has not substantiated the finding of the AO by rebutting the contention of the appellant as regards to the source of cash deposit in bank being the sale of Tractor with support of affidavit. In view of that matter, the Ld. CIT(A) and the AO has acted in violation of principles of natural justice. 6. In our view, the authorities below ought to have disproved the claim of the assessee by way of rebutting its contention with support of corroborative documentary evidences on record after granting an adequate opportunity of being heard. The Hon’ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 in which their Lordships of Supreme Court of India observed as under: “Assessment - Opportunity of being heard - Setting aside of assessment - Assessment order must be made after the assessee has been given reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts — Assessment order set aside and matter remanded to assessing authority for fresh consideration.” ITA No. 141/Asr/2023 Atma Ram v. ITO 5 7. In view of the principles of natural justice, we consider it deem fit to restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidences filed on record and may be filed before him during the fresh Assessment Proceedings after granting sufficient opportunity of being heard to the assesse with a direction that the AO shall issue a Show Cause Notice and thereafter pass a reasoned order in accordance with law. Accordingly, Assessment order set aside and matter remanded to assessing authority to pass de novo assessment as per law. 8. In the result, the appeal of the assesse is allowed for statistical purpose. Order pronounced in the open court on 04.08.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order