Shri Prabesh Kumar Pradhan, Puri V. ITO, Puri Wardq, Puri

ITA 195/CTK/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1422 (ITAT-CUTTACK)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-06-2021
• Assessment Year: 2017-2018
• Appeal Filed On: 22-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE SHRI SHRI PRABESH AT/PO: GOVINDAPUR, PS: PIPILI, PURI PAN/GIR NO. CQTPP 0456 Q (APPELLANT REVENUE BY THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE CIT(A)-2 , BHUBANESWAR 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. FOR THAT, THE IMPUGNED ORDER OF ASSESSMENT SO PASSED BY THE FORUMS BELOW ARE NOT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AS SUCH THE ADDITIONS MADE THEREIN ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2. FOR THAT, THE LEARNED C.I.T(A) HAS COMMITTED GROSS ERROR OF LAW IN NOT DELETING THE ENTIRE ADDITION OF RS.6,31,000.00 AND IN REDUCING THE ADDITION TO RS.4,31,200.00, MADE BY THE LEARNED A.O., TREATING CASH DEPOSITS MADE IN THE BANK DURING DEMONETIZATION BY APPLYING SECTION 69A OF THE ACT, PARTICULARLY WHEN, THE SAME FORMED PART OF THE BUSINESS TURNOVER ALREADY DISCLOSED, AS SUCH, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK SHRI CHANDRA MOHAN GARG, JUDICIAL ITA NO.195/CTK/2020 ASSESSMENT YEAR : 2017-18 SHRI PRABESH KUMAR PRADHAN, AT/PO: GOVINDAPUR, PS: PIPILI, VS. ITO, PURI WARD, PURI CQTPP 0456 Q (APPELLANT ) .. ( RESPONDENT ASSESSEE BY : SHRI P.K.MISHRA, AR REVENUE BY : SHRI SOVESH CHANDRA MOHANTY , ADDL. CIT ( DATE OF HEARING : 29/06/ 202 1 DATE OF PRONOUNCEMENT : 30/06 /20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE , BHUBANESWAR DATED 24.8.2020 FOR THE ASSESSMENT YEAR THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: THAT, THE IMPUGNED ORDER OF ASSESSMENT SO PASSED BY THE FORUMS BELOW ARE NOT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AS SUCH THE ADDITIONS MADE THEREIN ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2. FOR THAT, THE LEARNED C.I.T(A) HAS COMMITTED GROSS ERROR OF LAW IN NOT DELETING THE ENTIRE ADDITION OF RS.6,31,000.00 AND IN REDUCING THE ADDITION TO RS.4,31,200.00, MADE BY THE LEARNED A.O., TREATING CASH DEPOSITS MADE IN THE BANK DURING DEMONETIZATION PERIOD AS UNEXPLAINED INCOME OF THE APPELLANT BY APPLYING SECTION 69A OF THE ACT, PARTICULARLY WHEN, THE SAME FORMED PART OF THE BUSINESS TURNOVER ALREADY DISCLOSED, AS SUCH, P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER ITO, PURI WARD, PURI RESPONDENT ) , ADDL. CIT ( DR) 1 /20 21 THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE FOR THE ASSESSMENT YEAR 2017-18. THAT, THE IMPUGNED ORDER OF ASSESSMENT SO PASSED BY THE FORUMS BELOW ARE NOT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AS SUCH THE ADDITIONS MADE THEREIN ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2. FOR THAT, THE LEARNED C.I.T(A) HAS COMMITTED GROSS ERROR OF LAW IN NOT DELETING THE ENTIRE ADDITION OF RS.6,31,000.00 AND IN REDUCING THE ADDITION TO RS.4,31,200.00, MADE BY THE LEARNED A.O., TREATING CASH DEPOSITS MADE IN THE BANK DURING PERIOD AS UNEXPLAINED INCOME OF THE APPELLANT BY APPLYING SECTION 69A OF THE ACT, PARTICULARLY WHEN, THE SAME FORMED PART OF THE BUSINESS TURNOVER ALREADY DISCLOSED, AS SUCH, ITA NO.195/CTK/2020 ASSESSMENT YEAR : 2017-18 P A G E 2 | 5 THE IMPUGNED ADDITION BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 3. FOR THAT, THE SECTION 69A OF THE ACT HAS NO APPLICATION UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AS SUCH, THE CONSEQUENTIAL ADDITION OF RS.4,31,000.00 SO MADE, BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 4. FOR THAT, BOTH THE FORUMS BELOW HAVE COMMITTED GROSS ERROR OF LAW AS WELL AS IN FACT IN ESTIMATING NET PROFIT @ 8% OF THE TOTAL GROSS TURNOVER RECEIVED BY THE APPELLANT, IGNORING THE RETURN OF INCOME FILED BY THE ASSESSEE, PARTICULARLY WHEN, IT WAS DISCLOSED IN THE SAID RETURN OF INCOME. THE IMPUGNED ESTIMATION OF PROFIT AND CONSEQUENTIAL ADDITION OF RS.1,91,500.00, BEING ILLEGAL, ARBITRARY, WITHOUT ANY BASIS AND BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 5.FOR THAT THE APPELLANT SHOULD HAVE BEEN ALLOWED SUFFICIENT OPPORTUNITY OF BEING HEARD BY THE LD CIT(A) DURING THIS COVID PERIOD, BEFORE PASSING ANY ORDER. SINCE THE IMPUGNED ORDER PASSED BY THE LD CIT(A) IS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, AS SUCH THE SAME, BEING NOT SUSTAINABLE IN THE EYE OF LAW IS LIABLE TO BE SET ASIDE IN THE INTEREST OF JUSTICE. 6. FOR THAT, SINCE THE NET TAXABLE INCOME DOES NOT EXCEED THE BASIC CEILING LIMIT AS PRESCRIBED UNDER THE LAW AND THE ASSESSEE IS NOT WELL EDUCATED AND WAS IGNORANT OF INCOME TAX LAW AND WAS BUSY IN MEDICAL TREATMENT OF HIS FAMILY MEMBER, COULD NOT BE ABLE TO FILE HIS RETURN OF INCOME IN DUE TIME BUT FILED LATER ON, WHICH MAY KINDLY BE ACCEPTED IN THE INTEREST OF JUSTICE. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. IN THIS CASE, THE ASSESSEE HAS DEPOSITED OLD CURRENCY I.E. SPECIFIED BANK NOTES OF RS.6,31,000/-. WHEN THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSIT, IT WAS STATED THAT THIS IS NORMAL COLLECTION FROM CUSTOMERS BUT COULD NOT FURNISH ANY DOCUMENTARY EVIDENCE. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ITA NO.195/CTK/2020 ASSESSMENT YEAR : 2017-18 P A G E 3 | 5 ASSESSEE AS PLAUSIBLE ONE AND HAS PASSED ORDER U/S.144 OF THE ACT ON 39.9.2019 TREATING THE CASH DEPOSIT OF RS.6,31,000/- AS RECEIPT FROM UNEXPLAINED SOURCE AND ADDED THE SAME U/S.69A OF THE ACT. ON APPEAL, THE LD CIT(A) AFTER CONSIDERING THAT CERTAIN AMOUNT WOULD BE AVAILABLE WITH THE ASSESSEE FROM REGULAR BUSINESS AND NO DEPOSIT WAS DONE NEARLY 20 DAYS PRIOR TO DEMONETIZATION, ALLOWED CREDIT OF SBN OF RS.2,00,000/-, THEREFORE, REDUCED THE ADDITION FROM RS.6,31,000/- TO RS.4,31,000/-. 4. LD A.R. OF THE ASSESSEE HAS FILED CASH BOOK OF THE ASSESSEE FOR THE PERIOD 1.4.2016 TO 31.3.2017 AND SUBMITTED THAT THE ASSESSEE HAS CLOSING CASH BALANCE OF RS.6,42,406./- AS ON 8.11.2016 AND, THEREFORE, THE CASH WAS AVAILABLE WITH THE ASSESSEE TO DEPOSIT RS.6,31,000/-.HE SUBMITTED THAT IN THE FIRST APPELLATE ORDER, THE LD CIT(A) HAS ACCEPTED THAT THE TOTAL CASH DEPOSIT IN THE PERIOD FROM 1.4.2016 TO 9.11.2016 IS RS.15,06,000/- AND, ACCORDINGLY, TREATED RS.2.15 LAKHS ON AN AVERAGE PER MONTH BEFORE DEMONETIZATION TOOK PLACE. HE, THEREFORE, REDUCED THE ADDITION TO RS.4,31,000/-. IT IS THE CONTENTION OF LD A.R. OF THE ASSESSEE THAT SINCE THE APPEAL BECAME FACELESS, ALL SUBMISSIONS WERE TO BE MADE ONLINE AND BECAUSE OF TECHNICAL ERROR, CASH BOOK COULD NOT BE UPLOADED. IN THE ABSENCE OF CASH BOOK, THE LD CIT(A) DID NOT ACCEPT THE EXPLANATION OF THE ITA NO.195/CTK/2020 ASSESSMENT YEAR : 2017-18 P A G E 4 | 5 ASSESSEE. HE SUBMITTED THAT IF THE CASH BOOK COULD HAVE BEEN CONSIDERED BY THE AUTHORITIES BELOW, THEN THERE WOULD NNOT HAVE BEEN ANY ADDITION UNDER THIS HEAD. ACCORDINGLY, HE REQUESTED TO RESTORE THE MATTER TO THE FILE OF THE AO FOR FRESH CONSIDERATION AFTER CONSIDERING THE CASH BOOK OF THE ASSESSEE FOR THE SAID PERIOD,. 5. REPLYING TO ABOVE, LD DR SUBMITTED THAT THE CASH BOOK PREPARED BY THE ASSESSEE IS AN AFTERTHOUGHT AND IT WOULD FURNISHED BEFORE THE AUTHORITIES INTENTIONALLY. HE SUBMITTED THAT THE LD CIT (A) AFTER CONSIDERING THE ENTIRE FACTS, HAS REDUCED THE ADDITION TO RS.4,31,000/-. THEREFORE, HE URGED TO CONFIRM THE ORDER OF THE LD CIT(A). 7. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, ON PERUSAL OF CASH BOOK FURNISHED BY THE ASSESSEE, I OBSERVE THAT THE ASSESSEE HAS CLOSING CASH BALANCE AS ON 8.11.2016 AT RS.6,42,406./-, THEREFORE, THE ASSESSEE HAS MORE CASH IN HAND THAN THE CASH DISPUTED BY THE AO AT RS.6,31,000/-. IT IS NOT DISPUTED THAT THE ASSESSMENT WAS MADE U/S.144 OF THE ACT BY THE AO AND ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE TO PRESENT HIS CASE. THE AO HAS ALSO CONSIDERED THE RETURN FILED BY THE ASSESSEE IN SEPTEMBER, 2019. EVEN BEFORE THE LD CIT(A), THE ASSESSEE UPLOADED THE WRITTEN SUBMISSIONS THROUGH ONLINE BUT COULD NOT UPLOAD THE CASH BOOK, THEREFORE, SAME COULD NOT BE CONSIDERED. IN VIEW OF ABOVE, TO MEET THE ENDS OF JUSTICE, THE ITA NO.195/CTK/2020 ASSESSMENT YEAR : 2017-18 P A G E 5 | 5 MATTER REQUIRES TO BE RESTORED TO THE FILE OF THE AO FOR FRESH CONSIDERATION ON THE BASIS OF CASH BOOK AND BANK STATEMENT OF THE ASSESSEE. THE AO IS DIRECTED TO ADMIT THE CASH BOOK TO BE FURNISHED BY THE ASSESSEE AND PASS DENOVO ASSESSMENT. WITH THESE DIRECTIONS, THE MATTER IS RESTORED TO THE FILE OF THE AO. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 /06/2021. SD/- (CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 30 /06/2021 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR.PVT.SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SHRI PRABESH KUMAR PRADHAN, AT/PO: GOVINDAPUR, PS: PIPILI, PURI 2. THE RESPONDENT. ITO, PURI WARD, PURI 3. THE CIT(A)-2, BHUBANESWAR 4. PR.CIT-2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//