SHRI GURBACHAN SINGH S/O SH. GURDEV SINGH, MANSA V. INCOME TAX OFFICER WARD - 1 (4), MANSA

ITA 197/ASR/2022

AI Insights

The case involves appeals by Sh. Gurbachan Singh against the orders of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2011-12. The primary issues revolved around the confirmation of a penalty under section 271(1)(c) and the assessment of unexplained income amounting to Rs. 9,51,000, which was added to the appellant's income as unexplained investment under section 69A of the Income Tax Act, 1961. The tribunal found procedural lapses in the handling of the appellant's case, particularly the ex-parte nature of the CIT(A)'s decision, which violated the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114711 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 10-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard; Principle of natural justice
• Section: 148; 144; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. Nos. 197 & 198/Asr/2022 Assessment Year: 2011-12 Sh. Gurbachan Singh S/o Sh. Gurdev Singh Vill. Hero Kalan, Teh. & Distt. Mansa [PAN: AVVPS 9549L] (Appellant) V. Income Tax Officer, Ward-1(4), Mansa (Respondent) Appellant by None Respondent by Ms. Priyanka Singla, Sr. DR Date of Hearing : 21.12.2022 Date of Pronouncement : 31.01.2023 ORDER Per Dr. M. L. Meena, AM: Both the appeals have been filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 12.08.2022 & 18.08.2022 in respect of Assessment Year 2011-12. ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 2 2. The assessee has raised the following grounds of appeal in ITA No. 197/Asr/2022: “1. That the Ld. CIT(A) has erred in confirming the penalty u/s 271 (1 )(c) amounting to Rs. 1,43,479/- as levied by the Ld. AO vide order dated 13.05.2019. 2. That the Ld. CIT(A) has failed to afford reasonable and proper opportunity to the assessee before confirming the levy of penalty as the quantum order confirming the addition was passed by him on 12.08.2022 and immediately, thereafter, he has confirmed the levy of penalty, which is against the facts 6t circumstances of the case. 3. That no sufficient or reasonable opportunity has been afforded by the Ld. CIT(A) in confirming the levy of the penalty u/s 271(1)(c). 4. Notwithstanding the above said grounds of appeal, the levy of penalty u/s 271 (1)(c) is otherwise not sustainable as no specific charge as to whether the penalty have been levied for concealment of income or for furnishing inaccurate particulars of income have been established. 5. That the appellant craves leave to add, amend, alter, any ground of grounds of appeal during the course of hearing.” 3. The assessee has raised the following grounds of appeal in ITA No. 198/Asr/2022: “1. That the ld. CIT(A) has erred in confirming the order of the ld. AO with regard to the assessment of income as computed by the Assessing Officer, Mansa at Rs. 9,51,000/- who framed the assessment u/s 144 r.w.s. 147 of the Income Tax Act, 1961 vide order dated 19.11.2018. 2. That the Ld. CIT(A) has failed to appreciate that the ITO, Sunam who issued the notice u/s 148 on 27.03.2018 did not have jurisdiction over the assessee and, thereafter, realizing his mistake, transferred the file to the ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 3 ITO, Mansa who without issuing any fresh notice u/s 148, framed the assessment u/s 147/144 and, thus, completion of the assessment by the ITO, Mansa is void-ab-initio and deserves to be quashed. 3. Notwithstanding the above said grounds of appeal, the confirmation of addition of Rs. 9,51,000/- on account of the deposits in the bank account of the assessee and treating the same as unexplained investment under the provision of Section 69A is bad in law. 4. That the passing of an ex-parte order by the Ld. CIT(A) is against the facts & circumstances of the case as during the period from March, 2020 to June, 2022, the assessee was prevented by sufficient/reasonable cause on account of COVID-19, Pandemic in not furnishing the information before the CIT(A) and, as such, the passing of the ex-parte order by the Ld. CIT(A) was not justified, taking into consideration the facts that the assessee is a agriculturist and has no business income and, therefore, the assessee prays for setting-aside the case to the file of the Ld. AO to be framed afresh after affording reasonable opportunity to the assessee. 5. That the appellant craves leave to add, amend, alter, any ground of grounds of appeal during the course of hearing.” 4. None appeared for the assesse. However, considering peculiar fact stated in ground no.4, on account of violation of principles of natural justice, it is decided to heard the Ld. DR and decide the appeal. 5. ITA No. 198/Asr/2022: Appellant is an agriculturist as per his submissions and has not filed his ITR for AY 2011-12. As per the information available with the department the appellant has deposited Rs.9,51,000/- during the FY 2010- 11 in his bank account with PNB, Mansa. To verify and examine the source ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 4 of cash deposits, proceedings u/s 147 was initiated and notice u/s 148 was issued. The AO treated the cash deposit of Rs. 9,51,000/- as unexplained investment u/s 69A of the IT Act and added to the income vide assessment order dated 19.11.2018 passed u/s. 147/144 of the Income Tax Act, 1961. 6. In appeal, the CIT(A) appeal confirmed the addition by impugned order passed ex-parte qua the assessee by observing vide para 6.6 as under: “6.6 In view of the non-compliance, in view of the fact that the statement of fact and the grounds of appeal are not substantiated by any proper statement or evidence and on perusal of the assessment order u/s 147/144 dated 19.11.2018, I find that the assessment made by the AO is justified and acceptable. The appellant was provided multiple opportunity in the interest of natural justice. However, the appellant did not furnish any explanation or documentary proof to support his claim with respect to the cash deposit made by him. The appellant submitted requests for adjournment vide letters dated 17.08.2020, 14.09.2020 & 12.01.2021. Mere filing of adjournment requests by the appellant without providing explanation in support of his claims does absolve him of his legal obligations and can be construed as a mere attempt to delay the appellate proceedings. The appellant has shown a callous and non serious attitude towards the departmental proceedings and it appears obvious that the appellant has nothing substantial to say with regards to his claims. Accordingly the treatment of cash deposit of Rs. 9,51,000/- in the appellants bank account as unexplained investment under the provisions of section 69A and addition made to the total income by the AO is hereby confirmed. Also, in absence of the any submissions from the appellant is ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 5 not possible to adjudicate over the merits of the appeal. In view of the fact that the statement of fact and the grounds of appeal are not substantiated by any proper statement or evidence, the appeal is dismissed.” 7. The appellant in the grounds raised the contention that the CIT(A) passed an ex-parte order qua the assessee, ignoring the facts & circumstances of the case as during the period from March, 2020 to June, 2022, the assessee was prevented by sufficient/reasonable cause on account of COVID-19, Pandemic in not furnishing the information before the CIT(A) and, therefore, the passing of the ex-parte order by the Ld. CIT(A) in violation of principles of natural justice is bad in law. He contended the facts that the assessee is an agriculturist and has no business income and no opportunity being granted, therefore, the assessee prays for setting-aside the case to the file of the Ld. AO to pass order denavo after affording reasonable opportunity to the assesse. 8. The Ld. DR stands by the impugned order. However, he has no objection to the request of the Appellant on account of the principles of natural justice. 9. Heard. Admittedly, the appellant assessee requested before the Ld. CIT(A) for adjournment vide letters dated 17.08.2020, 14.09.2020 & 12.01.2021. However, the CIT(A) without appreciating the reasons for ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 6 seeking adjournment, has rejected the same by holding that mere filing of adjournment requests by the appellant without providing explanation in support of his claims does absolve him of his legal obligations and can be construed as a mere attempt to delay the appellate proceedings. In our view, the Ld. CIT(A) ought to have issued show cause notice and taken the appellant rebuttal on record as it was an ex-parte assessment order passed by the AO without controverting the issue to the assesse. Since, an ex- parte assessment order is being confirmed by the Ld. CIT(A) by merely mentioning that in absence of the any submissions from the appellant, it is not possible to adjudicate on the merits of the appeal is construed in violation of principles of natural justice. 10. In view of the principles of natural justice, we accept the grievance of the assessee as genuine and accordingly, we consider it deem fit to restore the matter back to the file of the Assessing Officer to pass assessment order de novo to decide the matter afresh by a speaking order after considering the written submission and evidences on record during the afresh proceedings, and after granting sufficient opportunity of being heard to the assessee. No doubt, the assessee shall cooperate in the fresh proceedings. 11. ITA No. 197/Asr/2022 : ITA Nos.197&198/Asr/2022 Gurbachan Singh v. ITO 7 Since the quantum appeal has been restored to the Assessing officer, for afresh adjudication, the consequential penalty upheld by the CIT(A) would not survive. Accordingly, the penalty u/s 271 (1)(c) amounting to Rs. 1,43,479/- is deleted. However, the AO shall be at liberty to initiate penalty proceedings as per law if required after completion of de novo assessment for the year under consideration. 12. In the result, the quantum appeal in ITA No. 198/Asr/2022 is allowed for statistical purpose and ITA No. 197/Asr/2022 is allowed in the terms indicated as above. Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 31.01.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr./P.S.* Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order