Sajan Singh Sekhawat, Bikaner V. ITO, Ward-2(2), Bikaner

ITA 210/JODH/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1883 (ITAT-JODHPUR)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-03-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 08-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENA
• Keywords: Competent authority
• Section: 68; 148; 44AD; 250; 207; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No.210/Jodh/2023 Assessment Year: 2011-12 Sajan Singh Sekhawat B-22, Karani Nagar, Pawan Puri, Bikaner. [PAN: BPTPS9787M] (Appellant) Vs. Income Tax Officer Ward-2(2), Bikaner. (Respondent) Appellant by Sh. Amit Kothari, C.A. Respondent by Sh. Prem Prakash Meena, Sr. DR Date of Hearing 13.03.2024 Date of Pronouncement 31.05.2024 ORDER Per:DR. S. Seethalakshmi, JM: This appeal filed by assessee is arising out of the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 12.05.2023 [here in after “ld.CIT(A)(NFAC)”] for assessment year 2011-12, which in turn arise from the order dated 12.12.2018 passed under section 143(3)/147of the Income Tax Act, by the AO. 2. In this appeal, the assessee has raised following grounds: - I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 2 “1. The ld. CIT(A) has erred in dismissing the appeal filed by the appellant manually. The ld. CIT(A) has erred in observing that since the appeal has not been filed online, the same is invalid. The ld. CIT(A) has erred in not deciding the appeal on merits. 2. The appeal filed manually before the jurisdictional appellate authority which were migrated to National Faceless Appellate Centre, and the ld. CIT(A)NFAC had erred in not entertaining such appeal. 3. The ld. CIT(A) has erred in not deleting the addition of Rs. 14,50,000/- deposited in the bank account. The addition so made is bad in law and bad on facts. 4. The ld. CIT(A) has erred in not allowing deduction of Rs. 50,000/- claimed u/s 80DD of the Act. 5. The appellant pray that the proceedings u/s 148 initiated in the case of the appellant is bad in law and bad on facts. 6. The appellant pray for suitable costs. 7. The appellant crave liberty to add, amend, alter, modify or delete any of the ground of appeal on or before its hearing before your honour.” 3. Brief fact of the case is that the assessee filed his return of income for the assessment year 2011-12 on 04.01.2012 declaring return total income of Rs. 1,54,110/-. The case was reopened as per the provisions of section 147of the Income Tax Act, 1961 for the assessment year 2011-12 vide notice u/s 148 of the Act dated 30.03.2018 after obtaining the necessary approval from the competent authority. During the course of assessment proceedings, it was found from the bank account statement submitted by the assessee that there were deposits of Rs.6,00,000/- on 29.09.2010, Rs.2,50,000/- on 15.01.2011 and Rs.6,00,000/- on 22.02.2011 by way of cheque. The assessee was asked to explain the sources for the deposits of Rs. 14,50,000/- made in the bank by way of issue of questionnaire dated 03.12.2018. However, the assessee had not I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 3 responded to the questionnaire to explain the sources, in response to the questionnaire dated 03.12.2018 as well as to the subsequent opportunity given to the assessee. Therefore, the assessing officer treated the above deposits of Rs. 14,50,000/- (6,00,000+ 2,50,000 + 6,00,000) as unexplained income from other sources and added to the total income of the assessee. In addition to the above, the assessee claimed deduction under section 80DD of Income Tax Act, 1961. However, no documentary evidence in support of his claim was submitted by the assessee. Therefore, the assessing officer disallowed the deduction of Rs.50,000/- claimed by the assessee under section 80DD of the Income Tax Act, 1961. 4. Aggrieved from the order of the assessing officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds of the appeal so raised by the assessee, the relevant finding of the ld. CIT(A) is reiterated here in below:- “ Decision: 6.1. Grounds of Appeal No.1 & 2: 1. The Ld A.O. erred in disallowing vehicle finance. 2. The Ld. A.O. erred in disallowing medical expenses. 6.2 As seen from appeal of the appellant in Form 35, it is noticed that the appellant filed an appeal in paper form manually on 24.01.2019, which in not valid as per Circular No. 20/2016 issued by the Central Board of Direct taxes, New Delhi in F.NO. 279/Misc./M-54/2016/ITJ, dated 26.05.2016. As per this circular, Rule 45 of the Income Tax rules, 1961, mandates compulsory e- filing of appeal before the Commissioner of Income Tax (Appeals) with effect from 01.03.2016. I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 4 Scanned copy of Rule 45 of the Income Tax Rule 1962 is re produced as under: Part X Appeals [Form of appeal to Commissioner (Appeals), 45. (1) An appeal to the Commissioner (Appeals) shall be made in Form No. 35. (2) Form No. 35 shall be furnished in the following manner, namely:- (a) in the case of a person who is required to furnish return of Income electronically under sub-rule (3) of rule 12,- ( i) by furnishing the form electronically under digital signature, if the return of income is furnished under digital signature; (ii) by furnishing the form electronically through electronic verification code in a case not covered under sub-clause (1); (b) in a case where the assessee has the option to furnish the return of income in paper form, by furnishing the form electronically in accordance with clause (a) of sub-rule (2) or in paper form. be verified (3) The form of appeal referred to in sub-rule (1), shall by the person who is authorised to verify the return of income under section 140 of the Act, as applicable to the assessee. (4) Any document accompanying Form No. 35 shall be furnished in the manner in which the said form is furnished. (5) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall- (i) specify the procedure for electronic filing of Form No. 35and documents, (ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (2), for the purpose of verification of the person furnishing the said form, and (iii) be responsible for formulating and implementing appropriate security, archival and retrieval of policies to relation to the said form so furnished.] I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 5 The scanned copy of the Circular No. 20/2016 issued by the Central board of Direct Taxes, New Delhi in F.NO. 279/Misc/M-54/2016/ITJ, dated 26.05.2016 is attached hereunder:- F.No.279/Misc/M-54/2016/TTJ Circular No. 20/2016 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, Dated: 26th May, 2016 Subject: E-filing of appeals: Extension of time limit-rez Rule 45 of the Income Tax Rules, 1962, mandates compulsory e-filing of appeals before Commissioners of Income Tax (Appeals) with effect from 01.03.2016 in respect of persons who are required to furnish return of Income electronically. It has come to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that in some cases the taxpayers who were required to e-file Form 35, were unable to do so due to lack of knowledge about e-filing procedure and/or technical issues in e-filing. Also, the EVC functionality for verification of e-appeals was made operational from 12.05.2016 for individuals and from 19.05.2016 for other persons. Word limit for filing grounds of appeal and mapping of jurisdiction of Commissioners of Income Tax (Appeals) were also a cause of grievance in some cases. 2 The matter has been examined by the Board. While the underlying issues relating to e-filing of appeals have since been addressed and resolved, in order to mitigate any inconvenience caused to the taxpayers on account of the new requirement of mandatory e-filing appeals, it has been decided to extend the time limit for filing of such e-appeals. E-appeals which were due to be filed by 15.05.2016 can be filed up to 15.06.2016. All e-appeals filed within this extended period would be treated as appeals filed in time. 3. In view of the extended window for filing e-appeals, taxpayers who could not successfully e-file their appeal and had filed paper appeals are required to file an e-appeal in accordance with Rule 45 before the extended period i.e. 15.06.2016. Such e-appeals would also be treated as appeals filed within time. (Sadhana Panwar) I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 6 DCIT (OSD) (ITJ). CBDT, New Delhi. Copy to: 1. The Chairman, Members and officers of the CBDT of the rank of Under Secretary and above. 2. OSD to Revenue Secretary. 3. All Pr. Chief Commissioners of Income-Tax & All Directors General of Income-Tax with a request to bring to the attention of all officers. 4. The Pr. Director General of Income-Tax, NADT, Nagpur. 6.3. It is seen from the above circular that rule 45 of Income Tax Rules, 1962 mandates compulsory e-filing of appeals before the Commissioner of Income Tax (Appeals) with effect from 01.03.2016 in respect of persons who are required to furnish return of income electronically and the tax payers who could not successfully e-filed the appeal and had failed paper appeals were required to file an e-appeal in accordance with Rule 45 before the extended period i.e. 15.06.2016. Such e-appeal would be treated as appealed filed within time. 6.4. However, in the appellant's case, the appellant filed paper appeal dated 25.12.2012 filed on 24.01.2019. Therefore, notice under section 250 of the Income Tax Act, 1961 was issued to the appellant through ITBA functionality to show cause as to why the paper appeal filed manually should not be treated as invalid appeal. In response to the same, the appellant submitted his reply as under: "The appellant respectfully submits that due to old age as well as suffering from lot of deises, he could not contract for assistance regarding e-filing of appeal for the assessment year 2011-12. whereas the manual appeal was filed as on 24-01-2019 and appellant has not completed the requirement of E- filing of appeal i.e. PAN and Aadhar link as well as update of e-mail, address, the appellant has not filed their return because of bad health as well as no source of income which liable to tax under IT Act, therefore I request your honour that considering the above facts the consideration of the appellant may kindly be accepted. The appellant respectfully submits as follows:- 1. Ground No. 1: The Ld AO has erred in made an addition of Rs. 1450000/- u/s 68 of IT Act 1961 without examining the records of the assessee as well as not collecting details of deposit made in appellant account. I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 7 The appellant being a transport operator and have three Heavy Goods Vehicle i.e. Vehicle registration No. Month RJ-07-GA-2087 12 RJ-07-GA-6754 12 RJ-07-GB-2007 03 The amount of Rs. 1450000/- was deposited out of loans from following persons:- Date Cheque No Amount Loans & Adv. 20.09.2010 237099 600000 Induslnd bank 15.01.2011 399436 250000 Induslnd bank 22.02.2011 400380 600000 Induslnd bank These loans were taken through Bank by account payee cheque as details given above, hence there is no question of any undisclosed by H'ble High Court Bench (P& II) The judicial ruling in the case of Principal Commissioner of Income Tax Bhatinda vis Amarawati Infrastructure Development Pvt Ltd (2020) 53 ITD 138 (P& H) H'ble High Court held that Sec. 68 of Income Tax Act 1961 addition made section 68 of IT. Act 1961 were deleted as all that, three ingredients required for fulfilment of provision of section 68 are met l.c 1. Genuine of investor who introduce fund II) Capacity of person from whom loan was borrowed III) Genuine of transaction have been considered Abhi Developers v/s ITO (2007)12 SOT 444 ITO v/s Mark Construction (2012)53 SOT 22 (Kol) The judicial authority held that while computing income of assessee u/s 44AD, AE the assessing officer does not have the power to assess authority in excess of return income, if return filed u/s 44AD & 44AE of IT Act 1961. No addition can be made on the ground that the assessee was not able to explain discrepancies in the books of accounts. CIT v/s Nitin Soni (2012) 207 Taxman 332 (ALL) The H'ble court held that the concern assessee individual entry of cash deposit in his Bank. The appellant has borrowed the fund as per bank statement produced for your kind verification, hence facts of the appellant may kindly be considered and appeal may have allowed accordingly, 2. Ground No. 2:- The Ld AO has erred in disallowing medical expenses of Rs. 50000/against incurred for treatment of brain tumour treatment and operation of appellant in the regard was made at Jaipur and now under observation of doctors, hence I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 8 expenses incurred, but as per limitation of IT Act 1961 the claim u/s 80DD(b) Rs. 50000/- considered the limitation of section 80D of 1. T. Act 1961. Therefore, I request your honour that considering the above facts of the appellant, the same may kindly be considered and allowed." 6.5. In the submissions made by the appellant in respect of filing of paper appeal filed manually, the appellant submitted that due to old age and suffering from lot of diseases, he could not contract for assistance regarding e-filing of appeal and further stated the he had not completed the requirements of E-filing of appeal i.e. PAN and Aadhar link as well as update of e-mail address. However, he had not submitted any documentary evidence in support of his reasons as submitted for not E-filing the appeal. 6.6. It is clear from the above that the appeal pending which needs to be adjudicated presently is the paper filed appeal dated 24.01.2019 which is not in accordance with Rule 45 of Income Tax Rules 1961. Rule 45 of the Income Tax Rule 1962 and the scanned copy of the Circular No. 20/2016 issued by the Central board of Direct Taxes, New Delhi in F.NO. 279/Misc/M- 54/2016/TJ, dated 26.05.2016 are attached hereunder. PART X APPEALS Form of appeal to Commissioner (Appeals). 45. (1) An appeal to the Commissioner (Appeals) shall be made in Form No. 35. (2) Form No. 35 shall be furnished in the following manner, namely:- (a) in the case of a person who is required to furnish return of Income electronically under sub-rule (3) of rule 12,- (i) by furnishing the form electronically under digital signature, if the return of income is furnished under digital signature: (ii) by furnishing the form electronically through electronic verification code in a case not covered under sub-clause (i): (b) in a case where the assessee has the option to furnish the return of income in paper form, by furnishing the form electronically in accordance with clause (a) of sub-rule (2) or in paper form. (3) The form of appeal referred to in sub-rule (1), shall be verified by the person who is authorised to verify the return of income under section 140 of the Act, as applicable to the assessee. (4) Any document accompanying Form No. 35 shall be furnished in the manner in which the said form is furnished. (5) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall- (i) specify the procedure for electronic filing of Form No. 35 and documents: I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 9 (ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule (2), for the purpose of verification of the person furnishing the said form, and (iii) be responsible for formulating and implementing appropriate security, archival and retrieval of policies in relation to the said form so furnished.] ITBAINFAC/S/250/2023-24/10/528022721 Circular No. 200015 F.No.279/Misc/M-54/2016/TTJ Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, Dated: 26th May, 2016 Subject: E-filing of appeals: Extension of time limit-reg Rule 45 of the Income Tax Rules, 1962, mandates compulsory e-filing of appeals before Commissioners of Income Tax (Appeals) with effect from 01.03.2016 in respect of persons who are required to furnish return of income electronically. It has come to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that in some cases the taxpayers who were required to o-file Form 35, were unable to do so due to lack of knowledge about e-filing procedure and/or technical issues in e-filing. Also, the EVC functionality for verification of e-appeals was made operational from 12.05.2016 for individuals and from 19.05.2016 for other persons. Word limit for filing grounds of appcal and mapping of jurisdiction of Commissioners of Income Tax (Appeals) were also a cause of grievance in some cases. 2. The matter has been examined by the Board. While the underlying issues relating to e-filing of appeals have since been addressed and resolved, in order to mitigate any inconvenience caused to the taxpayers on account of the new requirement of mandatory e-filing appeals, it has been decided to extend the time limit for filing of such e-appeals. E-appeals which were due to be filed by 15.05.2016 can be filed up to 15.06.2016. AII c-appeals filed within this extended period would be treated as appeals filed in time. 3. In view of the extended window for filing e-appeals, taxpayers who could not successfully e-file their appeal and had filed paper appeals are required to file an e-appeal in accordance with Rule 45 before the extended period i.e. 15.06.2016. Such e-appeals would also be treated as appeals filed within time. (Sadhana Panwar) DCIT (OSD) (ITJ), CBDT, New Delhi. Copy to: I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 10 1. The Chairman, Members and officers of the CBDT of the rank of Under Secretary and above. 2. OSD to Revenue Secretary. 3. All Pr. Chief Commissioners of Income-Tax & All Directors General of Income-Tax with a request to bring to the attention of all officers. 4. The Pr. Director General of Income-Tax, NADT, Nagpur. 7. In view of the above it is evident that the appeal filed in Paper Form Manually is not a valid appeal as per Rule 45 of the Income Tax rules 1961 and in accordance with the Circular No. 20/2016 issued by the Central board of Direct Taxes, New Delhi in F.NO. 279/Misc./M- 54/2016/ITJ, dated 26.05.2016. Therefore, this paper appeal filed manually is dismissed as invalid. Accordingly, all the grounds of appeal of the appellant are treated as dismissed. In the result, the paper filed appeal of the appellant is dismissed as invalid. 8. Disposal of appeal. 8.1. In the result, the appeal filed by the appellant is dismissed.” 5. As the assessee did not receive any favour from the appeal filed before ld. NFAC/ CIT(A). The present appeal filed against the said order of the ld. NFAC before us on the grounds as reiterated in para 2 above. 6. During the course of hearing, the ld. AR for the assessee submitted that assesee in respect of filing of paper appeal filed manually and the assesee due to old age and suffering from diseases, he was not in a position to take assistance regarding e-filing of appeal and further stated the he had not completed the requirements of E-filing of appeal i.e. PAN and Aadhar link as well as update of e-mail address. Further the ld AR for the assesee contended that the ld. CIT(A) has erred in observing that since the appeal has not been filed online, on the very same ground of appeal treated as invalid. The Ld. AR for the assessee I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 11 vehemently submitted that the ld. CIT(A) has erred in not deciding the appeal on merits and the Ld. AR for the assessee has relied upon the following orders in support of the contentions so raised:- S. No. Particulars Page No. 1. Copies of judgment relied upon: a) Smt. Rani Kusum vs. Kanchan Devi and Ors on 16 August, 2005. 1-8 b) Shri Mahesh Agarwal vs. The ACIT Circle-6, ITA No. 4/JP/2003 9-14 7. On the other hand, Ld. DR did not have any objection if the matter be remanded back to the file of Ld. CIT(A) for deciding a afresh. 8. We have heard the rival contentions, perused the material placed on record.we note from the submission made by the ld. AR for the assesee that assessee was not in a position to take assistance regarding e-filing of appeal and further stated the he had not completed the requirements of E-filing of appeal i.e. PAN and Aadhar link as well as update of e-mail address and the undisputed fact that assessee has filed the appeal physically on 24.01.19, which was before the due date of filing the appeal . 9. Further we note admittedly, the scheme of physical filing of appeal was replaced by electronic /online w.e.f. 01.03.2016 vide rule 45 of the Income Tax Rules. Since there was some difficulty in e-filing, CBDT has taken due cognizance of such difficulty and extended the time limit vide its circular No 20/2016 dated 26.05.2016. Thus, Ld. CIT(A) should have accepted the appeal I.T.A. No.210/Jodh/2023 Sajan Singh Sekhawat vs. ITO 12 and decided the appeal on merits. Based on these set of facts the appeal of the assessee was filed in time in physical mode and merely same was not filed online, the same cannot held invalid. From the above facts and circumstances of the case, based on the citations above relied upon by the assessee and CBDT circular No 20/2016 dated 26.05.2016, we are of the considered view that the appeal of the assessee is required to be admitted and decided on merits, therefore, we remanded back the matter to the file of Ld. CIT(A) to decide the issue afresh after giving sufficient opportunity of hearing to the assessee In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Rathod Kamlesh Jayantbhai) (DR. S. Seethalakshmi) Accountant Member Judicial Member Dated 31/05/2024 Santosh 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