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The appeals involve Shri Ramesh Singh and Shri Manoj Kumar Sahu, who contested the appellate orders from the Commissioner of Income Tax (Appeals) regarding the assessment year 2017-18. Both appellants faced additions to their income under section 69A of the Income Tax Act, 1961, which they argued were business receipts and not unexplained money. The appellants claimed that the notices for the appellate proceedings were sent to incorrect email addresses, leading to non-compliance and lack of awareness of the proceedings. The ITAT found merit in the appellants' arguments regarding the lack of opportunity to present their case and thus set aside the appellate orders, remanding the cases for de novo assessments.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 113231 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-10-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
B
Next Hearing Date
15-10-2023
Assessment Year
2017-2018
Appeal Filed On
12-07-2023
Judgement Text
I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.118/Lkw/2023 Assessment Year: 2017-18 Shri Ramesh Singh, Proprietor M/s M. R. Brick Field, Village- Chacheda, Post-Madhopur, District-Barabanki. PAN:AJDPY3143L Vs. Income Tax Officer, Range-5(5), Barabanki. (Appellant) (Respondent) I.T.A. No.213/Lkw/2023 Assessment Year: 2017-18 Shri Manoj Kumar Sahu, Ajad Nagar, Farukhabad Chillavan Anshik, Nadarganj, Lucknow. PAN:BRNPS2198L Vs. Dy. C.I.T., Central-2, Lucknow. (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) Appeal vide I.T.A. No.118/Lkw/2023 has been filed by Shri Ramesh Singh, the assessee, for assessment year 2017-18 against impugned Appellant by Shri Shubham Rastogi, C.A. Respondent by Shri Sanjeev Krishna Sharma, Addl. CIT (D.R.) Appellant by Ms. Shweta Mittal, C.A. Respondent by Smt. Sheela Chopra, CIT (D.R.) I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 2 appellate order dated 10/06/2022 vide DIN & Order No.ITBA/NFAC/S/250/2022-23/10443396580(1). Another appeal vide I.T.A. No.213/Lkw/2023 has been filed by Shri Manoj Kumar Sahu, the assessee, for assessment year 2017-18 against impugned appellate order dated 23/10/2022 vide DIN & Order No.ITBA/NFAC/S/250/2022- 23/1049025916(1) of learned Commissioner of Income Tax (Appeals) [learned “CIT(A)” for short]. (B) For the sake of convenience, these two appeals are hereby disposed of through this consolidated order. Grounds of appeal are as under: I.T.A. No.118/Lkw/2023 “1. The Ld. C.I.T. (A), (NFAC) erred on facts & in law in passing ex- parte order without appreciating that there was a reasonable cause for noncompliance being non awareness of pendency of appeal proceedings as the email id on which the notices were issued were incorrect. 2. The Ld. C.I.T. (A), National Faceless Appeal Centre (NFAC) erred on facts & in law in upholding the addition of Rs.1,22,81,670/- u/s 69A of I.T. Act being amount credited/ deposited through cash and cheque in four bank accounts with Union Bank of India on different dates during the year including demonetization period without appreciating that the Deposits Credits in bank accounts were the business receipts of the Assessee from sale of Bricks in Proprietary Concern M/s M.R. Brick Filed, from sale of agriculture land and out of opening cash in hand and accumulated past savings. 3. The Ld. CIT(A), NFAC erred on facts and in adding Rs.1,22,81,670/- as Deposits in Bank Accounts without considering that the correct amount of Deposit in Bank were Rs.87,33,190/- which includes Cash deposit of Rs.73,66,000/- and deposits in cheque/ transfer Rs.13,67,190/-. 4. The Ld. C.I.T. (Appeals) failed to appreciate that out of total deposit of Rs.1,22,81,670/-, Rs.73,66,000/- were deposited in I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 3 Cash during the year including demonetization Period out of cash in hand available from the sale of Bricks, out of Opening Cash in hand, Cash available from accumulated past savings and Cash Received from Sale of Agriculture Land. Thus, the Cash Deposited which were part of business receipt of Assessee from sale of Bricks and Cash Received from Sale of Agriculture Land cannot be added under section 69A of I.T. Act as Unexplained Money. 5. The Ld. C.I.T. (A) erred on facts and in law in the considering that out of Total deposit of Rs.1,22,81,670/-, the deposits made through Bank Transfer Rs.13,67,190/- include Rs.5,00,000/- received from sale of Agriculture Land and rest Rs.8,67,190/- were the business receipts of the Assessee from Sale of Bricks in Proprietary Concern M/s M. R. Brick Field which were also deposited in C. C. and Current Account of the firm with Union Bank of India and the same cannot be added under section 69A of I. T. Act as unexplained money. 6. The Ld. C.I.T. (A) erred on facts and in law in not considering that out of the total deposit of Rs.1,22,81,670/-, the deposits / Credits of Rs.24,55,176/- were contra entries being amount transfer from one bank to another bank and also entries of cheque reversals which cannot be added under section 69A of I. T. Act as unexplained money. 7. That the Authorities below erred on facts and in law in not considering that the deposits / credits of Rs.10,82,312/- made in Union Bank of India, current account no. 555001010050299 in the name of M/s Yadav & Sons is the Proprietorship Account of Mrs. Nitu Singh (wife of Assessee) and thus the deposits made in Third Party Account cannot be treated as Unexplained Money of Assessee u/s 69A of I.T. Act. 8. That the Authorities below erred in not considering that Smt. Nitu Singh and Proprietor of M/s Yadav & Sons is separately assessed to tax deriving Income from Sale of Maurang and Gitti. 9. That the Authorities below erred on facts and in law in adding the entire credits in the Bank Accounts as Unexplained Money u/s 69A of I. T. Act are subsequent without considering that after deposits there withdrawals and the deposits were the I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 4 business Receipts of the Firm M/s M. R. Brick Field and thus N. P. Rate should have been applied on the Business Receipts from the sale of Bricks. 10. That the Authorities below erred in not considering that there was a reasonable cause for not filing of Return for A. Y. -2017- 18 as the accountant of the Assessee did not submit the details to the Counsels for Tax Filing and the assessee was under the bonafide belief that the Return has been filed. 11. The addition upheld is highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. C.I.T. (A).” I.T.A. No.213/Lkw/2023 “1. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in passing the order, which is unlawful, unjustified and against the principles of natural justice. 2. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in passing the order without giving adequate opportunity of being heard. 3. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in confirming the addition of Rs.59,95,560/- u/s 69A of Income-tax Act. 4. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in confirming the addition of Rs.3,70,74,178/- u/s 69A of Income-tax Act. 5. The Ld. Commissioner of Income-tax (Appeals) has erred in law and on facts in passing the appellate order which is contrary to the facts and law.” (B.1) Both these appeals have been filed beyond the date prescribed u/s 253(3) of the Income Tax Act, 1961 (“IT Act” for short). The appellant assessees have filed applications for condonation of delay. In both the cases, condonation of delay in filing of the appeal has been requested on I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 5 the ground that the impugned appellate orders passed by the respective learned Commissioners of Income Tax (Appeals) were sent on e-mail address which did not belong to the assessees. At the time of hearing, the learned Authorised Representatives of appellant assessees further submitted that the assessees were advised rest because of medical reasons, for which relevant evidence, by way of affidavit/medical certificate, is on record. The learned Departmental Representatives for Revenue did not express any objection to assessees’ requests for condonation of delay in filing of these appeals. Accordingly, no adverse view is being taken on grounds of limitation; and delay in filing of these appeals is hereby condoned. The appeals are admitted for decision on merits. (C) On merits, learned Authorised Representatives for the assessees drew our attention to the fact that the assessment orders as well as the impugned appellate orders, passed by respective Commissioners of Income Tax (Appeals), are ex-parte orders passed without any participation by the respective assessees and without any inputs from the assessees’ side. They further submitted that the appellant assessees were denied reasonable opportunities during assessment proceedings, as well as during appellate proceedings before the respective Commissioners of Income Tax (Appeals). The learned Authorised Representatives for the assessees as well as the learned Departmental Representatives for Revenue were in agreement at the time of hearing before us that the impugned appellate orders passed by the respective Commissioners of Income Tax (Appeals) should be set aside and the issues in dispute should be restored to the files of the respective Assessing Officers with the direction to pass de novo assessment orders in accordance with law after providing reasonable opportunities to the respective assessees. In view of the foregoing, we restore both the impugned appellate orders in these appeals before us and we set aside the I.T.A. No.118 & 213/Lkw/2023 Assessment year:2017-18 6 issues in dispute in the two appeals to the files of the respective Assessing Officers, with the direction to pass fresh assessment orders in the case of the respective assessees in accordance with law, after providing reasonable opportunities to the respective assessees. All grounds of appeal in these two appeals are treated as disposed of in accordance with the aforesaid directions. (D) In the result, both the appeals are partly allowed for statistical purposes. (Order pronounced in the open court on 20/10/2023) Sd/. Sd/. (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) Judicial Member Accountant Member Dated:20/10/2023 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Assistant Registrar
