BHANU TEJA BADE, MACHILIPATNAM V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), VIJAYAWADA

ITA 255/VIZ/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9663 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 28-11-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 15-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 144; 143(1); 143(2)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM (through web-based Hybrid Hearing platform) श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.255/Viz/2023 (ननधधारण वर्ा / Assessment Year : 2015-16) Bhanu Teja Bade D.No.2/451, Desaipeta Machilipatnam [PAN : BZIPB9626D] Vs. Asst.Commissioner of Income Tax Circle-1(1) Vijayawada (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri Siva Ram Kumar, AR प्रत्यधथी की ओर से / Respondent by : Shri Madhukar Aves, DR सुनवधई की तधरीख / Date of Hearing : 29.11.2023 घोर्णध की तधरीख/Date of Pronouncement : 05.12.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1055278557(1) dated 21.08.2023, arising out of order passed u/s 144 of the Income Tax Act, 1961 (in short ‘Act’) dated 30.11.2017 for the Assessment Year (A.Y.) 2015-16. 2 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam 2. Brief facts of the case are that the assessee is an individual and retail trading in wine shop, filed his return of income for the A.Y.2015-16 on 02.10.2015, admitting an income of Rs.16,01,720/-. The return was processed u/s 143(1) on 17.10.2015. Subsequently, the case was selected for scrutiny under CASS to examine mismatch in sales turnover and cash deposits. Accordingly, notices u/s 143(2) of the Act dated 28.09.2016 and 142(1) dated 29.05.2017 was issued and served on the assessee. Opportunity of being heard was issued to the assessee on 31.07.2017 and served on the assessee on 03.08.2017. However, the assessee did not respond to the notices. On perusal of the information in AIR Transactions, it was observed by the Assessing Officer (AO) that the assessee made cash deposits of Rs.1,54,72,970/- with IDBI bank, Machilipatnam. Accordingly show cause notice dated 27.10.2017 was issued, calling for information about the nature and sources for cash deposits made. But the assessee did not respond to the show cause notice and also to the notices issued u/s 143(2) and 142(1), therefore, pre- assessment notice u/s 144 dated 22.11.2017 was issued calling upon the assessee why assessment should not be completed based on the material available on record. Since there was no response from the assessee for the pre-assessment notice also, the AO treated the deposits of 3 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam Rs.1,54,72,970/- made in IDBI bank as income of the assessee from unexplained sources for the A.Y.2015-16 and brought to tax. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee ex-parte. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by making the following grounds of appeal : 1. In the facts and circumstances of the case, learned CIT(Appeals) erred in confirming the addition of Rs.1,54,72,970/- as unexplained cash deposits since the appellant carried on retail business in wines in the previous year and reported a turnover of Rs.4,05,22,256/- via his Tax Audit Report and ITR filed, whereas the cash deposits were sourced from his sales reported in the ITR filed. 2. In the facts and circumstances of the case, learned CIT(Appeals) erred in dismissal of the appeal for mere non- prosecution and without going into the merits of the case. The appellant’s total income returned was more than 5% of the stocks put to sale which was held fair reasonable by the coordinate bench of the Hon’ble ITAT. 3. The appellant’s counsel’s grave mistake in non-mention of the Statement of Facts and Grounds of Appeal in Form 35 was rectified by filing a humble petition dt.16.9.2019 before the learned CIT(Appeals), Vijayawada taking additional Grounds of Appeal and filed additional evidence (as per the self-certified copy attached) and hence the same would have been considered by the learned CIT(Appeals) and dispose of the appeal on merits. 5. The only grievance of the assessee is that the assessee was not given opportunity of being heard before the Ld.CIT(A) and the Ld.CIT(A) 4 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam is not justified in dismissal of the appeal for mere non-prosecution and passed order without going into the merits of the case. The assessee filed paper book before the Tribunal and submitted that the reason for non- prosecution was due to the prolonged medical treatment for depression. The assessee filed profit and loss account, cash book and statement of bank account and the Ld.AR submitted that the assessee had adequate cash balance to deposit cash as per his books as on the date of announcement of demonetisation period and subsequent cash deposits after 8.11.2016 and submitted that the cash deposits before 31.12.2016 were made out of cash sales recorded in the books and the Trading and P&L account. The Ld.AR further submitted that the assessee filed additional grounds of appeal and Rule 46A petition along with supporting evidences before the CIT(A), Vijayawada, but the same was not considered by the Ld.CIT(A). Hence, pleaded before us that he may be given opportunity of being heard before the Ld.CIT(A) to substantiate his case, which would otherwise cause severe hardship, gross injustice and irreparable financial injury to the assessee. 6. Per contra, the Ld.DR submitted that the assessee was given reasonable number of opportunities before the Ld.CIT(A), but the assessee has not availed the opportunities. Hence, the Ld.CIT(A) is 5 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam justified in dismissing the appeal of the assessee. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material placed on record. It is undisputed fact that the assessee is the business of wine shop trading and made cash deposits of Rs.1,54,72,970/- during the impugned A.Y.2015-16. It is observed from the records that the assessee was given reasonable number of opportunities to explain sources for the cash deposits made, but the assessee did not respond to the notices. The onus is on the assessee to explain and prove the sources of cash deposits with verifiable evidences, otherwise, it is not possible to presume that the cash deposits made in the bank accounts were out of sale proceeds of wine shop. The assessee filed paper book before the Tribunal and submitted that the reason for non prosecution of the appeal was due to prolonged medical treatment for depression. The assessee submitted medical certificate in support of the same. The Ld.AR further submitted that the grounds of appeal and the additional evidence filed before the CIT(A) was not considered by the Ld.CIT(A). The assessee filed an affidavit before the Tribunal in support of the petition for admission of additional evidence. The Ld.AR pleaded before the Tribunal that the appeal may be 6 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam remitted back to the file of the CIT(A), NFAC for consideration of the Grounds of Appeal and the additional evidence and pass suitable order on merits. Keeping in view the facts and circumstances of the case, in order to meet principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) to afford another opportunity of being heard to the assessee, examine the additional evidence filed by the assessee and pass order accordingly. The assessee is also directed to adhere to the notices issued by the revenue authorities and furnish information sought with verifiable evidences to substantiate his case. Hence, the grounds raised by the assessee are allowed for statistical purpose. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 5 th December, 2023. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 05.12.2023 L.Rama, SPS 7 I.T.A. No.255/Viz/2023, A.Y. 2015-16 Bhanu Teja Bade, Machilipatmam आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Shri Bhanu Teja Bade, D.No.2/451, Desaipeta Machilipatnam 2. रधजस्व/The Revenue – The Asst.Commissioner of Income Tax, Circle- 1(1), Vijayawada 3. The Principal Commissioner of Income Tax, Vijayawada 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam