SHRI. RAJESH DHAWAN, FEROZEPUR V. INCOME TAX OFFICER WARD -3 (2), FEROZEPUR

ITA 256/ASR/2019

AI Insights

The case involves an appeal by Sh. Rajesh Dhawan, the proprietor of Aggarwal Agencies, against the orders of the Income Tax Officer, Ward-3(2), Ferozepur, and the Commissioner of Income Tax (Appeals), Bathinda. The primary contention revolves around the protective assessment made by the Assessing Officer concerning a transaction with M/s Ganesh Rice Mills, Muktsar, involving a substantial cash deposit of Rs. 15,54,20,800. The Assessing Officer added this amount to the assessee's income on a protective basis under Section 69 of the Income Tax Act, 1961, despite the substantive assessment being directed at M/s Ganesh Rice Mills. The CIT(A) upheld these additions without a thorough examination of the grounds or facts, leading to the current appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114956 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 21-04-2019
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 69; 143(3); 250

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. No.256/Asr/2019 Assessment Year: 2014-15 Sh. Rajesh Dhawan Prop. Aggarwal Agencies, Ferozepur City. [PAN:ACDPD5655K] (Appellant) Vs. ITO,Ward-3(2), Ferozepur. (Respondent) Appellant by Sh. Ashray Sarna, CA. Respondent by Smt. Balvinder Kaur, CIT. DR Date of Hearing 08.05.2023 Date of Pronouncement 11.05.2023 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals), Bathinda,[in brevity the CIT (A)] order passed u/s 250 (6) of the Income Tax Act 1961[in brevity the Act], for A.Y. 2014- 15.The impugned order was emanated from the order of the ld.Income TaxOfficer, I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 2 Ward-3(2), Ferozepur [in brevity the AO] order passed u/s 143(3) of the Act date of order 27.12.2016. 2. The assessee has taken the following grounds: - “1. The orders passed by the Assessing Officer and Ld. Commissioner of Income Tax (Appeal) vide orders dated 27.12.2016 and 15.02.2019 respectively are illegal, uncalled for and against the law & facts. 2 The Ld. Commissioner of Income Tax (Appeal) has sustained the additions merely on conjectures and surmises without any legal basis. 3. That, the Ld. Commissioner of Income Tax (Appeal) has passed an Ex-parte order and sustained the additions without giving the opportunity of being heard. So the order of Ld. Commissioner of Income Tax (Appeal) should be set aside and calls for fresh adjudication with CIT(A), Bathinda. 4. That, the grounds of appeal raised with the Ld. Commissioner of Income Tax (Appeal) is as (i) The Assessing Officer has made additions of Rs. 15,54,20,800/- merely under protective basis only to protect the interest of revenue not on the legal basis. I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 3 (ii) That the Assessing Officer has himself admitted in his order (Point no. 3 of Assessment Order) that the original beneficiary is M/s Ganesh Rice Mills, Muktsar and appellant is only name to the bank account. In such circumstances, no addition can be made in the hands of appellant and even not on protective basis. (iii) That the Assessing Officer has added the cash of Rs. 15,54,20,800/- in total. Nowhere he has made any cycle of the transactions. This is illegal and Additions in such a way cannot be made. (iv) That the addition of Rs. 1.00 Lac for accommodating the account is wrong as expenses incurred against it, is not reduced. (v) That the Assessing Officer has acknowledged the affidavit of the appellant regarding accommodating account and accepted the affidavit for accommodation transactions. So, additions made may please be deleted. (vi) The assessee craves leave to argue on any other question of law or facts at the time of hearing of this appeal.” I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 4 3. Brief fact of the case is thatthe addition was made by the ld. AO on basis of protective assessment related to transaction with M/s Ganesh Rice Mills, Muktsar, with assessee amount of Rs.15,54,20,800/-. As per the ld. AO, the assessee has opened a bank account deposited cash and issue cheque in favour of M/s Ganesh Rice Mills, Muktsar. Considering the cash deposit in bank account, the entire deposit was added in the hands of the assessee on protective basis U/s 69 of the Act. Though the substantive assessment was framed in the hands of M/s Ganesh Rice Mills, Muktsar. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) passed the ex parte order without considering the fact of the case or grounds of the assessee. Being aggrieved assessee filed an appeal before us. 4. During hearing, the ld. AR filed an affidavit of the assessee which is reproduced as below: I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 5 4.1 The ld. AR prayed for setting aside the matter before the ld. CIT(A) for consideration the matter on merit. 5. The ld. DR vehemently argued and relied on the order of both the revenue authorities. I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 6 6. We heard the rival submission and considered the documents available in the record. The assessee through his affidavit specifically mentioned the reasons of ex parte before the ld. CIT(A). The revenue in the order of assessment had completed the assessment on protective basis. But there is no light about the fate of substantive assessment of the party, M/s Ganesh Rice Mills, Muktsar. The ld. DR has not made any strong objection about the affidavit of the assessee filed before the bench and was not able to enlighten the bench about the current position of substantiveassessment. After considering the submission of the assessee, we remit back the matter to the ld. CIT(A) for denovo adjudication. Needless to say, the assessee should get a reasonable opportunity of hearing during appeal proceeding afresh. 7. In the result, the appeal of the assessee bearing ITA No. 256/Asr/2019 is allowed for statistical purposes. Order pronounced in the open court on 11.05.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant I.T.A. No.256/Asr/2019 Assessment Year: 2014-15 7 (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order