Rajan Diwan, New Delhi V. ITO WARD - 35(2), NEW DELHI

ITA 339/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6633 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH K GUPTA
• Keywords: Unexplained cash credit; Reassessment proceedings; Set aside
• Section: 142(1); 133(6); 143(2); 147; 148; 144

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO . 339 /DEL/20 20 ASSESSMENT YEAR : 20 1 1 - 12 RAJAN DIWAN, 8/4, ROOP NAGAR, NEW DELHI. PAN: A GJPD8675P VS. ITO, WARD - 35 ( 2 ), N EW DELHI. ( APPELLANT ) (RESPONDENT) A SSESSEE BY : SHRI SURESH K. GUPTA, CA RE VENUE BY : SHRI R.K. GUPTA, SR. DR DATE OF HEARING : 02 . 0 8 . 20 21 DATE OF PRONOUNCEMENT : 09 . 0 9 . 20 21 ORDER TH IS APPEAL FILED BY THE ASSESSEE IS DIREC TED AGAINST THE EX PARTE ORDER DATED 2 7.11.2019 OF THE CIT(A) - 12 , NEW DELHI, RELATIN G TO ASSESSMENT YEAR 20 1 1 - 12 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAD FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS.1,60,110/ - . THE AO REOPENED THE CASE OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.16,74,900/ - IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE, JANAK PURI, DELHI. AFTER ANALYZING THE INFORMATION AND MATERIAL AVA ILABLE ON RECORD, THE AO REOPENED THE ASSESSMENT AS PER PROVISIONS OF ITA NO. 339 /DEL/20 20 2 SECTION 147 OF THE IT ACT, 1961 AFTER RECORDING REASONS AND ISSUED NOTICE U/S 148 OF THE ACT DATED 31.03.2018. HOWEVER, NO RETURN OF INCOME WAS FILED IN RESPONSE TO THE NOTICE U/S 148 O F THE IT ACT. THE VARIOUS NOTICES ISSUED U/S 142(1) ALSO REMAINED UNCOMPLIED WITH. THE AO OBTAINED DETAILS OF CASH DEPOSIT IN THE BANK ACCOUNT BY ISSUE OF NOTICE U/S 133(6) OF THE ACT. SINCE THERE WAS NO COMPLIANCE FROM THE SIDE OF THE ASSESSEE TO EXPLA IN THE SOURCE OF SUCH CASH DEPOSIT, THE AO, INVOKING THE PROVISIONS OF SECTION 144 R.W.S 147 OF THE IT ACT, 1961, DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.18,35,010/ - WHEREIN HE MADE ADDITION OF RS.16,74,900/ - U/S 68 OF THE IT ACT TO THE RETURNED INCOME OF RS.1,60,110/ - . SINCE THERE WAS NO COMPLIANCE FROM THE SIDE OF THE ASSESSEE TO THE STATUTORY NOTICES ISSUED BY THE OFFICE OF THE CIT(A), THE LD.CIT(A), IN HIS EX PARTE ORDER, DISMISSED THE APPEAL FILED BY THE ASSESSEE. 3 . AGGRIEVED WITH SUCH ORD ER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS: - 1. THE ASSESSING OFFICER HAS ERRED IN LAW IN COMPLETING THE ASSESSMENT U/S 144 R.W.S 147 WITHOUT ISSUING A NOTICE U/S 143(2) OF THE ACT AGAINST THE RETURN O F INCOME FILED ON 12.11.2018 IN RESPONSE TO NOTICE U/S 148 OF IT ACT ISSUED BY THE AO ON 31.03.2018 AND SUCH NON - COMPLIANCE OF THE ABOVE MANDATORY REQUIREMENT OF LAW TO ISSUE NOTICE U/S 143(2) OF IT ACT AGAINST RETURN OF INCOME FILED MAKES THE RESULTANT AS SESSMENT ORDER IN APPEAL NULL AND VOID - AB - INITIO. 2. THE IMPUGNED ASSESSMENT IS INVALID AND WITHOUT JURISDICTION AS THE SAID ASSESSMENT IS COMPLETED WITHOUT COMPLYING WITH LEGAL REQUIREMENTS OF THE PROVISIONS OF THE INCOME TAX ACT THEREFORE SUCH ASSESSMEN T IS VOID AB INITIO AND LIABLE TO BE QUASHED. 3. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE IT ACT IGNORING THE CONTENTION OF APPELLANT THAT THE PROCEEDINGS HAVE BE EN INITIATED ITA NO. 339 /DEL/20 20 3 BY THE AO WITHOUT APPLICATION OF INDEPENDENT MIND ON THE MATERIAL. IN VIEW OF THE ABOVE DEFECTS IN THE COMPLIANCES THE RESULTANT REASSESSMENT PROCEEDINGS ARE REQUIRED TO BE SET ASIDE. 4. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND IN FACTS OF TH E CASE IN UPHOLDING THE IMPUGNED REASSESSMENT PROCEEDINGS IGNORING THE FACT THAT THE SANCTION U/S 151 OF IT ACT SHOWS MECHANICAL SATISFACTION BY THE PR CIT, NEW DELHI AND SUCH MECHANICAL APPROVAL VITIATES THE REASSESSMENT PROCEEDINGS. 5. THE ASSESSING OFF ICER HAS ERRED BOTH IN LAW AND IN FACTS OF THE CASE IN MAKING ADDITION/S 68 OF THE ACT OF RS. 16,74,900/ - TREATING IT AS UNEXPLAINED CREDITS IGNORING THE FACT THAT THE APPELLANT HAS DULY PROVIDED EVIDENCE AND EXPLANATION IN REGARDING THE SOURCE OF CASH DEP OSIT IN THE BANK ACCOUNT. THEREFORE THE ADDITION MADE BY THE AO IS UNJUSTIFIED, ARBITRARY AND UNSUSTAINABLE. 6. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY / AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HON BLE APPELLATE AUTHORITY. 4. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE VARIOUS ADDITIONS MADE BY THE AO AND UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THE ASSESSEE, IN THE INSTANT CASE, HAS FILED THE R ETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF THE ACT ON 12.11.2018 AND THE SAME FACT WAS ALSO INTIMATED TO THE AO. HOWEVER, THE AO, WITHOUT ISSUING ANY STATUTORY NOTICE U/S 143(2) OF THE ACT, HAS PROCEEDED TO COMPLETE THE ASSESSMENT U/S 144/147 OF THE ACT. HE SUBMITTED THAT THE LD.CIT(A), WITHOUT CONSIDERING THE ABOVE HAS UPHELD THE VALIDITY OF THE REASSESSMENT PROCEEDINGS. SO FAR AS THE CASE OF THE ASSESSEE ON MERIT IS CONCERNED, THE LD. COUNSEL SUBMITTED THAT DESPITE OBSERVING THAT THE ASSESSEE HAS INCOME FROM BUSINESS, THE AO MADE THE ADDITION OF RS.16,74,900/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. HE SUBMITTED THAT THE BANK STATEMENT OF THE ASSESSEE WAS FURNISHED DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, DISREGARDING ALL ITA NO. 339 /DEL/20 20 4 THESE THINGS THE AO MADE THE ADDITION WHICH HAS BEEN SUSTAINED BY THE CIT(A) WHICH IS NOT IN ACCORDANCE WITH THE LAW. HE ACCORDINGLY SUBMITTED THAT BOTH LEGALLY AND FACTUALLY THE ASSESSEE HAS A CASE AND THE APPEAL FILED BY THE ASSESSEE SHOULD BE ALLOWED. 5. THE LD. DR, ON T HE OTHER HAND, SUBMITTED THAT DUE TO NON - COMPLIANCE FROM THE SIDE OF THE ASSESSEE, THE AO HAS PASSED THE ORDER U/S 144 OF THE ACT. DESPITE FIVE OPPORTUNITIES GRANTED BY THE CIT(A), THERE WAS NO COMPLIANCE TO THE NOTICES ISSUED BY THE CIT(A) FOR WHICH HE H AS ALSO PASSED AN EX PARTE ORDER. THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE DO NOT FORM A PART OF THE ASSESSMENT ORDER OR THE CIT(A) S ORDER. HE ACCORDINGLY SUBMITTED THAT THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 6. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND, THE CASE OF THE ASSESSEE WAS REOPENED AS PER THE PROVISIONS OF SECTION 147 AND AFTER RECORDING REASONS ON THE GROUND THAT THE ASSESSEE HAS MADE CASH DEPOSIT OF RS.16,74,900/ - IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE, JANAK PURI AND THE ASSESSEE HAS NOT OFFERED ANY EXP LANATION REGARDING THE SOURCE OF THE SAME. I FIND, IN RESPONSE TO THE NOTICE U/S 148 OF THE IT ACT, THE AO HAS MENTIONED THAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME WHEREAS IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE RETURN O F INCOME WAS ITA NO. 339 /DEL/20 20 5 FILED ON 12.11.2018 IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT. I FIND, THE LD.CIT(A) PASSED THE EX PARTE ORDER ON THE GROUND THAT DESPITE FIVE OPPORTUNITIES GRANTED BY THE CIT(A), THE ASSESSEE DID NOT APPEAR BEFORE HIM TO SUBSTANTIATE HIS C ASE. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THERE WAS NO NOTICE ISSUED U/S 143(2) OF THE ACT BEFORE COMPLETING THE ASSESSMENT U/S 144/147 OF THE IT ACT DESPITE THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT ON 12.11.2018. I FIND, THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE TRIBUNAL WERE NOT SUBMITTED BEFORE THE CIT(A) AND THE CIT(A) HAS PASSED AN EX PARTE ORDER SINCE THE ASSESSEE DID NOT APPEAR BEFORE HIM DESPITE FIVE OPPORTUNITIES GRANTED BY THE CIT(A). CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO G RANT ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE AN D DECIDE THE ISSUE AS PER FACT AND LAW. THE ASSESSEE IS ALSO HEREBY DIRECTED TO APPEAR BEFORE THE CIT(A) WITHOUT SEEKING ANY ADJOURNMENT UNDER ANY PRETEXT, FAILING WHICH , THE LD.CIT(A) IS AT LIBERTY TO PASS APPROPRIATE ORDER AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES . ITA NO. 339 /DEL/20 20 6 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 09 . 0 9 . 20 21 . SD/ - ( R. K. PANDA ) ACCOUNTANT MEMBER DATED: 09 TH SEPTEMBER, 2021. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI