Mr. Anil Ananda Pokharnikar, Pune V. The Income Tax Officer, Ward 10(3), Pune

ITA 355/PUN/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6183 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-06-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 21-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN BHARATI
• Assessee Lawyers: PRASHANT MUNOT
• Keywords: Reopening of assessment; Unexplained cash credit; Business income; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Competent authority
• Section: 147; 68; 69; 148; 263; 271(1)(c); 144; 133(6); 143(2)

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.355/PUN/2024 धििाारण वर्ा / Assessment Year : 2011-12 Mr. Anil Ananda Pokharnikar, S. No. 135, Patanjali Chikitsalya- Gurukrupa Agency, Near Sai Mandir, Mohan Nagar, Chinchwad, Pune-411019 PAN : AANPP9295K Vs. The Income Tax Officer, Ward – 10(3), Akurdi, Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Prashant Munot Department by : Shri Pawan Bharati Date of hearing : 20-06-2024 Date of Pronouncement : 28-06-2024 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 29.12.2023 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2011-12. 2. The assessee has raised the following grounds of appeal:- “A) Validity of the First Appeal Order confirming the Assessment Order, which no longer survives-in-law : 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) ["CIT(Appeals)"] erred in confirming the Assessment Order passed u/s.144 read with sec.147 of the Act, which was already set aside by the learned Principal Commissioner of Income Tax, Pune-3, exercising Revisionary powers under section 263 of the Income Tax Act, 1961 [in short "the Act"] vide Revision Order dated 31.03.2021. B) Validity of Reopening of Assessment: 2. On the facts and circumstances of the case and in law, the recording of the reasons, approval/sanction granted by the competent authority, issue of Notice u/s.148 of the Act and the reopening of the assessment by the learned Assessing Officer as confirmed by the learned CIT (Appeals) was invalid, void ab-initio and bad in law and was without having any reasons to believe on the part of the learned Assessing Officer. 2 ITA No.355/PUN/2024, AY 2011-12 C) Validity of Assessment - Proceedings conducted without issuance of Notice u/s. 143(2) of the Act: 3. On the facts and circumstances of the case and in law, the assessment proceedings conducted and the impugned assessment order passed by the learned Assessing Officer without issue of assessment notice u/s. 143(2) of the Act, was invalid, void ab-initio and bad in law. D) Validity of Additions made u/s.69 of the Act: 4. On the facts and circumstances of the case and in law : i) the learned CIT (Appeals) erred in confirming the action of the learned Assessing Officer in issuing a Show Cause notice which in itself suffered from grave legal infirmities, was erroneous, defective, invalid and bad in law. ii) the learned CIT (Appeals) erred in confirming the Assessment Order making additions as unexplained investment u/s. 69 of the Act, travelling beyond the show cause notice issued alleging unexplained cash credit invoking section 68 of the Act. 5. Without anyway admitting the impugned additions and without prejudice to other grounds herein, the learned CIT (Appeals) erred both on facts and in law, in confirming the additions made by the learned Assessing Officer is] s.69 of the Act without satisfying the pre- conditions' therein, which in-itself was illegal, invalid and bad in law. E) On Merits : Incorrect additions made in the Assessment: Without prejudice to other grounds herein and without admitting any additions whatsoever, 6. The learned Assessing Officer erred both on facts and in law, in making additions of Rs.67,08,700/- as unexplained investment u/s. 69 of the Act and the learned CIT (Appeals). erred in confirming the action of the learned Assessing .Officer, failing to appreciate that in the facts and circumstances of the case, only the net cash deposits in bank account of the assessee ought to be treated as business turnover and only the profit element therein, ought to be treated as business income of the assessee. 7. The learned CIT (Appeals) erred both on facts and in law, in confirming the impugned assessment order making additions as unexplained investment is] s.69 of the Act, failing to appreciate that the assessee was engaged in Business as a Retailer and thus ought to have been assessed u/s.44AD of the Act. F) Non Speaking, arbitrary & mechanical Order and Violation of Principles of Natural Justice: 8. The learned CIT (Appeals) erred both on facts and in law, in confirming the action of the learned Assessing Officer in making additions without issuing any show cause notice and/or without granting any opportunity of hearing for the allegations/grounds based on which the additions were ultimately made in the assessment order. 9. The learned CIT (Appeals) erred both on facts and in law, in passing an mechanical ex-parte adverse appeal order confirming the additions made by the learned Assessing Officer, failing to appreciate the facts and circumstances of the case and the correct legal position in its 3 ITA No.355/PUN/2024, AY 2011-12 proper perspective and without adjudicating on the grounds of appeal and submissions put forth by the appellant and in violation of the principles of natural justice, thereby rendering the order void ab-intio, perverse and bad in law. G) Initiation of Penalty Proceedings: 10. The learned CIT (Appeals) erred both on facts and in law, in confirming the action of the learned Assessing Officer in initiating penalty proceedings u/s. 271(1)(c) of the Act. H) Common Legal Ground supporting all aforesaid Grounds of Appeal: 11. The learned CIT (Appeals) erred both on facts and in law, in confirming the assessment order passed by the learned Assessing Officer assessing the Income of the Appellant at Rs.67,08,700/- as against the Returned Income of Rs.324,000/- filed in response to Notice u/s.148 of the of Act. 12. In any view of the matter and in any case, the invocation of jurisdiction under sec.147-148 of the Act, reopening of the assessment; the assessment proceedings conducted in furtherance thereof; and the impugned assessment order passed by the learned Assessing Officer and confirmed by the learned CIT (Appeals), all were contrary to the law, facts and circumstances of the case and were otherwise bad in law. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal and/ or to adduce and rely upon such further evidence/additional evidence and/ or documents as may be required at any time before and during the time of hearing.” 3. It is a case of assessment framed u/s 144 of the Income Tax Act, 1961 (the “Act”). From the NMS cycle received through i-taxnet system & ITS data details it was found that during the previous year relevant to AY 2011-12 the assessee had deposited cash of Rs.18,96,000/- in his saving bank account of Thane Janata Sahakari Bank Ltd. Since the assessee had not filed his return for AY 2011-12, notice u/s 148 of the Act was issued on 28.03.2018 which was duly served upon the assessee. For lack of compliance in response thereto as also to the show cause letter and after obtaining information u/s 133(6) of the Act from the said bank that during the year the assessee had deposited total cash of Rs.67,08,700/- in his bank account, the Ld. Assessing Officer (“AO”) added the same to the income of the assessee u/s 69 of the Act and completed the assessment ex- parte on total income of Rs.67,08,700/- on 26.12.2018 u/s 144 r.w.s. 147 of the Act. 4. The assessee challenged the ex-parte order before the Ld. CIT(A). Though the appeal was filed late by more than one year, the Ld. CIT(A) 4 ITA No.355/PUN/2024, AY 2011-12 condoned the delay and decided the appeal ex-parte for non-compliance of notice(s) of hearing dismissing the appeal of the assessee. 5. Dissatisfied, the assessee is in appeal before the Tribunal. 6. The Ld. AR submitted it was brought to the notice of the Ld. CIT(A) that the assessee is having reseller business of Patanjali Products. The assessee is from farmer’s family from which nobody is in business. The cash deposited in saving bank account was generated from counter sales. It was urged that one more chance be given to produce the documents. The Ld. AR reiterated the same submissions before us also. The Ld. DR, however, relied on the order of the Ld. CIT(A). 7. We have considered the rival submissions and perused the records. We are of the view that in the interest of justice and fair play, the matter needs to be sent back to the Ld. CIT(A) for deciding the appeal afresh on merits after allowing reasonable opportunity of being heard to the parties. We order accordingly. 8. In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order pronounced in the open court on 28 th June, 2024. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 28 th June, 2024. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune