Arvindbhai Maganbhai Patel, Mehsana V. The Income Tax Officer, Patan Ward-5, Mehsana

ITA 379/AHD/2022

AI Insights

The appeals involve Arvindbhai Maganbhai Patel, an agriculturist and trader of potato seeds, contesting additions made to his income assessments for the years 2009-10 and 2011-12, and a penalty for the same years. The Income Tax Officer had added amounts to the assessee's income based on unexplained cash deposits in his bank accounts, which the assessee claimed were proceeds from agricultural sales. The Commissioner of Income Tax (Appeals) upheld these additions, leading to the current appeals. The Tribunal noted that the assessee was unable to present his case effectively due to medical issues and advised negligence by his tax consultant, leading to the decision to remand the cases for a thorough re-assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129754 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 21-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 03-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 144

Judgement Text

ITA Nos.378, 379 & 380/Ahd/2022 A.Ys. 2009-10, 2011-12 & 2011-12 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA Nos.378, 379 & 380/Ahd/2022 Assessment Years: 2009-10, 2011-12 & 2011-12 Arvindbhai Maganbhai Patel, vs. Income Tax Officer, 8, New Vandana Park Society, Ward – 5, Patan, Mehsana. Madhi Ashram Road, Vijapur, Dist. Mehsana – 382 870. [PAN – ARFPP 1167 P] (Appellant) (Respondent) Assessee by : Shri A.C. Shah, AR & Shri Bhadresh Gandhakwala, AR Respondent by : Shri Anand Kumar, Sr. DR Date of hearing : 22.12.2022 Date of pronouncement : 04.01.2023 O R D E R These three appeals are filed by the Assessee against three different orders, dated 29.08.2022, 08.09.2022 & 29.08.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Years 2009-10, 2011-12 & 2011-12 respectively. 2. The grounds of appeals are as under: :- ITA No.378/Ahd/2022 – A.Y. 2009-10 “1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs.16,38,500/- on the ground of cash deposits in the bank account and also on the ground that the assessee has failed to comply with any of the notices issued. 2. The cash deposit of Rs.16,38,500/- in the bank account represents the sale proceeds of potato grown by him.” ITA Nos.378, 379 & 380/Ahd/2022 A.Ys. 2009-10, 2011-12 & 2011-12 Page 2 of 4 ITA No 379/Ahd/2022 – A.Y. 2011-12 “1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the reopening of the assessment for A.Y. 2011-2012 on the ground that the assessee has not disclosed the deposits with the bank account in as much as the assessee has now disclosed everything and that the assessee is agriculturist, therefore, there is no escapement of income. 2. The learned CIT(A) has erred in confirming the order under Section 144 and thereby has erred in making addition of Rs.19,02,346/- being deposits in the bank account in as much as the deposits represent the sale proceeds of potato, kapas and other agriculture produce and that the income is agricultural income which is not subject to income tax. 3. The appellant says and submits that the assessee was suffering from brain problem from July 2012 and that since from that date till today the assessee is not cured and therefore the assessee was practically bedridden and therefore there was noncompliance of the notices issued. ITA No.380/Ahd/2022 – A.Y. 2011-12 “1. The learned Commissioner of Income Tax (Appeals) has erred in confirming the penalty of Rs.4,84,930/- on the ground that the cash deposits of Rs.19,00,000/- is made in the bank account and on account of interest from bank account as unexplained deposit and income in as much as the assessee is agriculturist and that the cash deposits represent the agricultural income which is not taxable and therefore the penalty levied is not proper. 2. The ITAT has set aside the quantum order for A.Y. 2010-2011 and therefore the question of levy of penalty for A.Y. 2011-2012 does not arise. 3. The assessee is an agriculturist and engaged in the business of trading of potato seeds. The assessee did not file return of income for the A.Y. 2009-10 as well as A.Y. 2011-12. The Assessing Officer had issued notice under Section 148 of the Income Tax Act, 1961. During the course of assessment, the Assessing Officer made addition of Rs.16,38,500/- on account of cash deposit into bank account of the assessee. The Assessing Officer passed order under Section 144 read with Section ITA Nos.378, 379 & 380/Ahd/2022 A.Ys. 2009-10, 2011-12 & 2011-12 Page 3 of 4 147 of the Act and made addition of Rs.16,38,500/- and levied penalty under Section 271(1)(c) in A.Y. 2009-10. In A.Y. 2010-11 the Assessing Officer passed assessment order under Section 144 read with Section 147 of the Act thereby making addition of Rs.19,00,000/- in respect of cash deposits in bank account and addition of Rs.20,346 as undisclosed interest income. 4. Being aggrieved by the assessment order, the assessee filed appeal in A.Y. 2009-10 and 2011-12 before the CIT(A). The CIT(A) dismissed the appeals. 5. Ld. AR submitted that due to the medical exigencies the assessee could not attend the proceedings before the CIT(A) and the order passed by the CIT(A) is ex- parte. The Ld. AR further submitted that the Assessing Officer due to negligence on the part of the Tax Consultant the assessee could not produce evidences before the Assessing Officer and the order is passed under Section 144 read with Section 147 of the Act. Thus, the Ld AR prayed that the matter may be remanded back to the file of the Assessing Officer for proper adjudication after giving fair opportunity of hearing to the assessee. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the material available on record. It is pertinent to note that before the Assessing Officer the assessee was not given proper advice and, therefore, could not contest before the Assessing Officer and was not able to file evidences. Before the CIT(A), the assessee was having a medical exigency for which the Ld. AR has filed the details of medical reports and the diagnosis before the Tribunal. Thus, it will be appropriate to remand back the issues before the Assessing Officer for proper adjudication on merit. Needless to say the assessee be given opportunity of hearing by following the principles of natural justice and the assessee be given opportunity of placing all the information/evidences before the Assessing Officer. Thus, the ITA No.378/Ahd/2022 for A.Y. 2009-10 and ITA No.379/Ahd/2022 for A.Y. 2011-12 are partly allowed for statistical purpose. 8. As regards to ITA No.380/Ahd/2022, the same is related to the penalty for the A.Y. 2001-12 and, therefore, the same may be also remanded back to the file of the ITA Nos.378, 379 & 380/Ahd/2022 A.Ys. 2009-10, 2011-12 & 2011-12 Page 4 of 4 Assessing Officer for proper adjudication, after giving opportunity of hearing to the assessee. 9. In the result, all the three appeals filed by the assessee are partly allowed for statistical purpose. Order pronounced in the open Court on this 4 th day of January, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 4 th day of January, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad