SURJIT KAUR, JAIPUR V. ITO WARD 4(3), JPR, JAIPUR

ITA 401/JPR/2023

AI Insights

This case involves an appeal by Ms. Surjit Kaur against the order of the National Faceless Appeal Centre (NFAC), which itself arose from an earlier order under section 144 of the Income Tax Act by the ITO, Ward-04(3), Jaipur. The primary contention revolves around the assessment made under section 68 of the Act, which added Rs. 57,22,400 as unexplained cash credit during the demonetization period. The assessee challenged the jurisdiction and the procedural validity of the assessment, claiming a breach of natural justice as adequate opportunities were not provided for compliance. The Tribunal noted the ex-parte nature of the previous assessments and appeals and decided to remand the case for a fresh assessment on merits, emphasizing the need for a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132457 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 11-09-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 29-06-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 68; 144; 142(1)

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh laanhixkslkbZ]U;kf;dlnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 401/JP/2023 fu/kZkj.ko"kZ@Assessment Year : 2017-18 Ms. Surjit Kaur A-70B, Sri Niwas Nagar, Opp. Road No. 6 VKI Area, Jaipur – 302 013 cuke Vs. The ITO Ward 4(3) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADMPK 8374 J vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Mahendra Gargieya, Advocate jktLo dh vksj ls@Revenue by: Mrs. Monisha Choudhary, Addl. CIT lquokbZ dh rkjh[k@Date of Hearing : 12/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27 /09/2023 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 25.04.2023 [here in after (NFAC)] for assessment year 2017-18 which in turn arise from the order dated 13.12.2019 passed under section 144 of the Income Tax Act [ here in after referred as “Act”], by the ITO, Ward-04(3), Jaipur. 2 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR 2. The assessee has marched this appeal on the following grounds:- 1. The impugned order u/s 144 dated 13.12.2019 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence the same may kindly be quashed and in any case, the impugned addition/s be deleted. 2. The Id. AO erred in law as well as on the facts of the case in framing the asst. u/s 144 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order u/s 144 dated 13.12.2019 having been framed in gross breach of natural justice, kindly be quashed. 3.1 Addition of Rs.57,22,400/- as unexplained cash credit: The ld. AO erred in law as well as on the facts of the case in making addition u/s 68 of the Act, of a huge amount of Rs. 57,22,400/- being the credit appearing in bank account during the demonetization period in F.Y. 2016-17. The addition so made by the ld. AO, being totally contrary to the provisions of law and facts of the case, kindly be delete in full. 3.2 The Id. AO further erred in law as well as on the facts of the case in imposing tax 60 percent as per provision of section 115BBE of the Act. The appellant totally denies its liability. The tax liability so created, being contrary to the provisions of law and facts, kindly be deleted in full. 4.1 Rs. 7,50,000/-: The ld. AO erred in law as well as on the facts of the case in invoking Sec.145(3). The provision so invoked being contrary to the provisions of law and facts, the same may kindly be quashed. Consequently, the trading addition made by the Id. AO of Rs. 7,50,000/- may kindly be deleted in full. 4.2. The Id. AO erred in law as well as on the facts of the case in making trading addition of Rs.7,50,000/-. The addition so made being contrary to the provisions of law and facts, the same may kindly be deleted in full. 5. Rs.2,00,000/-: The ld. AO erred in law as well as on the facts of the case in disallowing lump sum expenses of Rs. 2,00,000/- out of various expenses of Rs. 12,06,387/- claimed by the assessee in P and L. The disallowance so made being contrary to the provisions of law and facts, the same may kindly be deleted in full. 6. Rs. 16,69,320/- The Id. AO erred in law as well as on the facts of the case in charging interest of Rs. 1,39,110/- u/s 234A and of Rs. 15,30,210/- u/s 234B. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full.’’ 3. The fact as culled out from the records is that the assessee filed his return of income on 13.01.2018 declaring total income at Rs. 2,58,250/-. The casewas selected for complete scrutiny under manual scrutiny.Thereafter, notice u/s. 3 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR 143(2) of the Act was issued on 29.09.2018 and served upon the assessee. Notice u/s. 142(1) of the aCt dated 05.07.2019 issued to assessee vide which assessee was requested to file details. In compliance assessee has not filed any reply. Again notice u/s. 142(1) of the Act dated 16.10.2019 issued to the assessee fixing the case for hearing on 22.10.2019 but again the assessee has not made any compliance on the given date. Since, the assessee failed to furnish details / information and not given any reply a final show cause notice u/s. 144 along with notice u/s. 142(1) of the Act dated 04.12.2019 was issued to the assessee and served on line vide which assessee was requested to furnish the required information latest by 06.12.2019, otherwise the assessment will be completed based on the material available on record u/s. 144 of the Act. 3.1 The assessee had deposited cash amounting to Rs. 57,22,400/- during the demonetization period in his bank account maintained but the assessee has not filed any explanation. Based on these observation a sum of Rs. 57,22,400/- added as unexplained cash credit u/s. 68 of the Act. 3.2 During the assessment proceeding the ld. AO also noted that the assessee has not maintained / produced any books of accounts and the assessee has not given any details regarding the purchase and sale and relying on the decision of the Rajasthan High Court the ld. AO noted in the absence of stock details lump 4 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR sum addition in the trading result made at Rs. 7,50,000/- was made to cover up the possible leakage. 3.3 The ld. AO noted the assessee in the year under consideration claimed total expenses of Rs. 12,06,387/- in the profit and loss account. As the assessee has not submitted any details lump sum addition of Rs. 2,00,000/- was disallowed out of the said expenses claimed as income of the assessee. 4. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: ‘’ Decision 4.3 During the appellate proceedings, the appellant has not submitted anything in the form of 'Statement of Facts'. After that neither she has replied to hearing notices nor submitted any documentary evidence/information to prove her side. Sufficient and adequate opportunities were afforded to the appellant as indicated at page no.2, para 3. No reply whatsoever has been submitted by the appellant. Even the assessment was completed under Section 144 of the Income Tax Act, 1961 due to non-compliance on the part of the appellant. It can be safely presumed that the appellant is not interested in pursuing his appeal. Therefore, the undersigned sees no reason to interfere with the order of the Assessing Officer. Thus, the appeal raised by the appellant is dismissed.’’’ 5. As the assessee did not receive any favour from the appeal filed before the ld. CIT(A), the present appeal is filed by the assessee. The ld. AR appearing on behalf of the assessee submitted that the assessment order as well as the appeal 5 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR before the ld. CIT(A) is ex-parte. Though the assessee does not seem serious before the lower authority in submitting the details on merits yet she, if given a chance, can submit all the details so as compute the correct income against the high pitched assessment order and considering the fact that the assessee being lady may be given a chance put forward her case on merits. 6. The ld DR is heard who relied on the findings of the lower authorities and submitted that the assessee is not serious in taking the legal remedy available with her seriously and there is no merit in granting the second round to the assessee and if given the assessee should bear the cost of the time lapse in dealing such appeal and assessment proceeding. 7. We have heard the rival contentions and perused the material placed on record. The bench noted that the order of the assessment was passed ex-parte. The assessee preferred an appeal before the ld. CIT(A) who has dismissed appeal ex-parte and without dealing with the merits of the case, though assessee was given four opportunity of being heard. Before us the ld. AR appearing on behalf of the assessee submitted that the assessee being lady has reason for such ex-parte order stating that due to lockdown on account of pandemic covid 19 she could not attend and submit the details. The ld. AR thus, prayed that if given a chance she will explain all the issue related to the assessment of income. Thus, based on these arguments the bench feels that if given a chance the assessee can 6 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR demonstrate the merits of the case. Based on the contentions and ongoing through the orders of the lower authorities we find force in the arguments advanced by the ld. AR of the assessee. Based on that set of facts, we are of the considered view that the assessing officer should hear the assessee’s submission on merits after affording proper opportunity of being heard and pass speaking order in the matter, therefore, the matter is set aside to the file of the learned assessing officer with a direction to hear the case on merits after affording a reasonable opportunity of being head to the assessee. At the same time assessee is directed to represent and present all the facts before the assessing officer and should not ask for the adjournment on frivolus grounds. At this stage we remand back the issues raised without commenting upon the merits of the case and the ld. AO is directed to complete the assessment in accordance with the law. 7.1 The above direction of the bench is subject to the condition that that assessee has to deposit a cost of Rs. 2,500/- to the account of the Prime Minister Relief Fund. As a cost towards the non-compliance made so far by the assessee in the proceeding before the lower authority. This amount is to be deposited by the assessee within 30 days from the receipt of the order and then after payment of the cost the assessee may contact the ld. AO for further compliance of this order. 7 ITA NO.401/JP/2023 MRS.SURJIT KAUR VS ITO, WARD 4(3), JAIPUR 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court 27 /09/2023. Sd/- Sd/- ¼lanhi xkslkbZ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 27 /09/2023 Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Mrs. Surjit Kaur, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward 4(3), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No.401/JPR/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar