Narpat S. Rajpurohit, Silvasa V. Principal Commissioner of Income Tax, Valsad

ITA 416/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0988 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 28-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 263; 143(3); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No. 416/SRT/2018 Ǔनधा[रणवष[/Assessment Year: (2013-14) (Virtual Court Hearing) Narpat S. Rajpurohit, F-207, Rajpurohit Complex, Tokarkhada, Near Telphone Exchange, Silvassa. Vs. The PCIT, Valsad. (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AHEPR3068C Assessee by None. Respondent by Shri H. P. Meena, Sr.DR Date of Hearing 30/08/2022 Date of Pronouncement 12/10/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2013-14, is directed against the order passed by the Learned Principal Commissioner of Income Tax, vide order dated 31.03.2018, passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. Notice of hearing of this appeal was sent to the assessee at the address given by the assessee in Form No.36 and the said notice has not been served. This appeal was listed for hearing before this Tribunal on several times, however assessee did not appear. Today, i.e. on 30.08.2022, when the case was called for hearing, none appeared on behalf of the assessee, nor any request for adjournment was made. Hence, we are of the view that assessee is not interested to prosecute this appeal. Therefore, we have heard Learned Departmental Representative (Ld. DR) for the Revenue and perused the order passed by the Ld. PCIT under section 263 of the Act and proceed to express our opinion of the issue under consideration. Page | 2 ITA 416/SRT/2018/AY.2013-14 Narpat. S. Rajpurohit 3. In this appeal, the assessee has challenged the correctness of the order passed by the ld PCIT, under section 263 of the Act. 4. We have gone through the entire order of Ld. PCIT and observed that ld PCIT has noted the following important facts, which are reproduced below: “2. In this case, the assessee filed his return of income on 30.09.2013 declaring total income of Rs.11,03,160/-. The assessment u/s. 143(3) was completed on 22.01.2016 at total income of Rs.11,03,160/-. 3. Examination of the assessment records in this case shows that the assessment order framed by the Assessing officer i.e. ITO, Silvassa Ward, Silvassa, suffers from the certain mistakes/defects rendering the order erroneous as well as prejudicial to the interest of revenue: 5. Therefore, a notice u/s. 263 dated 07.04.2017 was issued to the assessee fixing the date of hearing on 26.04.2017 at 1.00 P.M. The notice was served on the assessee. For the sake of reference, the said notice u/s. 263 dated 07.04.2017 is reproduced hereunder which make it not only erroneous but also prejudicial to the interest of revenue. "No. Pr.CIT/VLS/HQ./Notice/NSR/263/2017-18 Date:-07.04.2017 To, Narpat S. Rajpurohit F-207, Rajpurohit Complex, Tokarkhada, Near Telephone Exchange, Silvassa. Sub: Notice u/s. 263 of I. T. Act, 1961 in your case for A. Y. 2013- 14-reg. Please refer to the above. 2. In this case, the assessee filed his return of income on 30.09.2013 declaring total income of Rs.11,03,160/-. The assessment u/s. 143(3) was completed on 22.01.2016 at total income of Rs.11,03,160/-. 3. Examination of the assessment records in this case shows that the assessment order framed by the Assessing officer i.e. ITO, Silvassa Ward, Silvassa, suffers from the following mistakes/defects rendering the order erroneous as well as prejudicial to the interest of revenue: (i) The case was selected for scrutiny under CASS due to following reasons: a) Large investment in property as compared to total income. b) Capital gains considerations in ITR is less than sale of property reported in AIR. c) Large Cash deposits. (ii) Perusal of the assessment records shows that the AO has not made requisite inquiries on any of these 3 issues despite having raised questions vide his letter dated 01.10.2015 (Question no.4,5,and 6). In response to this letter the assessee Page | 3 ITA 416/SRT/2018/AY.2013-14 Narpat. S. Rajpurohit has made submissions vide letter dated NIL submitted before the AO on 10.12.2015. There is no indication of any inquiry having been made by the AO about any of these details. The reply given by the assessee regarding sale and purchase of immovable property as mentioned in para.4 of this letter and para.5 of this letter regarding explanation for the source of the cash deposited mandated further inquiries by the AO particularly keeping in view that the answers given by the assessee in these two paras are such that they required further verification/inquiry by the AO. The claim made by the assessee that he was only a confirming party creates a suspicion about the genuineness of the claim because of the possibility of the transaction having been made without actually becoming the purchaser/seller and at the same time being beneficiary of the gains resulting from such transactions. Similarly, the explanation for the cash deposited i.e. the cash was withdrawn and re-deposited by the assessee, is not acceptable by any reasonable person unless there are special/specific circumstances warranting such an unusual conduct on the part of the assessee. Further, only the amount of cash withdrawn and deposited does not explain the day to day cash balance with the assessee for making such deposits. The AO has not done the plus-minus arithmetic calculations and has instead accepted the assessee's claim without any inquiry whatsoever. Regarding the 3 rd issue i.e. large investment in property which was also one of the reasons for the case's selection under scrutiny, there is nothing in the assessment records suggesting any inquiry whatsoever by the AO. The only cryptic answer given by the assessee on this issue is that 'two lands have been purchased in Silvassa'. There is no further query raised by the AO about the sources of funds which have gone into the purchase of these lands. (iii) The balance-sheet of the assessee, among other things, shows that the assessee has taken unsecured loans of Rs.97.45 lakhs besides secured loan of Rs.8.62 lakhs. The sundry creditors of Rs.7,00,000/- without any name of the party etc. The AO has not examined this issue. There is no confirmations asked for the sundry creditors of Rs.7,00,000/-. Even the name of the party is not available. The unsecured have been taken from 13 parties. The loan confirmations filed by the assessee in respect of these cash creditors/lenders show the following defects/deficiencies which make the so-called loan confirmations invalid: d) Gopidevi Rajpurohit (Rs.9,92,170/-). The loan confirmation has no address on it. e) Raghay Corporation (Ashwini Ji) (Rs.11,00,000/-). The loan confirmation has no address on it. f) Babulal Rakholi (Rs. 3, 00,000/-). This confirmation shows that there is no addreess mentioned on the loan confirmation and the confirmation, it is seen, has been signed by some 'Singh' and not the lender. 3) Ashwini Santkumar Agarwal (Rs.15,00,000/-). The loan confirmation has no address, h) Babuji Rajpurohit (Rs.5,00,000/-). The loan confirmation has no address on it. i) Nibji Rajpurohit (Rs.90,000/-). The loan confirmation has no address on it. j) Jethu Singh (Rs.5,00,000/-). The loan confirmation has no address on it. Page | 4 ITA 416/SRT/2018/AY.2013-14 Narpat. S. Rajpurohit k)Rakesh Parmar (Rs.10,00,000/-) The loan confirmation has no address on it. Further, the confirmation has not been signed by the lender or his authorized representative. So it is not a confirmation at all in the eyes of law. 1) Unistar Trading Company Pvt. Ltd. (Rs.21, 00,000/-). The loan confirmation has no address on it. m) Dariya Devi (Rs.63,000/-). The loan confirmation has no address on it. n) Manju Devi (Rs.5,50,000/-). The loan confirmation has no address on it and also no PAN. o) Kamla Devi (Rs. 9,02,703/ -). The loan confirmation has no address on it and also no PAN. Further, the copy of bank statement enclosed with all these confirmation is that of the bank account of the assessee showing the deposit of the loans taken. No bank statements indicating the sources of funds by any of the lenders has been obtained. One wonders as to what is the purpose of the AO obtaining and keeping on record the bank statement of the assessee's own bank account while verifying the sources of funds in the hands of lenders /cash creditors. The AO, it appears, has not even bothered to have a look at what was being filed before him in the name of loan confirmations and sources of funds for these unsecured loans. These documents speak for themselves. They only tell the story of AO's cavalier approach and total callousness to his work for the reasons not far to seek. 3. Therefore, in view of the above, the order of the AO is erroneous as well as prejudicial to the interest of revenue on account of complete absence of requisite inquiries in respect of any of the above mentioned issues mandated by the facts and circumstances of the case. 4. In view of the above, the assessment order dated 22.01.2016 passed by the AO i.e. ITO, Silvassa Ward, Silvassa is both erroneous as well as prejudicial to the interest of revenue because of the AO having not made even minimum required requisite enquiries which were needed to be made in the facts and circumstances of the case. 5. You are, therefore, required to show-cause as to why the said assessment order be not revised by invoking the provisions of 263 of I.T. Act, 1961. The hearing in your case is being fixed on 26.04.2017 at 01.00 PM. Please note that the required details should be submitted after numbering the documents enclosed and indexing the same in the forwarding covering letter. 6. You can attend the hearing either personally or through your duly authorized representative or can file written submissions on or before the stipulated date and time of hearing.” 5. The assessee filed reply in response to the above show-cause notice. However, ld PCIT has issued other show cause notices also, against which assessee did not appear. The ld PCIT noted that there is no merit in the reply of the assessee. Therefore, ld PCIT held that it is prima facie proved that the assessment order dated 22.01.2016 u/s 143(3) has been passed by the AO without Page | 5 ITA 416/SRT/2018/AY.2013-14 Narpat. S. Rajpurohit making any inquiries whatsoever in respect of the issues as mentioned in the show-cause notice, hereinabove. Therefore, the assessment order of the AO dated 22.01.2016 was set-aside by ld PCIT on the issues as mentioned in the show- cause notice, hence ld PCIT directed the AO to make fresh assessment after giving proper opportunity to the assessee. 6. Aggrieved by the order of ld PCIT, the assessee is in appeal before us. We have gone through the order of Ld. PCIT, and observed that there is no any infirmity in the conclusion reached by him. In the absence of active assistance of assessee, we cannot interfere in the conclusion reached by ld PCIT. Based on the material available before us, we are of the view that order passed by the Ld. PCIT is in accordance with law. Therefore, we uphold the order of ld PCIT and dismiss the appeal of the assessee. 7. In the result, appeal filed by the assessee is dismissed. Order is pronounced in the open court on 12/10/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 12/10/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat