MAQSUD MUSA UGHRADAR, VADODARA V. ITO, BHARUCH

ITA 494/SRT/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4749 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-03-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 18-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings
• Section: 148; 142(1); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 494/Srt/2023 (Assessment Year 2011-12) (Physical hearing) Maqsud Musa Ughradar, Ishakwadi, AT & Post- Valan Ta Karjan, Vadodara-392310. PAN No. ACDPU 1420 F Vs. I.T.O., Ward 1(2), Bharuch Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Krutarth Desai, A.R. with Ms. Disha Kharod, C.A. Department represented by Shri Vinod Kumar, Sr.DR Appeal instituted on 20/07/2023 Date of hearing 12/03/2024 Date of pronouncement 12/03/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 31/05/2023 for the Assessment Year (AY) 2011-12 wherein the assessee has raised following grounds of appeal: “1. ADDITION OF RS. 116584/- 1.1) In the facts and circumstances of the case, the learned assessing officer has erred in taking a view that the sum of Rs 116584/- represents income from other sources without considering the submissions and materials placed on record by the appellant to show that the cash deposit represents the agricultural income. ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 2 2) ADDITION OF RS 877000/- 2.1) In the facts and circumstances of the case, the learned assessing officer has erred in invoking provisions of section 69A of the Income to make addition of Rs 877000/- as unexplained cash without appreciating the fact that appellant is an agriculturist and having only agricultural income, which is exempt from tax and therefore, no addition could be made under the provisions of section 69A of the Income tax Act 1961. 3. The learned assessing officer has erred in arriving to conclusion that the appellant is having only Rs 350000/- as agricultural income and balance Income represents unexplained money without contrary material brought on record and only on the basis of assumptions and surmises. 4. The appellant craves for leave to add or amend or alter any of the grounds of appeal.” 2. Vide application dated 12/03/2024, the assessee has raised following additional grounds of appeal: “1. Whether in the facts and circumstances of the case, whether notice under section 143(2) of the Act is mandatory in nature? In the case of answer of the aforesaid question is yes then whether the present assessment order is required to be quashed and set aside in view of the fact that the notice under section 143(2) has not been issued by the learned assessing officer in reassessment proceedings? 2. Whether reassessment proceedings under section 148 is bad in law where it relates to the grounds that cash has been deposited in the bank account of the appellant?” 3. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the assesse has raised additional grounds of appeal raising objection/grounds that notice under Section 143(2) of the Income Tax Act, 1961 (in short, the Act) was not issued by the Assessing Officer. The additional grounds of appeal raised by the assessee is purely legal in nature. No additional fact is required to be brought on record. The facts regarding adjudication of such issue is emanating/ascertained from ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 3 the record/orders of the lower authorities. To support such contention, the assessee relied upon the decision of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. Vs CIT dated 04/12/1996. On the merit of additional ground of appeal, the ld. AR of the assessee relied upon the decision of Hon'ble Calcutta High Court in Pr.CIT Vs.M/s Eversafe Securities Pvt. Ltd. Tax appeal No. 156/2022 dated 02/01/2023. The ld. AR of the assessee further submits that the assessee was not given fair and reasonable opportunity by the lower authorities. The Assessing Officer made addition on account of cash deposit in bank by taking a view that the complete details were not furnished. The ld. CIT(A) confirmed the action of Assessing Officer in ex parte order without giving any independent finding. The ld. AR of the assessee submits that he has good case on merit on additional ground of appeal and that he has filed details of notices/communication issued by the Assessing Officer through ITBA Portal. The Assessing Officer issued notice under Section 148 of the Act dated 12/04/2018 and notice under Section 142(1) of the Act on 31/07/2018. Even in the entire assessment order, there is no reference if the notice under Section 143(2) of the Act was issued. 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of lower authorities. The ld. Sr. DR for the revenue submits that during the assessment, the ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 4 Assessing Officer issued a number of show cause notice. The assessee failed to furnish complete details in response to such notices. The Assessing Officer in absence of any explanation or evidence has no option except to make addition on account of cash deposits in bank. Again before the ld. CIT(A), the assessee has not made any compliance despite giving more than sufficient opportunity as recorded in para 4 of order of ld. CIT(A). The ld. CIT(A) has no option except to confirm the order of Assessing Officer. On the additional ground of appeal, the ld. Sr. DR for the revenue submits that no such ground of appeal was raised by assessee before the ld. CIT(A) nor any such objection was filed before the Assessing Officer. Mere filing screenshot of ITBA Portal is not sufficient for adjudication of additional ground of appeal. In the screenshot, the notice under Section 148 of the Act is shown to have been issued on 12/04/2018, however, in para 2 of assessment order, the Assessing Officer has clearly recorded that notice under Section 148 of the Act was issued on 28/03/2018. The assessee has not shown any reasonable and plausible explanation for non-appearance before the lower authorities. The ld. Sr. DR for the revenue seriously objected for raising additional grounds of appeal as well as on merit. 5. We have considered the rival submissions of both the parties and perused the orders of the lower authorities carefully. We have also perused the various evidences filed in the paper book including ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 5 screenshot of various notices from ITBA Portal with regard to assessee. We find that the case of assessee was reopened on the basis of information on ITD system that the assessee has made cash deposit of Rs. 25.20 lacs in bank of Maharashtra and that no return of income was filed by assessee. The Assessing Officer after taking proper approval of PCIT, Vadodara, issued notice under Section 148 of the Act on 28/03/2018. In response to such notice, the assesse filed return of income on 24/04/2018 declaring income of Rs. 97,241/-. The Assessing Officer proceeded for assessment and noted that the assessee has shown agricultural activities during the year under Section. On verification of cash deposit and withdrawal from bank, the Assessing Officer was satisfied about the explanation of Rs. 12.00 lacs. The assessee took plea that he is agriculturist and has no other activities and furnished record of landholding alongwith certain bills. The assessee was asked to file copy of Aadhar Card and bills and vouchers. The Assessing Officer noted that no compliance was made. The assessee has shown agricultural income of Rs. 4,66,584/- out of which, the Assessing Officer allowed income from agricultural activities of Rs. 3.50 lacs and remaining difference of Rs. 8.77 lacs was treated as unexplained cash deposit from undisclosed sources. The Assessing Officer also made addition of Rs. 1,16,584/- on account of difference between the agricultural income and treatment of genuine agricultural income of Rs. 3.50 lacs (Rs. 466584 – ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 6 350000). On appeal before the ld. CIT(A), the action of Assessing Officer was upheld in ex parte proceedings. 6. Before us, the ld. AR of the assessee has raised additional grounds of appeal. We find that the additional grounds of appeal is purely legal in nature and can be adjudicated merely on verification of records of lower authorities. However, the facts remained the same that such ground of appeal was not raised before the ld. CIT(A), therefore, considering the fact that the additional grounds of appeal can be adjudicated on the basis of material available on record and verification thereof. Therefore, the additional grounds of appeal is admitted. Further considering the fact that the assessee has not made any written submission or compliance in response to various notices issued by the ld. CIT(A). The ld. CIT(A) passed the order in ex parte proceedings and complete facts are not available before us, therefore, the additional grounds of appeal alongwith original grounds of appeal is restored back to the file of ld. CIT(A) with direction first to verify the facts if notice under Section 143(2) of the Act was issued or not, if such notice is not issued, the ld. CIT(A) shall pass the order in accordance by considering the decision of Hon'ble Calcutta High Court in Pr.CIT Vs. M/s Eversafe Securities Pvt. Ltd. (supra), which is relied by ld AR for the assessee. And in case the grounds and in case additional ground / plea of appeal is decided against the assessee, thereafter the other grounds of appeal be adjudicated on ITA No. 494/Srt/2023 Maqsud Musa Ughradar Vs ITO 7 merit in accordance with law. The assessee is also directed to be more vigilant in future and to furnish complete details to substantiate the agricultural income, expenses and cash credit/deposit. Needless to direct that before passing the order, the ld. CIT(A) shall grant reasonable opportunity of hearing to the assessee. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only. 7. In the result, this appeal of assessee is allowed for statistical purposes. Order announced in open court 12 th March, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 12/03/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat