BABAN MARUTI CHAVAN, BHARATI VIDYAPEETH PUNE V. CIT(A) (NFAC), DELHI

ITA 597/PUN/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7196 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 22-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ TRIPATHI
• Assessee Lawyers: SURENDRA JAKAWALE
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 147; 148; 144; 142(1); 69A; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.597/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year : 2016-17 Baban Maruti Chavan, Sr.No.34/15, Behind Bharati Vidyapeeth, Chavan Complex, Dhankawadi, Pune- 411043. PAN : AAQPC9174M Vs. CIT(A) (NFAC), Delhi. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 24.01.2024 passed by Ld CIT(A)/NFAC for the assessment year 2016-17. 2. The appellant raised the following grounds of appeal :- “1. The Commissioner of Income Tax (Appeals) has made additions to the Interest Income amounting to Rs. 34,82,528/- and interest on Debentures totalling Rs. 86,846/-, categorizing them as unexplained money under Section 69A of the Income Tax Act, 1961 for the Assessment Year 2016-17. The failure of the assessee to substantiate the source of income has led to its Assessee by : Shri Surendra Jakawale Revenue by : Shri Manoj Tripathi Date of hearing : 02.05.2024 Date of pronouncement : 15.05.2024 ITA No.597/PUN/2024 2 classification as unexplained. Consequently, penalty proceedings under Section 271 have been initiated 2. According to the Commissioner of Income Tax (Appeals), the assessee is the recipient of interest income from debentures and other sources. However, the lack of explanation from the assessee regarding these funds, coupled with the absence of filed returns or the declaration of income for taxation, justifies the inclusion of this amount within the ambit of Section 69A as unexplained money. 3. The assessee has failed to provide a satisfactory explanation for non-compliance with the notices issued by the assessing officer during the assessment proceedings. Consequently, the dismissal of the appeal by the Commissioner of Income Tax (Appeals) is attributed to the neglect exhibited by the assessee in addressing the aforementioned notices.” 3. Briefly, the facts of the case are that the appellant is an individual. No return of income for the assessment year under consideration was filed under the provisions of section 139(1) of the Act. Based on the information available with the AIR that the appellant had received interest on debentures amounting to Rs.86,846/- and other interest amounting to Rs.34,82,528/-, the Assessing Officer formed an opinion that the income escaped assessment of tax. Accordingly, the Assessing Officer reopened the case u/s 147 of the IT Act and also issued notice u/s 148 of the Act on 23.03.2021. Thereafter, statutory notices u/s 142(1) were also issued. However, no compliance was made by the assessee in reply to the said notices issued u/s 148 and 142(1) of the Act. Since the assessee had failed to furnish any details to substantiate the source ITA No.597/PUN/2024 3 of such interest on debentures amounting to Rs.86,846/- and other interest amounting to Rs.34,82,528/-, the Assessing Officer in the order passed u/s 144/147 of the Act determined the total income of the assessee at Rs.35,69,374/- by treating the interest on debentures and other interest as unexplained money u/s 69A of the Act. 4. Being aggrieved, an appeal was filed before the ld. CIT(A)/NFAC, who vide impugned order confirmed the addition made by the Assessing Officer. 5. Being aggrieved by the decision of the ld. CIT(A)/NFAC, the appellant is in appeal before us. 6. The LD AR submitted before us that the appellant assessee is a senior citizen suffering from various ailments. In this regard, a paper book is furnished by the assessee containing an affidavit, documents with regard to medical treatment & documents with regard to source of investment in bank deposits etc. With the help of the chronology of events mentioned in the affidavit, Ld Counsel of the assessee demonstrated that when the notice u/s 142(1) was issued the assessee was suffering from Covid-19 infection & thereafter when show cause notice u/s 144 was issued the assessee had undergone angiography & then angioplasty was also performed & therefore was not in a position to respond to the statutory notices ITA No.597/PUN/2024 4 issued by the department. It was further submitted that under the above facts & in the circumstances of the case the assessee could not participate in the assessment proceedings & therefore there was no mala-fide intention in not replying to the statutory notices issued by the AO, which resulted in ex-parte order u/s 147/144 of the IT Act. LD counsel of the assessee further pointed out before us that a detailed reply / submission was also furnished before LD CIT(A)/NFAC but unfortunately it was not accepted by LD CIT(A)/NFAC & the appeal was dismissed. It was also submitted before the bench that LD CIT(A)/NFAC was not correct in observing that the appellant purposely not complied with any of the notices issued between 23-03-2021 to 11-02-2022. In this regard, it is clarified by LD counsel of the assessee that there is an averment in the affidavit that since January 2021 the appellant assessee was suffering from heart problem, followed by Covid-19 & thereafter angioplasty in the month of December 2021, the assessee could not respond to any of the notices. Therefore LD CIT(A)/NFAC committed error in not accepting the contention of the assessee that due to bona-fide reasons the assessee was prevented from appearing on the dates of hearing & therefore Ld counsel of the assessee requested before the bench to set-a-side the order passed by the AO ITA No.597/PUN/2024 5 as well as passed by LD CIT(A)/NFAC & remand the matter back to the file of the AO to consider the issue a fresh, so that the assessee can submit documents & explanations before the AO in support of his claim. 7. The LD DR supported the orders passed by learned lower authorities & requested to dismiss the appeal of the assessee. 8. We have heard LD Counsels from both the sides & perused the material available on the record. We find that the assessment order was passed ex-parte, because the assessee could not appear due to his serious health issues i.e. Covid-19 infection & Heart surgery. In support of this contention an affidavit duly attested & related documents have also been furnished by the assessee. We also find that LD CIT(A)/NFAC was not correct in observing that the assessee purposely not attended any of the statutory notices. It is on record that the assessee was undergoing treatments on the dates of hearing. We therefore find force in the arguments of the LD counsel of the assessee that there was reasonable cause in not complying with the statutory notices. Therefore without going into merits of the case, we set-a-side the orders passed by both the learned lower authorities & remand the matter back to the file of the AO to deal with the matter a fresh after providing reasonable ITA No.597/PUN/2024 6 opportunity of being heard to the assessee. The assessee is also directed to appear on the date fixed for hearing & explain his case without taking adjournment under any pretext other-wise the AO is free to pass any order as per law. Thus, the grounds raised in the appeal of the assessee are allowed. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 15 th day of May, 2024. Sd/- Sd/- (INTURI RAMA RAO) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 15 th May, 2024. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.