Smt. Richa Sharma, Chandigarh V. The Income Tax Officer, Ward 3(4), Chandigarh

ITA 623/CHANDI/2022

AI Insights

This case involves an appeal by Smt. Richa Sharma against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, which upheld an ex-parte assessment under section 144 of the Income Tax Act, 1961, for the Assessment Year 2012-13. The primary contention was the legality of the ex-parte assessment and the reopening of the case under section 148, which the assessee argued was based on incorrect facts and lacked proper notice. The assessee also contested the additions made to her income, which were alleged to be unexplained cash deposits. The Tribunal noted the personal circumstances of the assessee, including the death of her husband who managed her financial affairs, and the impact of the COVID-19 pandemic, which hindered her ability to respond to notices and gather necessary documentation. Consequently, the Tribunal decided to set aside the matter to the AO for a fresh examination with the additional evidence provided by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127723 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 24-04-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Additional evidence; Reason to believe; Set aside
• Section: 69; 148; 144; 69A

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “ B”, CHANDIGARH ी आकाश द प जैन, उपा य! एवं ी %व&म (संह यादव, लेखा सद-य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 623/Chd/ 2022 Assessment Year : 2012-13 Smt. Richa Sharma C/o Shri Tejmohan Singh, Advocate # 527, Sector 10D, Chandigarh The ITO, Ward 3(4), Chandigarh PAN NO: BEVPS3940H Appellant Respondent ! " Assessee by : Shri Tej Mohan Singh, Advocate # ! " Revenue by : Smt. Surinder Kaur Waraich, JCIT, Sr. DR $ % ! & Date of Hearing : 25/04/2023 '()* ! & Date of Pronouncement : 27/04/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 27/07/2022 pertaining to Assessment Year 2012-13 wherein the assessee has taken the following grounds of appeal: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as of facts in upholding the framing an ex-parte assessment u/s 144 without affording proper opportunity of hearing which is illegal, arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding reopening of the case resorting to the provisions of Section 148 based on incorrect facts in as much as there was no reason to believe that income had escaped assessment and as such the assessment framed is illegal, arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the framing the assessment in the absence of service of notice under section 148 and as such the order passed is illegal, arbitrary and unjustified. 4. Without prejudice to the above, The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs. 19,12,500/- on account of alleged unexplained income deposited in cash in the 2 bank account applying the provisions of Section 69 of the Act which is arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the addition of Rs.852/- being alleged interest received which is arbitrary and unjustified. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 7. That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to law & facts of the case and thus untenable. 2. During the course of hearing, the Ld. AR submitted that the AO had passed the order under section 144 dt. 09/12/2019 after making an addition of Rs. 19,12,500/- applying the provisions of section 69A being amount of cash deposited in the saving bank account maintained by the assessee with HDFC Bank. It was submitted that the husband of the assessee, Late Shri Hemant Sharma was looking after her financial affairs and he was diagnosed with cancer and during the course of his treatment, they shifted from their permanent address # 5407, Ground Floor, Modern Housing Complex, Manimajra and were staying at 415 Maple Apartments, Dhakoli with their relatives and the notices during the course of assessment proceedings were served by affixture at the permanent address and therefore could not be responded to by the assessee due to change of her address and also a fact that the husband of the assessee who was looking after her financial affairs, unfortunately expired on 14/06/2020. 3. It was submitted that subsequently on receipt of the assessment order, an appeal was filed with the Ld. CIT(A), NFAC Delhi and given the Covid period and the assessee being in the state of depression after the demise of her husband, could not collect the necessary documentation to explain the source of the cash deposit in her bank account and adjournment request were moved before the Ld. CIT(A), NFAC, Delhi, in response to notice dt. 06/08/2021, 06/12/2021 and 07/07/2022. However the Ld. CIT(A), NFAC, Delhi had 3 proceeded and passed an ex-parte order denying the opportunity to the assessee to represent her case and filing the necessary submission and documentation explaining the source of the cash deposit in her saving bank account maintained with HDFC Bank Account. 4. It was submitted that the assessee has since collected the necessary details and documentation in support of the cash deposits which is on account of her own past savings and gifts taken from near and dear ones for the reason that the assessee had to sent her son for further studies to Canada. In the said background, it was submitted that the assessee prayer for admission of additional evidence in the form of Affidavits of the persons who have gifted the amount to the assessee alongwith their identity proof may be considered and matter may be set aside to the file of the AO to examine the same after providing an opportunity to the assessee. 5. Per contra, the Ld. DR submitted that in this case the assessment order was passed under section 144 for the reason that the assessee did not respond to the notices issued by the AO from time to time and thereafter even before the Ld. CIT(A), NFAC, Delhi, the assessee has not responded to the notices which have been issued by the Ld. CIT(A), NFAC, Delhi and therefore in the said background, the assessment and appellate orders were passed. At the same time, given the factual background of the case as brought out by the ld AR where the husband of the assessee who was looking after her financial affairs met with untimely death and because of that the proceedings could not be attended, the Ld. DR did not raised any specific objection where the matter is set aside to the file of the AO to examine the additional evidences. 6. After hearing both the parties and perusal of the material available on the record and given the facts and circumstances of the present case where the assessee could not attend to the proceedings before the lower authorities on account of the fact that her financial affairs were handled by her husband who 4 has since met with untimely death, both the assessment and appellate orders have been passed ex-parte qua the assessee and the fact that the assessee has since taken necessary steps in terms of collecting necessary documentation in support of the source of the cash deposited in her saving bank account maintained with HDFC Bank Account, we deem it appropriate to set aside the matter to the file of the AO to consider the additional evidence so filed by the assessee and after calling in any further information and documentation as required decide the matter as per law after providing reasonable opportunity to the assessee. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/04/2023. Sd/- Sd/- आकाश द प जैन %व&म (संह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा य! / VICE PRESIDENT लेखा सद-य/ ACCOUNTANT MEMBER AG Date: 27/04/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. - 0 ग 2 3 & 2 3 456 ग7 DR, ITAT, CHANDIGARH 5. ग 6 8 % Guard File ( + $ By order, 9 # Assistant Registrar