Smt. Liz Hemangbhai Bhatt, Ahmedabad V. The ITO, Ward-5(1)(2), Ahmedabad

ITA 716/AHD/2019

AI Insights

The case involves Smt. Liz Hemangbhai Bhatt, a school teacher, who appealed against the orders of the Commissioner of Income Tax (Appeals)-5, Ahmedabad, which were based on the assessment orders passed under section 144 and penalty orders under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Years 2010-11 & 2011-12. The primary issues revolved around the non-condonation of delay in filing appeals and the treatment of unexplained cash deposits as income. The Tribunal found that the assessee had made a reasonable cause for the delay, which was initially not accepted by the CIT(A), and that the principles of natural justice were not followed as the CIT(A) did not consider the additional evidences provided by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114254 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 23-04-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Salary income; Principle of natural justice; Additional evidence; Reasonable cause; Onus to prove; Set aside
• Section: 148; 271(1)(c); 144; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Smt. Liz Hemangbhai Bhatt, A-301, Devpreet Appartment, NSD Circle, Bodakdev, Ahmedabad-380054 PAN: ADTPB9174C (Appellant) Vs The ITO, Ward-5(1)(2), Ahmedabad (Respondent) Assessee Represented : Ms. Arti Shah, A.R. Revenue Represented : Shri N.J. Vyas, Sr.D.R. Date of hearing : 08-02-2023 Date of pronouncement : 10-02-2023 आदेश/ORDER PER BENCH:- These four appeals are filed by the Assessee as against separate orders dated 26.03.2019 passed by the Commissioner of Income Tax (Appeals)-5, Ahmedabad as against the assessment orders passed u/s. 144 and penalty orders passed under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the respective Assessment Years (A.Ys) 2010-11 & ITA Nos: 714 to 717/Ahd/2019 Assessment Years: 2010-11 & 2011-12 I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 2 2011-12. Since common issues are involved in all these cases, the same are disposed of by this consolidated order. ITA Nos. 714 & 716/Ahd/2019 (Quantum Appeals for A.Y. 2010-11 & 2011-12 and ITA Nos. 715 & 717/Ahd/2019 (Penalty Appeals for A.Y. 2010-11 & 2011-12) 2. It is seen from record that the appeals were filed before the Ld. CIT(A) with the delay of 266 days in filing the quantum appeals and 115 days delay in filing the penalty appeals. As the explanations given by the assessee was not found to be reasonable, the Ld. CIT(A) dismissed all the four appeals as no “reasonable cause” was adduced by the assessee. 3. The brief facts of the case is that the assessee works as a school teacher and earns salary income of Rs. 3 to 4 Lakhs. It is noticed that the assessee made cash deposit of a sum of Rs.6,95,000/- in her Karur Vyasya Bank, Savings Bank account during the Financial Year 2009-10. However the assessee has not filed her Return of Income. It is also noted that the assessee is earning income from house property and interest income but no Return of Income was filed by the assessee. 3.1. Therefore a notice u/s. 148 dated 22.04.2014 was served on 07.05.2014, however the assessee has not filed Return of Income. Thereafter notice u/s. 142(1) were issued for four times, again the I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 3 assesse has not replied. Therefore with the available materials on record, the assessment was completed u/s. 144 as follows: I. Income from salary Rs. 2,75,127/- Gross salary Rs. 2,77,527/- Less: Tax on employment Rs. 2,400/- II. Income from House Property Rs. 2,50,403/- Rent received from Anand Rathi Rs. 2,81,446/- Less: Standard deduction @ 30% Rs. 84,440/- Rs. 1,97,026/- Rent received from Geojit BNP Rs. 76,252/- PARIBAS financial ser. Ltd. As per ITS data Less: Standard deduction @ 30% Rs. 22,875/- Rs. 53,377/- III. Income from other sources Rs. 29,329/- Interest of FDRs Rs. 24,453/- Interest of SB account Rs. 4,156/- Interest on IT refund Rs. 720/- IV. Unexplained cash deposit Rs. 7,15,000/- Total Rs.12,69,859/- Less:- Deduction under chapter VI A Rs. 90,623/- Total Rs.11,79,236/- Total assessed income @ Rs. 11,79,240/- 3.2. Similarly for the Assessment Year 2011-12, though the assessee filed the Return of Income, the Assessing Officer made the following additions: i) Returned income by the assessee Rs. 6,19,340/- ii) On FDR Income has not offered Rs. 88,407/- (iii) Savings Bank interest not declared Rs. 10,846/- (iv) Unexplained cash deposits Rs. 17,61,000/- Total taxable income Rs. 24,79,593/- 3.3. Following the assessment orders, penalty u/s. 271(1)(c) of Rs.2,62,415/- and Rs.5,56,209/- were levied for the Assessment Years 2010-11 and 2011-12. I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 4 4. Aggrieved against the same, the assessee filed appeals before Ld. CIT(A)-5, Ahmedabad with the delay of 266 days. The Ld. CIT(A) dismissed the appeals observing as follows: 3. The appellant has been given various opportunities to file written submission. The notices were issued and served at the address mentioned in assessment order as well as Form No.35, however none attended. The details of notices issued are as under – Sr. No. Dt. of issue of notice Dt. of hearing fixed Sent by Compliance by Appellant 1 12.10.2017 23.11.2017 R.P.A.D. & e-mail No compliance 2. 24.11.2017 26.12.2017 -do- Written submission filed 3. 15.01.2018 06.02.2018 -do- No compliance 4. Filed a letter dtd. 28.2.2018 in dak regarding furnishing of evidence u/s.46A of the I.T. Rules. 5. 18.03.2019 25.03.2019 -do- Adjournment application received and no adjournment granted. 3.1 The issue of non-compliance by assessees at appellate stage has been considered and decided by the Hon'ble Supreme Court and Various High Courts as discussed below. ............................... 3.9. In view of the facts and legal position discussed above, it is presumed that appellant is not interested in pursuing the appeal and not having any documents, explanation and evidence in support of grounds of appeal raised and thus has not discharged the onus to prove the genuineness of the transactions/addition made by the AO. It is seen that no written submission filed till date. In view of the lack of prosecution by the appellant, I proceed to decide the appeal on the basis of facts and material available on record. .............................. 4.3. In view of the above judicial pronouncements, the basic principle emerges that the delay should be bonafide and there should not be any negligence on the part of the appellant. However in the appeal under consideration, the appellant has taken the vague and unsupported plea for the delay and which is not verifiable from the records. The appellant has not submitted any evidence either along with the appeal or during appellate proceedings. Therefore, the delay made in filing the appeal does not deserve to be condoned and hence appellant's request for condonation is not entertained and rejected. Therefore the appeal is dismissed on this count. I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 5 5. Aggrieved against the appellate orders, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The Learned Commissioner of Income Tax (Appeals)-5, Ahmedabad has erred it law and on facts of the case in confirming ex-parte order u/s. 144 passed by the Assessing Officer 2. The Learned Commissioner of Income Tax (Appeals)-5, Ahmedabad has erred in law and on facts of the case in not condoning the delay in filing appeal before the C.I.T.(Appeals) though the same was for reasonable cause. 3. The Learned Commissioner of Income Tax (Appeals)-5, Ahmedabad has erred in law and on facts of the case in holding that the Appellant did not comply with the notices issued by C.I.T.(Appeals) and proceeded to decide the appeal on facts and material available on record. 4. The Learned Commissioner of Income Tax (Appeals)-5, Ahmedabad has erred in law and on facts of the case in treating cash deposits of Rs.7.15,000/- u/s.68 of the Income Tax Act, 1961 as unexplained cash credit and added the same to the total income of the Appellant. 5. Your Appellant prays to reserve the right to add, alter, amend and/or withdraw any of the above grounds of appeal. 5.1. Ld. A.R. Ms. Arti N. Shah appearing for the assessee submitted before us a Paper Book containing written submissions filed by the assessee before the Ld. CIT(A) along with the bank statement. The assessee also vide letter dated 28.02.2018 filed additional evidences to be entertained under Rule 46A of the Income Tax Rules, before the Ld. CIT(A). Pursuant to that the Ld. CIT(A) has called for a Remand Report from the Assessing Officer. However the Ld. CIT(A) dismissed the appeal without condoning the delay on the ground that no “reasonable cause” was made out by the assessee and no evidences filed by the assessee. Thus in the interest of natural justice, the delay in filing the appeals be condoned and the matter be heard on merits on the documents filed under Rule 46A of the Rules. I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 6 6. Per contra, the Ld. Sr. D.R. Mr. N.J. Vyas appearing for the Revenue supported the orders passed by the Lower Authorities and submitted that the assessee has never responded to the notices issued by the A.O. and therefore the orders passed by the Lower Authorities does not require any interference and the same may be confirmed by dismissing the above appeals. 7. We have given our thoughtful consideration and perused the materials available on record. As it can be seen from the Ld. CIT(A)’s order, in response to the hearing notices, the assessee filed her written submission. Again she filed vide letter dated 22.02.2018 to admit the additional evidences under Rule 46A of the Income Tax Rules. The assessee also placed on record the Remand Report dated 08-03-2019 submitted by the A.O. Finally when the case was fixed for hearing on 25.03.2019, the assessee sought for an adjournment request, which was rejected and the present appellate orders were been passed by the Ld. CIT(A) dismissing the appeals. This is clearly against the Principles of Natural Justice, which requires interference by us. When the assessee has filed the written submissions as well the additional documents in support of her claim, the Ld. CIT(A) ought to have considered the same, more particularly when Remand Report is very much submitted by the A.O. But the Ld. CIT(A) dismissed the appeals on the point of condonation delay. Even on condonation delay, the assessee has made out a case that aged old Father-in-Law received the notices, but not informed the assessee without knowing the consequences of such notices. This is a “reasonable cause” made out by the I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 7 assessee who is a working woman of the family. Therefore we hereby condone the delay of 266 days in filing the appeals for the Assessment Years 2010-11 & 2011-12 and the matter be set aside back to the file of the Ld. CIT(A) for fresh consideration and pass orders on merits after considering the additional documents field by the assessee by giving proper opportunity to the assessee. Needless to state, the assessee should cooperate with the Appellate Authorities by producing all the evidences in support of her claim. 8. Therefore, the grounds raised by the assessee are hereby allowed and the appeals are restored back to the file of the Ld. CIT(A). 9. In the result, the appeals filed by the Assessee in ITA No. 714 & 716/Ahd/2019 are allowed for statistical purposes. 10. Consequently the penalty appeals filed by the Assessee in ITA Nos. 715 & 717/Ahd/2019 wherein the delay of 115 days in filing the appeals are hereby condoned and are also set aside to the file of the Ld. CIT(A) for fresh consideration, subject to the outcome of the quantum appeals filed by the assessee. 11. In the result, the appeals filed by the assessee in ITA Nos. 715 & 717/Ahd/2019 are allowed for statistical purposes. I.T.A Nos. 714 to 717/Ahd/2019 A.Ys. 2010-11 & 2011-12 Page No Smt. Liz Hemangbhai Bhatt vs ITO 8 12. In the result, all the four appeals filed by the Assessee are allowed for statistical purposes. Order pronounced in the open court on 10-02-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 10/02/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद