Afroz Dil Khan, Udaipur V. ITO, Ward-1(1), Udaipur

ITA 72/JODH/2022

AI Insights

The case involves Afroz Dil Khan, the appellant, who is engaged in the business of air travel ticket booking. For the assessment year 2017-18, an ex-parte assessment order under section 144 of the Income Tax Act was passed, adding Rs. 1,41,47,600 as unexplained cash deposit into bank accounts, invoking section 69A. The appellant's appeal to the CIT(A) was dismissed ex-parte, leading to the current appeal before the Income Tax Appellate Tribunal. The appellant argued that due to the COVID-19 pandemic and other personal hardships, he was unable to respond to the notices and present his case effectively.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122851 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 22-05-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Set aside
• Section: 144; 142(1); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR VIRTUAL HEARING BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM ITA No.72/Jodh/2022 (ASSESSMENT YEAR- 2017-18) Afroz Dil Khan 09, Barkat Colony, Savina, Udaipur Vs Income Tax Officer, Ward 1(1), Udaipur (Appellant) (Respondent) PAN NO. AHQPK 9623 A Assessee By Sh. Rakesh Lodha Revenue By Sh. S. M. Joshi, JCIT-DR Date of hearing 12/07/2023 Date of Pronouncement 12/09/2023 O R D E R PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 24.03.2022 [here in after (NFAC)] for assessment year 2017-18 which in turn arise from the order dated 12.12.2019 passed under section 144 of the Income Tax Act, by the ITO, Ward-01(1), Udaipur. 2 ITA No. 72/Jodh/2022 Afroz Dil Khan 2. The assessee has marched this appeal on the following grounds:- “1. The Ld. CIT(A) erred in passing an order u/s 144 without allowing a meaningful opportunity therefore, the impugned order is erroneous and liable to quash. 2. The Ld. CIT(A) has erred in upholding the addition of Rs. 1,41,47,600/- u/s 36(1)(va) on account of unexplained investment being cash deposits of business receipts into Bank accounts and invoked section 115BBE, so, impugned order is arbitrary and unlawful. 3. The appellant craves leave to add, alter, amend, modify and/or delete all or any of the grounds of the appeal on or before the final hearing, if necessary.” 3. The fact as culled out from the records is that the assessee filed his return of income on 27.02.2018 declaring total income at Rs. 3,88,860/- u/s 44AD. The return was processed on 17.03.2018 u/s 143(1) of the I.T. Act, 1961. The case was selected through CASS for limited scrutiny. Accordingly, a notice u/s 143(2) of the I.T. Act, 1961 was issued on 09.08.20189 fixing hearing for 17.08.2018, which was duly served upon the assessee. 3.1 A notice u/s 142(1) of the I.T. Act, 1961 along with query letter was issued on 03.09.2019 and served upon assessee. The assessee was asked to submit details/explanation regarding cash deposit in bank, cash sales, analysis of month wise case sales and deposit for 3 ITA No. 72/Jodh/2022 Afroz Dil Khan the year under consideration in comparison to preceding year. The assessee has not made any compliance. Further, a notice u/s 142(1) of the I.T. Act, 1961 along with query letter was issued on 10.12.2019 and served upon assessee. The assessee was asked to submit source of cash deposit amount of Rs. 1,41,47,600/- in ICICI Bank, Udaipur. Again, the assessee has not made any compliance. It means the assessee has nothing to say in this regard. Hence, assessment completed based on the all-relevant material available on record and consequently the order was passed under section 144 of the Act. 4. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A)/NFAC. A propose to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: “8. I have carefully considered the facts of the case, assessment order and material available on records. It is seen that, despite several opportunity given at the appellate stage, no submission or evidence was furnished by the appellant in support of the claim made by him in the grounds of appeal. So I do not find force in this ground of appellant and therefore this ground is dismissed. 9. In the result, appeal is dismissed.” 5. As the assessee did not receive any favour from the appeal filed before the ld. CIT(A), the present appeal is filed by the assessee. The 4 ITA No. 72/Jodh/2022 Afroz Dil Khan ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; “The Hon'ble Chairman and his other companion member of Income Tax Appellate Tribunal, Jodhpur MAY IT PLEASE YOUR HONOURS, The appellant, above named, respectfully submits as under- That appellant preferred an appeal before this Hon'ble Tribunal having appeal No. 72/Jodh/2022. The brief facts thereof and appellant's brief synopsis of submissions are submitted herewith for necessary consideration please. (A) FACTS OF THE CASE 1. The appellant is engaged in the business of air travel ticket booking omission for several years. During the AY 2017-18 the ex-party assessment order u/s 144 was passed on 12/12/2019 by making addition of Rs 1,41,47,600/- invoking section 69A considering business receipt into bank account as unexplained cash deposit into bank and further confirmed by Id CIT(A) in ex party order dated 24/03/2022. 2. So, the appellant is in appeal before this Hon'ble Bench against the order dated 24/03/2022 of NFAC, CIT (Appeal). Grounds of appeals are: 1. The Ld CIT(A) erred in passing an order u/s 144 without allowing a meaningful opportunity therefore, the impugned order is erroneous and liable to quash. 2. The Ld. CIT(A) has erred in upholding the addition of Rs. 1,41,47,600/- u/s 36(1)(va) on account of unexplained investment being cash deposits of business receipts into Bank accounts and invoked section 115BBE, so, impugned order is arbitrary and unlawful. 2.1 The appellant humbly submitted that during the assessment time he gave the available documents for submission to his AR but he has not furnished before the assessing officer and assessment was made ex party by making addition of entire business receipts credits of Rs. 141,47,600/- as appearing into bank accounts as unexplained cash deposit into bank account by invoking section 69A of the Act. 2.2 The appellant filed an appeal but due to lockdown his business activities are badly affected and his rented business premise was also seized by the Udaipur Municipal Corporation for illegal shops construction by the land lord and suffered business discontinuance. 5 ITA No. 72/Jodh/2022 Afroz Dil Khan 2.3 In such peculiar situation and financial troubles he could not engage any professional to contest his appeal and due to discontinuation of his business firm M/s New Super Travels, staff who operates computer systems has also left him. so, he could not look after emails etc. Meanwhile, his appeal was ex party decided by NFAC, CIT(A). All these non compliances were not deliberate and intended in defiance of law but of life in COVID 19 created that unwanted situation. 2.4 Therefore, the appellant humbly prays Hon'ble Bench to set aside the order back to the Ld CIT(A), NFAC to allow him an opportunity to submit the evidences, explanation, documents and reply on the grounds of appeal raised by him in the form no. 35. It is pertinent to state that in the interest of natural justice and doctrine of Audi Alteram partem appellant request may kindly be considered and set aside the appeal. The appellant assures that he will submit the replies and documents before the CIT(A) without any failure. 2.5 The preparation of ground-wise appeal submission before the Hon'ble Bench would contain many fresh evidences and material ant not to trouble the Hon'ble Bench with all that, we are requesting for set aside. Therefore, in-view of facts and circumstances the prayer for set aside may kindly be admitted and oblige.” 6. The ld DR is heard who has relied on the findings of the lower authorities. 7. We have heard the rival contentions and perused the material placed on record. The bench noted that the order of the assessment was passed ex-party. The assessee preferred an appeal before the ld. CIT(A) who has dismissed appeal ex-party and without dealing with the merits of the case. Before us the ld. AR appearing on behalf of the assessee substantiated the reasons for being ex-party stating that due 6 ITA No. 72/Jodh/2022 Afroz Dil Khan to lockdown on account of pandemic covid 19 his business activities were affected and his rented business premises was also seized by the Municipal Corporation and account with the dispute of the land lord and thus, was passing server disorder of business and financial crunch and thereby could not concentrate on the issue and if given a chance he will explain all the issue related to the assessment of income. Thus, based on these arguments the bench feels that if given a chance the assessee can demonstrate the merits of the case. Based on the contentions and ongoing through the orders of the lower authorities we find force in the arguments advanced by the ld. AR of the assessee. Based on that set of facts, we are of the considered view that the assessing officer should hear the assessee’s submission on merits after affording proper opportunity of being heard and pass speaking order in the matter, therefore, the matter is set a side to the file of the learned assessing officer with a direction to hear the merits of the case after affording a reasonable opportunity of being head to the assessee. At the same time assessee is directed to represent and present all the facts before the assessing officer and should not ask for the adjournment on frivols grounds. At this stage we remand back the issues raised without commenting upon the merits of the case and the 7 ITA No. 72/Jodh/2022 Afroz Dil Khan ld. AO is directed to complete the assessment in accordance with the law. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judcial Member Accountant Member D at e d : 1 2 / 09 /2 02 3 *G an es h K u m a r , P S Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench