M/S. TALAT SARWAR KHAN, JAMMU V. INCOME TAX OFFICER WARD, KATRA

ITA 94/ASR/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 0570 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-08-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice
• Section: 144; 56(2)(vii)(b); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. Nos. 94 & 95/Asr/2024 Assessment Years: 2014-15 & 2017-18 M/s Talat Sarwar Khan 0, Gohlad Mandhar, Poonch Fort, B.O. Poonch, Jammu (J&K)-185101 [PAN: BMCPK9284R] (Appellant) Vs. Income Tax Officer, Ward, Katra (Respondent) Appellant by Respondent by : : Sh. Joginder Singh, CA Sh. Himanshu, Sr. D.R. Date of Hearing Date of Pronouncement : : 22.08.2024 04.09.2024 ORDER Per Dr. Mitha Lal Meena: Both the appeals have been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi even dated 03.01.2024 in respect of Assessment Years: 2014-15 & 2017-18 challenging 2 ITA Nos. 94 & 95/Asr/2024 M/s Talat Sarwar Khan v. ITO therein rejection of appeals on technical issue by invoking provisions of section u/s 249(4)(b) that no advance have been paid while filing the appeal against the assessment order, passed ex-parte qua the assessee u/s 144 of the Income Tax Act, 1961. 2. At the outset, the ld. counsel for the assessee has submitted that the ld. CIT(A) has wrongly presumed that the appellant assessee has filled in “No” against column No. 9 whereas the fact is that the appellant assessee has mentioned in the said column “Note applicable” in Form No. 35 (APB pg. no. 8 to 13). The ld. counsel has also filed a copy of computation of income along with trading account, profit & loss account and balance-sheet for the assessment year under consideration (APB pg. no. 2 to 7), explaining that the assessee has no advance tax liability to be payable u/s 249(4)(b) of the Act, 1961. The ld. AR further submitted that the ld. CIT(A) has rejected the appeal on technical ground without appreciating merits of the case by confirming the ex-parte assessment order passed u/s 144 of the Act for non- compliance of the assessee being residing in the remote area of Poonch Distt. where internet facilities were not properly available and consequently notices sent by the ld. AO on e-mail/portal have not been received by the assessee. The ld. AR humbly submitted that to meet the end of justice, the 3 ITA Nos. 94 & 95/Asr/2024 M/s Talat Sarwar Khan v. ITO matter may be set aside to the file of the ld. AO. In support, he placed reliance on the judgment delivered on similar facts in the case of ITAT Indore Bench in the case of Sh. Ankit Sharma v. ITO in ITA No. 246/Ind/2024 in respect of A.Y. 2015-16 dated 09.08.2024. 3. Per contra, the ld. DR for the department has no objection to the request of the assessee. However, he stated that the matter may be restored to the ld. CIT(A) although the ld. DR failed to rebut the contentions raised by the assessee. 4. Having heard both the sides, perusal of record, impugned order and written submissions filed before us, we find that the ld. CIT(A) has rejected the appeal of the assessee on technical ground and wrong presumptions of fact that the appellant assessee was required to pay advance tax liability by invoking provisions of section 249(4)(b) of the Act in a arbitrary manner in confirming the assessment order passed by the AO ex-parte qua the assessee in a summary manner without addressing the issue of non- compliance of notice on merits of the case that assessee has not been granted opportunity of being heard and issue of show cause notice by the AO, in view of natural justice. 4 ITA Nos. 94 & 95/Asr/2024 M/s Talat Sarwar Khan v. ITO 5. From the perusal of the copy of the computation of statement filled in along with the balance-sheet, profit & loss account, it is noted that the income of the assessee is below the taxable limit and the assessee was not required to deposit advance tax. Accordingly, in our view, the appellant assessee while filing Form No. 35 has rightly mentioned in column no. 9 as not applicable since no return was filed as he claimed the income claimed to be below the taxable limit. The ld. CIT(A)’s presumption has been factually incorrect in mentioning that the appellant has stated “No” (APB pg. 6 to 11)as against not applicable in the relevant column no. 9 of Form No. 35. Meaning thereby, the dismissal of the appeal of the assessee by the ld. CIT(A) was illegal and perverse to the facts on record. 6. On similar facts, ITAT Indore Bench in the case of Sh. Ankit Sharma v. ITO (supra) has observed as under: “5. Now, we take up the merits of the case. During hearing of appeal, it emerged that the AO has passed assessment-order to the best of his judgment u/s 144 and treated entire purchase consideration of land as unexplained investment u/s 69 and also made addition u/s 56(2)(vii)(b) on account of purchase for inadequate consideration because the assessee did not file any detail/document in response to notices u/s 142(1). The Ld. AR has, however, filed certain documents in a Paper- Book before us to explain the source of investment and submitted that the assessee is by now able to collect these documents and ready to represent his case to AO. Therefore, this matter should be restored to the file of AO for 5 ITA Nos. 94 & 95/Asr/2024 M/s Talat Sarwar Khan v. ITO examination of assessee's details/documents and fresh adjudication. Ld. DR agreed to the submission Shri Ankit Sharma, Barwani of Ld. AR. Faced with this situation, we remand this matter to the file of AO for a proper adjudication on merit after giving opportunity of hearing to the assessee, uninfluenced by his earlier order in any manner. The assessee is also directed to ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law.” 7. In the present case, the ld. CIT(A)’s presumption has been factually incorrect, and the assessee was not required to deposit advance tax. Accordingly, the dismissal of the appeal of the assessee by the ld. CIT(A) was illegal and perverse to the facts on record. In view of the peculiar facts of the case, we consider it deem fit to remand this matter to the file of AO for de novo adjudication on merits after affording adequate opportunity of hearing to the assessee, uninfluenced by his earlier order in any manner. The assessee shall participate in the hearings as may be fixed by AO and do not seek unnecessary adjournments, failing which the AO shall be at liberty to pass appropriate order in accordance with law. Thus, the matter is restored to the file of the AO for passing de novo assessment order as per law. 8. The facts in ITA No. 94/Asr/2024 are similar to that of ITA No. 95/Asr/2024 and therefore our findings and observations given in ITA No. 94/Asr/2024 shall be applicable to ITA No. 95/Asr/2024 in mutatis mutandis. Ordered accordingly. 6 ITA Nos. 94 & 95/Asr/2024 M/s Talat Sarwar Khan v. ITO 9. In the result, both the appeals filed by the assessees are allowed for statistical purposes. Order pronounced in the open court on 04.09.2024 Sd/- Sd/- (Udayan Dasgupta) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T. True Copy By Order