JAYARAMAN SUDHA, NAGAPATTINAM V. ITO,WARD-2, KUMBAKONAM

ITA 96/CHNY/2023

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The case involves Mrs. Jayaraman Sudha, a business correspondent for Central Bank of India, who appealed against the ex-parte assessment orders regarding unexplained cash deposits and unaccounted cash credits for the assessment year 2017-18. The Income Tax Officer had made additions to her income based on these deposits and credits, which were assessed under sections 69 and 144 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, citing non-compliance by the assessee in responding to notices. However, the Tribunal found that the assessee's role and the nature of her transactions might have been misunderstood, leading to the remand of the case for a detailed examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127464 (ITAT-CHENNAI)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 29-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 144; 142(1)

Judgement Text

आयकर अपील य अ धकरण, ‘सी’/ SMC यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ /SMC BENCH, CHENNAI ी महावीर संह, उपा य के सम BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT आयकरअपीलसं./I. T. A. No. 9 6/ Ch n y/ 2 02 3 ( नधा रणवष / A s se s sm ent Y ea r : 2 01 7- 18 ) Mrs. Jayaraman Sudha, 18,Vishwanathapuram Mayiladuthurai, Nagapattinam-609 001. V s The Income Tax Officer, Ward-2, Kumbakonam. P AN: EW N PS 6 0 8 8 F (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. N.Arjunraj, C.A for Mr.S.Sridhar, Advocate यथ क ओरसे/Respondent by : Mr. AR.V.Sreenivasan, Addl.CIT स ु नवाईक तार ख/D a t e o f h e a r i n g : 27.02.2023 घोषणाक तार ख /D a t e o f P r o n o u n c e m e n t : 27.02.2023 आदेश / O R D E R This appeal filed by the assessee is arising out of order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi vide appeal No. ITBA/NFAC/S/250/2022-23 / 1046958867(1) dated 04.11.2022. The assessment was framed by the Income Tax Officer, Ward- 2, Kumbakonam for the assessment year 2017-18 u/s.144 of the Income Tax Act, 1961 (hereinafter ‘the Act”) vide order dated 28.12.2019. 2. At the outset, the learned counsel for the assessee stated that assessment is ex-parte in regard to addition of cash deposits, being unexplained cash deposits u/s.69 of the Act amounting to Rs.12,63,040/- and as regards to another 2 ITA No. 96/Chny/2023 addition made by the Assessing Officer of entire cash credits and estimating the same at 8% gross profit on the cash credit of Rs.87,32,343/- i.e. (Rs.99,95,383 – Rs.12,63,040). The learned counsel for the assessee stated that even the order of the Assessing Officer is ex-parte. The learned counsel for the assessee took us through relevant ex-parte part of assessment order para 7, one which reads as under:- “7.1 A pre-assessment notice with the above particulars issued to assessee on 14.12.2019 and requested to file her objection, if any, on the above proposal aong with supporting details/and the reply to be furnished this office on or before 19.12.2019. The assessee did not file any objection within the stipulated time. Hence, the assessment is completed u/s.144 r.w.s. 142(1) of the Income Tax Act, 1961.” Further, the learned counsel took us through ex-parte order of the CIT(A), particularly, para 4.3, which reads as under:- “ 4.3 Therefore, in view of the above discussed facts, it is clear that the case of the appellant has been fixed for various dates but no reply has been given by the appellant and the appellant is a habitual non-compliant without any concern/ respect for the law of the land. Even the assessment was completed under Section 144 of Income Tax Act, 1961 due to non-compliance. Therefore, it is presumed that the appellant is not interested in pursuing his appeal. Therefore, the undersigned sees no reason to interfere with the orders of the Ld. Assessing Officer. Thus, the action of the AO is confirmed and the grounds of appeal raised by the appellant are dismissed.” The learned counsel for the assessee stated reasons that the assessee being business correspondent of Central Bank of 3 ITA No. 96/Chny/2023 India serving as rural mobile commerce service corporate business correspondent performing activity of financial inclusion activity under branchless banking scheme for Central Bank of India and also catering needs of old age pensioners in rural areas, hence, she could not reply to notices issued by the CIT(A) on four occasions. The relevant dates mentioned by the CIT(A) in his order reads as under:- Hearing Notice Remarks i) Notice dated 15.01.2021 No compliance ii) Notice dated 04.08.2022 No compliance iii) Notice dated 28.09.2022 No compliance iv) A final opportunity of being heard through notice dated 11.10.2022 fixed for 21.10.2022 No compliance 3. The learned counsel for the assessee in view of substantial justice requested that matter may be remitted back to the file of the Assessing Officer so that the assessee can explain cash deposits as well as credits. The learned counsel explained before us that these cash deposits and credits are arising out of assessee’s nature of business as the assessee deposited cash in the OD accounted operated by her as being business correspondent of Central Bank of India serving as rural mobile commerce service corporate business correspondent performing activity of financial inclusion activity 4 ITA No. 96/Chny/2023 under branchless banking scheme for Central Bank of India for Maraiyur village, Nagapattinam, catering needs of old age pensioners in said rural area. The transaction done through bio-metric HHD machine, which are not cash transactions were reported as cash deposited in the bank statement furnished by the bank and this has resulted in mis-information, as if the assessee has made cash deposits. Therefore, the learned counsel stated that the alleged transactions are not cash transactions, but are transactions of OAP pensions distributed through HHD machines. 4. Going by reasons stated by the assessee, learned Senior DR could not controvert that it may be true that explanation submitted by the assessee now before us is correct. 5. Heard rival contentions and gone through facts and circumstances of the case. In the interest of justice, to grant one more opportunity to the assessee, I set aside orders of the CIT(A) and that of the Assessing Officer and remand the matter back to the file of the Assessing Officer for fresh adjudication. Needless to say the assessee will co-operate with 5 ITA No. 96/Chny/2023 the Department and will appear before the Assessing Officer as and when called for. Hence, orders of the lower authorities are set aside and matter is remanded back to the file of the Assessing Officer. 6. The appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27 th February, 2023 Sd/- ( महावीर संह) (Mahavir Singh) उपा य / Vice-President चे$नई/Chennai, %दनांक/Dated 27.02.2023 DS आदेश क त)ल*प अ+े*षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु ,त (अपील)/CIT(A) 4. आयकर आय ु ,त/CIT 5. *वभागीय त न0ध/DR 6. गाड फाईल/GF.