JAINENDER KUMAR MITTAL,NEW DELHI V. DCIT, CIRCLE-35(1), DELHI

ITA 3607/DEL/2024

AI Insights

The case involves Jainender Kumar Mittal, a jeweler, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed an addition of INR 13,80,40,000 to his income under section 68 of the Income Tax Act for the Assessment Year 2017-18. The addition was made following a survey during the demonetization period, where large cash deposits were noted. The assessee argued that these deposits were legitimate business proceeds included in his declared turnover, and that he was not given a fair opportunity to present his case or the necessary documents, which were reportedly in the possession of the Income Tax Department. The Tribunal found that the assessee was denied a proper opportunity to explain the cash deposits and remitted the case back to the AO for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 103010 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: KRITI VINDAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1); 250; 68

Judgement Text

" ITA-3607/Del/2024 Jainender Kumar Mittal Page 1 of 7 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No:-3607/Del/2024 (Assessment Year- 2017-18) Jainender Kumar Mittal, 22-A, Kamla Nagar, New Delhi Vs. DCIT, Circle-35(1), New Delhi. PAN No: AAPM0595N APPELLANT RESPONDENT Assessee by:Ms. Kriti Vindal, CA Revenue by:Shri Daya Inder Singh Sidhu, CIT(DR) DR Date of Hearing : 08.04.2025 Date of Pronouncement : 16.04.2025 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the NFAC, Delhi, dated 11.06.2024 for A.Y 2017-18. 2. The assessee has raised the following grounds of appeal: “ 1. On the basis of law and facts of the case, the order passed by learned A.O. is erroneous, illegal and against the principal of natural justice and equity. ITA-3607/Del/2024 Jainender Kumar Mittal Page 2 of 7 2. The learned A.O. has erred in making addition of INR 13,80,40,000 u/s 68 of the Act without affording any opportunity of being heard and without bringing any material in support of such addition. 3 3. The information and documents supporting the reasons for selecting assessee's case for scrutiny were never provided to the assessee during the assessment proceedings. No independent inquiries were made. 4. Assessee had fully co-operated in the assessment proceedings and provided all the specific information and documents required by the learned A.O. as per first notice u/s 142(1). However, when the 2nd notice u/s 142(1) was issued on 14/12/2019 by the learned A.O. asking for further more details, assessee was not in good medical condition. He also submitted his medical certificates to the A.O and pledged for adjournment of the case. On the same day i.e. 14/12/2019, another notice u/s 142(1) was issued by the A.O. requiring the assessee to physically present with books of accounts. However, due to the medical conditions of assessee, he could not present the required documents and information. The learned A.O. has altogether ignored the assessee's medical conditions and issued show cause notice u/s 143(3) and asks assessee to physically produce books ofaccounts and other documents. 5. The assessment order was passed in haste and without making any independent inquiries, as the case was getting time barred 6. The amount of deposits i.e. 13,80,40,000 that were added to assessee's income pertains to the sales that assessee had made in the FY 2016-17 and are legitimate proceeds. 7. Assessee had declared total turnover of INR 24.59,18,507 in his return of income for the financial year 2016-17. The amount of Deposits of INR 13,80,40,000 were duly included in the figure of INR 24,59,18,507 i.e. total turnover of the assessee. The learned A.O. has altogether ignored this fact and erred in adding this figure to the income of assessee as income from unexplained sources u/s 68. 8 That learned AO has not made any independent enquiries as regard to the source of cash deposit and only on his assumption he has treated this amount as unexplained cash u/s 68 9 That the coercive recovery would tantamount to financial injustice to the assessee. The Learned AO/ITO/TRO has made a very high-pitched assessment/order ignoring the facts involved in the case 10. That levy of penalty would be a financial distress and undue hardship to the assessee. That under request, in case your good self still consider us at fault, then please provide us opportunity to clear doubts before framing the order. ITA-3607/Del/2024 Jainender Kumar Mittal Page 3 of 7 11. That the assessee respectfully prays that the impugned assessment order under section 143(3) and CIT(A) order u/s 250 along with demand order should be set aside and the case to be remanded back to A.O. for re-assessment.” 3. Brief facts of the case are is that the assessee is in the business of trading in jewellery. The case of the assessee was selected under CASS for examination of large cash deposit during the demonetization period. The assessment was made u/s 143(3) vide order dated 29.12.2019 in the case of the assessee wherein an addition of Rs. 13,80,40,000/- was made u/s 68 of the Act. Against the addition, the assessee appealed before the CIT(A) who confirmed the addition. The aggrieved assessee is now before us. 4. The Ld. AR vehemently argued that a survey was conducted by the Department on the assessee’s premises on 15.03.2017 and all the books of account were impounded by the Department. The Ld. AR argued that in the course of assessment proceedings, the AO required the assessee to submit books of accounts for verification of amount credited in its bank. It is the say of the Ld. AR that the assessee submitted an explanation that all the books of account are ITA-3607/Del/2024 Jainender Kumar Mittal Page 4 of 7 possession of the AO himself and thereafter without affording any opportunity, the AO made the additions. 5. The ld AR forcefully argued that the assessee has declared a total turnover at Rs. 24,59,18,507/- in his return of income for Assessment Year 2017-18. It is the argument of the assessee that the deposit of Rs. 13,80,40,000/- were duly included in the figure of Rs. 24,59,18,507/- i.e. total turnover of the assessee, which has been ignored by the AO and the AO has treated the same as income from unexplained source u/s 68. 6. The Ld. AR further stated that even during the survey operation, no discrepancies were found and further the addition was made without any discrepancies pointed out in the book of account. The assessee has further argued that no due opportunity was given to the assessee for explaining its position. 7. Per contra, the Ld. DR has relied upon the orders of the AO and the CIT(A). ITA-3607/Del/2024 Jainender Kumar Mittal Page 5 of 7 8. We have heard the rival submissions and perused the materials available on record. From the entire conspectus of events, we find that the assessee was denied a proper and reasonable opportunity to explain its position on the cash deposit. The assessee has claimed before us that a survey was conducted in its premises wherein the entire books of account was impounded by the Department but we find that there is not a whisper in the assessment order regarding any survey and impounding of books. We are therefore of the considered opinion, that in the interest of justice and balance of convenience the issue should be remitted back to the file of the AO for examining the issue properly. We therefore, consider it fit to set aside the orders of the CIT(A)/AO and direct the AO to give a reasonable opportunity to the assessee with special reference to the claim of the assessee that the books of account are in possession of the Income Tax Department, and examine the issue of cash deposit afresh. In view of the same, the appeal of the assessee is allowed for statistical purposes. ITA-3607/Del/2024 Jainender Kumar Mittal Page 6 of 7 9. In the result, the appeal of the assessee in ITA Nos. 3607/DEL/2024 are allowed for statistical purpose. The order is pronounced in the open court on 16.04.2025. Sd/- Sd/- [YOGESH KUMAR US] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16th APRIL, 2025. Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi ITA-3607/Del/2024 Jainender Kumar Mittal Page 7 of 7 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 8.04.2025 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 8.04.2025 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order "