MD. MOSHAHID ALI HEJAZI,MUZAFFARPUR V. ACIT, CENTRAL CIRCLE, MIZAFFARPUR

ITA 495/PAT/2022

AI Insights

The case involves Md. Moshahid Ali Hejazi, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals), Patna-3, concerning the assessment year 2019-20. The primary issue arose from the seizure of Rs.26,90,000 in cash from the appellant, which was alleged to be unaccounted income. The appellant claimed the cash was from business proceeds, but failed to provide satisfactory evidence to substantiate this claim during the initial assessments and appeals. The Tribunal found that the lower authorities did not properly consider the appellant's submissions and documents, leading to the decision to remit the case back to the CIT(Appeals) for a thorough re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 27059 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 27-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 144; 153A; 131

Judgement Text

" ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA-PATNA ‘e-COURT’, KOLKATA [Hybrid Court Hearing] Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Sanjay Awasthi, Accountant Member I.T.A. No. 495/PAT/2022 Assessment Year: 2019-2020 Md. Moshahid Ali Hejazi,…………....…………Appellant Behind Chand Kothi, Imamganj, H P O Town, Muzaffarpur-842001, Bihar [PAN:ANCPH0937N] -Vs.- Assistant Commissioner of Income Tax,….Respondent Central Circle, Muzaffarpur, Revenue Building, Sikandarpur, Muzaffarpur-842001, Bihar Appearances by: Shri G.P. Tulsiyan, FCA, appeared on behalf of the assessee Shri Ashok Kumar, CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing: November 26, 2024 Date of pronouncing the order: November 28, 2024 O R D E R Per Duvvuru RL Reddy, Vice-President(KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), Patna-3 dated 31st August, 2022 passed for Assessment Year 2019-20. ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 2 2. Brief facts of the case are that the assessee is in individual. An amount of Rs.26,90,000/- in cash was seized from the assessee at Zila Parishad Market, Muzaffarpur by FST of Muzaffarpur District Administration, which was kept in sixty-two envelopes and sealed in a box. Preliminary statement was recorded on 1st April, 2019 under section 131(1) of the Act. During the course of preliminary enquiry, the source of cash was found not explained from the submission made by the assessee. Therefore, the cash was handed over to the Muzaffarpur Police. An inquiry was conducted by the Income Tax Officer, Muzaffarpur. Summons under section 131 of the Act was issued by the ITO and statement was recorded on 01.04.2019. On being asked about the source of seized cash of Rs.26,90,000/-, the assessee stated that the seized cash was sale proceeds of his shop. He further stated that the seized cash was collected prior to 7-10 days from the date of seizure. On being questioned as to why he did not deposit the collected cash in the bank, he stated that due to overcrowding in Gujrati Mohalla for the preparation of Sheetla Maata Mandir, he could not carry the money to the Bank. He further stated that his annual turnover from the business for Financial Year 2018-19 was Rs.40-50 lakhs. On being asked as to how recovery of Rs.27,00,000/- was possible in a single day from a shop with annual turnover of Rs.40-50 lakhs, the assessee could not provide any convincing reply. Subsequently notice under section 153A of the Act was issued on 13.09.2021 for the assessment years 2014- 15 to 2019-20 requesting the assessee to file his return of income. In response to the notice, the assessee filed his return of income ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 3 on 21.09.2021 declaring total income of Rs.10,40,810/-. The Assessing Officer passed the order under section 153A read with section 144 of the Act determining the total income of Rs.37,30,900/-. 3. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 4. Before the ld. CIT(Appeals), the ld. Authorized Representative for the assessee has not submitted any documentary evidence to explain the cash, which was seized. 5. The ld. CIT(Appeals) has categorically made a finding that the appellant has not filed any evidence during the appellate proceedings to explain and substantiate the amount of cash of Rs.26,90,000/- seized from him. He failed to prove that the seized cash was generated from his business activities. Therefore, the ld. CIT(Appeals) has dismissed the assessee’s appeal. 6. On being aggrieved, the assessee preferred an appeal before us and raised the following issues:- “1. The order of the AO is bad in law & AO has denied natural justice. 2. The CIT(A)III, Patna during the appellate proceedings was, repeatedly submitted the details & explanations as required at the time of scrutiny vide our letter no. 012 dated 08.04.2022, letter no. 225 dated 09.07.2022, letter no. 076 dated 1305.2022 & letter no. 268 dated 16.08.2022 (Copies enclosed). 3. CIT(A) without examining the details or remanding the case back to the AO did not hear the case on merits & ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 4 summarily rejected the appeal, confirming the AO’s order. 4. The natural justice in this case has been denied both at the end of AO as well as CIT(A)III, Patna & hence the case is requested to be heard on merits. 5. The adhoc additions of Rs.26,90,000/- being the seized amount by FST Muzaffarpur which represented assessee’s business cash, time & again explained & substantiated in post-search requisition & at the time of scrutiny, the assessee request was denied justice & therefore, this addition of Rs.26,90,000/- is requested to be deleted. 7. It was the submission of the assessee that he has filed all the documents placed before the ld. Assessing Officer as well as ld. CIT(Appeals). The ld. CIT(Appeals) passed the order by dismissing the appeal without considering the submissions placed before him. It was the submission of the ld. A.R. that during the appellate proceedings, the details and explanation were repeatedly submitted before the ld. Assessing Officer as well as ld. CIT(Appeals), but both the authorities have not at all examined the details filed by the assessee and passed the orders. Therefore, ld. A.R. pleaded to remit the matter back to the file of ld. CIT(Appeals) to examine the documentary evidences filed by the assessee before the ld. CIT(Appeals). 8. On the other hand, ld. D.R. requested for adjournment since the ld. CIT(Appeals) has not considered the submissions made by the assessee. We reject the request of the ld. D.R. for adjournment of this case since it was filed in the year 2022. ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 5 9. We proceed to hear the matter and find that the ld. Assessing Officer as well as ld. CIT(Appeals) have not considered the submissions made by the assessee. 10. We have heard the rival submissions and perused the relevant material placed before us. The main contention of the ld. A.R. is that the documents, which were filed by the assessee, have not examined by the revenue authorities and passed the order. The assessee also filed the documents showing the business activities of the assessee. However, all these documents are not possible to examine by the Tribunal. Therefore, we are of the view that it is a fit case to remit the matter back to the file of ld. CIT(Appeals) to examine the documents filed by the assessee and pass a detailed speaking order. We also direct the ld. Counsel for the assessee to file all the relevant documents before the ld. CIT(Appeals) to substantiate the case of the assessee. If the assessee fails to submit any documentary evidence, then the ld. CIT(Appeals) will be at liberty to pass an order basing on the material available on record. Hence, the grounds of appeal raised by the assessee are allowed for statistical purposes. 11. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28/11/2024. Sd/- Sd/- (Sanjay Awasthi) (Duvvuru RL Reddy) Accountant Member Vice-President (KZ) Kolkata, the 28th day of November, 2024 ITA No. 495/PAT/2022 (A.Y. 2019-2020) Md. Moshahid Ali Hejazi 6 Copies to :(1) Md. Moshahid Ali Hejazi, Behind Chand Kothi, Imamganj, H P O Town, Muzaffarpur-842001, Bihar (2) Assistant Commissioner of Income Tax, Central Circle, Muzaffarpur, Revenue Building, Sikandarpur, Muzaffarpur-842001, Bihar (3) Commissioner of Income Tax (Appeals), Patna-3; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "