MOHAMMAD BASHIR AHAMAD,BHILAI V. ACIT, CENTRAL CIRCLE-1, BILASPUR, BILASPUR

ITA 524/RPR/2024

AI Insights

The case involves multiple appeals by Mohammad Basir Ahamad against the orders of the Assistant Commissioner of Income Tax, Central Circle, Bilaspur, concerning the assessment years 2014-15, 2016-17 to 2019-20. The primary issue in these appeals was the addition of unexplained cash credits and the income assessed under section 68 of the Income-tax Act, 1961. The Tribunal noted that the assessee had not participated in the proceedings before the CIT(Appeals), leading to a dismissal of the appeals by the CIT(Appeals) for non-prosecution. However, the Tribunal set aside this decision, directing a re-examination of the appeals on their merits.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36532 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: CIT Vs B.N. Bhattachariee and others [1979] 10 CTR 354 (SC), Estate of Late Tukojirao Holkar Vs CWT [1979] 223 1TR 480 (M.P.), Amitkumar H. Shah Vs. ACIT in ITA No. 2985/Ahd/2010, CIT Vs Multiplan India Pvt. Ltd., [1991] 38 ITD 320 (Del), CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: G.S. AGRAWAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Unexplained cash credit; Bogus purchase; Principle of natural justice; Search and seizure; Accommodation entries; Bogus
• Section: 250; 251; 11; 153A; 68; 13; 246A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos. 521 to 525/RPR/2024 Ǔनधा[रण वष[ / Assessment Years : 2014-15, 2016-17 to 2019-20 Mohammad Basir Ahamad Quarter No.16/A, Street WMR, Sector-4, Bhilai, Durg (C.G.)-490 006 PAN: AHMPA8310N .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax, Central Circle, Bilaspur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri G.S. Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 26.12.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 27.12.2024 2 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the assessee are directed against the respective orders passed by the CIT(Appeals), Raipur-3, dated 26.09.2024, which in turn arises from the respective orders passed by the A.O under Sec. 153A r.w.s. 144 of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.09.2021 for the assessment years 2014-15, 2016-17 to 2019-20. As the facts and issues involved in the captioned appeals are common, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. I shall first take up the appeal filed by the assessee in ITA No.522/RPR/2024 for assessment year 2016-17 as lead matter and the order therein passed shall mutatis-mutandis apply for the remaining appeals. The assessee has assailed the impugned order on the following grounds of appeal: “Ground No. 01: In the facts and circumstances of the case, honorable CIT(A) erred in confirming addition of Rs.10,08,500.00/- made by Id. AO invoking section 68. The addition made by AO and sustained by Ld. CIT (A) is arbitrary, baseless and not justified. That the Id. AO has passed the order without considering facts of the case in just & equitable manner. Ground No. 02: In the facts and circumstances of the case, CIT(A) erred in confirming the addition made by Id. AO, of all the cash deposit 3 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 in the bank account without considering the facts that these cash deposits could have been made out of past savings. The Id. AO has made addition of even the small deposits made such as Rs.1000, Rs.2500, Rs.2600. The Id. AO has also not considered the details provided in the income tax return filed while preparing the assessment order. He has made the additions in a mechanical and haphazard manner. Prayed that all the cash deposits cannot be the income of the appellant and therefore the additions made please be deleted. Ground No. 03: That the appellant's financial condition was not stable at the time of the appeal proceedings before the honorable CIT(A), which constrained his ability to actively address the procedural requirements. The appellant prays that the Hon'ble Tribunal kindly considers these genuine circumstances while deciding the appeal in the interest of justice. Ground No. 04: The appellant reserves the right to add, urge, alter or withdraw any ground/ground(s) at the time or before the date of hearing.” 3. Shri G.S. Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the four appeals filed by the assessee in ITA No.521/RPR/2024, ITA No.522/RPR/2024, ITA No.524/RPR/2024, ITA No.525/RPR/2024 for A.Ys.2014-15 & 2016-17, 2018-19 & 2019-20 involves a delay of 09 days in filing of the appeals. Elaborating on the reasons leading to the impugned delay, the Ld. AR had filed an application dated 24.12.2024 a/w. affidavit, dated 25.12.2024 wherein, it is stated that the delay in filing the appeal had occasioned for the reason that at the relevant point of time the assessee was taken 4 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 medically unwell. The Ld. AR in support of his aforesaid contention has filed before me medical certificates of the assessee. 4. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) did not raise any objection to the seeking of condonation of delay by the assessee. 5. Considering the reasons leading to the delay of 09 days involved in filing of the captioned appeals which had occasioned due to ill-health of the assessee, I have no hesitation in condoning the same. 6. Succinctly stated, search and seizure proceedings u/s.132 of the Act were conducted on the business/residential premises of the assessee on 19.02.2021. Notice u/s.153A of the Act, dated 16.07.2021 was issued to the assessee calling upon him to file his return of income. As the assessee had neither filed his return of income nor complied to the notices which were, thereafter issued u/s.142(1) of the Act, therefore, the A.O was constrained to proceed with and frame the assessment to the best of his judgment u/s. 144 of the Act. 7. During the course of assessment proceedings, the A.O observed that the assessee who was engaged in the business of wholesale trading of metals and metal ores under the name and style of M/s. Ahamad Steel was subjected to search & seizure proceedings u/s.132 of the Act on 5 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 19.02.2021. The assessee in his statement recorded in the course of search proceedings u/s.132(4) of the Act, dated 19.02.2021 had admitted that his concern, viz. M/s. Ahamad Steels was formed on the advice of Shri Mithilesh Tiwari, Proprietor of M/s. H.K Enterprises. The assessee further stated that the transactions of his concern were carried out by Shri Mithilesh Tiwari (supra). Apart from that, the assessee had also admitted that he had signed blank cheques on both sides of his bank accounts as per directions of Shri Mithilesh Tiwari (supra) who used to retain the same. Accordingly, it was the assessee’s claim that all transactions done through his concern viz. M/s. Ahamad Steels were carried out at the behest of Shri Mithilesh Tiwari, a fact which was also admitted by him. The A.O observed that Shri Mithilesh Tiwari (supra) had admitted in his statement that he was involved in providing accommodation entries of bogus purchase/sale bills to various parties, viz. Jay Durga Ispat Co., Vijeet Steel Associates, Sharda Steel Sales, Earthen Ceramics Pvt. Ltd., Novatech Infrastructures, Narayan Steels, Om Ispat, Manmeet Steel, Sayyed Hifazat Ali, Prakash Industries etc. The A.O on a perusal of the bank account of the assessee i.e. A/c. No.918020067048872 maintained with Axis Bank, observed that over the period 01.04.2018 to 31.03.2019, there were several credit entries totaling Rs.7,17,74,135/- from M/s. H.K Enterprises (proprietary concern of Shri Mithilesh Tiwari) and Shri Anurag Sahu along with other transfers through IMPS which on the same date were withdrawn or transferred to 6 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 some other entities, viz. Four Pillars, Om Ispat etc. The A.O based on the aforesaid facts, held a firm conviction that all transactions done through the concern M/s. Ahamad Steels were nothing but paper transactions for providing accommodation entries to various parties. 8. Apart from that, the A.O observed that there were cash deposits in the aforesaid bank account viz. (i) 12.09.2018 : Rs.19,600/-; and (ii) 29.10.2018 : Rs.1,00,000/-, the source of which was not disclosed. 9. Thereafter, the A.O culled out the relevant extracts of the statement of the assessee that was recorded u/s. 132(4) of the Act on 19.02.2021 wherein, he had admitted that he was involved with Shri Mithilesh Tiwari (supra) for providing accommodation entries, and referred to the multi- facet aspects of the said statement. The A.O after referring to the bank statement of M/s. Four Pillars Associates & Resourcing, a proprietary concern of Shri Anurag Sahu, observed that the said concern was also a bogus concern which was not involved in any genuine business activity. 10. The A.O after exhaustive deliberations concluded that the concern, viz. M/s. Ahamad Steels (supra), i.e. the proprietary concern of the assessee was involved in providing bogus purchase/sales bills to various parties as per their requirements. Considering the aforesaid facts, the A.O called upon the assessee to put forth an explanation in respect of the 7 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 various entries recorded in his bank statement but the latter failed to come forth with any reply. 11. As the assessee had failed to come forth with any explanation as regards the credit entries aggregating to Rs.10,08,500/- in his bank account viz. (i) UCO Bank account No.02980210001288; and (ii) State Bank of India, Bank of account No.30161994039, therefore, the A.O held the same as his unexplained cash credit u/s. 68 of the Act. Accordingly, the A.O based on his aforesaid deliberations after taking cognizance of the fact that the assessee had filed his original return of income for the subject year i.e. A.Y.2016-17 on 31.03.2018, declaring an income of Rs.2,79,550/- (sic), made an addition of Rs.10,08,500/- u/s.68 of the Act and determined his income vide a consolidated order passed u/s.153A r.w.s. 144 of the Act, dated 29.09.2021 at Rs.13,28,050/-. 12. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded three opportunities had failed to participate in the proceedings before the first appellate authority, therefore, the latter holding a firm conviction that the assessee was not interested in pursuing the appeal, thus, was constrained to dismiss the same. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: 8 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 “2. I have considered the facts and circumstances of the case, the observations of the AO and material available on record on the above matter. As mentioned in above paragraph of this appeal order, this office has issued several notices to the assessee to file written submission. However, neither any adjournment was sought for nor any written submissions were filed. The notices were issued through ITBA System at the e-mail ID provided in ITBA System, From the above conduct of the assessee, it is evident that the assessee is no more interested in pursuing the appeal. The Hon'ble Supreme Court in the case of CIT Vs B.N. Bhattachariee and others [1979] 10 CTR 354 (SC) observed that preferring an appeal means effectively pursuing it. The Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [1979] 223 1TR 480 (M.P.) dismissed the reference filed at the instance of the assessee for default and for not taking necessary steps. Considering the conduct of the assessee in the present circumstance, I am of the view that the assessee is not interested in pursuing the appeal. This view has been affirmed by Hon'ble !TAT Ahmedabad in case of Amitkumar H. Shah Vs. ACIT in ITA No. 2985/Ahd/2010 vide their order dated 31.12.2013, wherein following the order of ITAT Delhi Bench in the case of CIT Vs Multiplan India Pvt. Ltd., [1991] 38 ITD 320 (Del), 1TAT has dismissed the appeal filed by the assessee for want of persuasion. Under these circumstances, the current appeal of the appellant is liable to be dismissed. Three notices are issued in span of one year and ten months but the assessee did not file any submission in support of the grounds raised in the appeal. The details of 03 notices issued to the assessee as reproduced here in below: - Sr. No. Notice issued under section Date of notice Hearing date Remarks 1. 250 of I.T. Act, 1961 12.10.2022 03.11.2022 No reply 2. 250 of I.T. Act, 1961 08.11.2023 05.12.2023 No reply 3. 250 of I.T. Act, 1961 14.08.2023 20.08.2024 No reply 9 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 The assessee has failed to submit any evidence in support of its appeal despite given several opportunities being heard. In absence of any explanation & on the basis of facts gathered and discussed by the Id. AO, considering entire facts in the assessment order. I find that the Id. AO is justified to addition of Rs.10,08,500/-. In the light of natural justice, an opportunity as final opportunity was also given vide notice dt. 14.08.2024 and hearing fixed on 20.08.2024 but assessee did not file any evidence in support of issues raised in appeal nor file any adjournment request. The appellant has shown that it is not interested in pursuing the appeal. Under these circumstances, in my opinion the appellant is not interest in the appeal. In view of these facts, the appeal of the appellant deserves to be dismissed as it cannot be kept pending adjudication for indefinite period. It is the duty of the appellant to make necessary arrangements for effective representation on the appointed date. Mere filing of an appeal is not enough, rather it requires effective hearing also. I rely on the above-mentioned case laws. In view of the above- mentioned case laws, the appeal filed by the appellant deserves to be dismissed. Accordingly, the ground of appeals is dismissed. 3. In the result, appeals are dismissed. 13. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 14. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 15. Admittedly, it is a matter of fact borne from record that the assessee despite having been intimated about the fixation of hearing of the appeal on three occasions, viz. (i) on 03.11.2022 (vide notice dated 12.10.2022); (ii) on 05.12.2023 (vide notice dated 08.11.2023); and (iii) on 20.08.2024 (vide notice dated 14.08.2024), had for the reasons best known to him 10 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 failed to participate in the proceedings before the first appellate authority. I principally concur with the CIT(Appeals) that the lackadaisical approach adopted by the assessee in the proceedings before him revealed his disinterest to prosecute the matter, due to which, the appeal was required to be disposed of vide an ex-parte order. Ostensibly, the assessee because of his casual and lackadaisical approach had failed to comply with the notices issued u/ss.153A/142(1) of the Act during the assessment proceedings, and thus, was visited with an ex-parte order u/s. 153A r.w.s. 144 of the Act, dated 20.09.2021. Although the aforesaid conduct of the assessee needs to be deprecated, but at the same time, I am unable to persuade myself to concur with the manner in which the CIT(Appeals) had proceeded with and disposed off the appeal without adverting to the issue and the grounds, based on which, the impugned order was assailed before him. I am of the view that the CIT(Appeals) ought to have called for the records, and adjudicated upon the specific grounds of appeal, based on which, the impugned addition was assailed by the assessee before him. 16. I am unable to persuade myself to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In my considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non- prosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) 11 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 and (b), as well as the \"Explanation\" to Sec.251(2) of the Act reveals that the CIT(Appeals) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per the mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon'ble High Court had observed as under: \"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CITIA) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to 12 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.\" 17. I, thus, not being able to persuade myself to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the CIT(Appeals) shall in the course of the de-novo appellate proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty so substantiate his claim based on documentary evidence, if any. 18. As I have restored the matter to the file of the CIT(A) for fresh adjudication, therefore, I refrain from dealing with the merits of the case based on which the impugned addition has been assailed before me, which, thus, are left open. 19. Resultantly, the appeal filed by the assessee in ITA No.522/RPR/2024 for A.Y.2016-17 is allowed for its statistical purposes in terms of the aforesaid observations. 13 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 ITA Nos.521, 523 to 525/RPR/2024 A.Ys. 2014-15, 2017-18 to 2019-20 20. As the facts and issues involved in the captioned appeals remain the same as were there before me in ITA No. 522/RPR/2024 for A.Y.2016-17, therefore, the order therein passed while disposing of the said appeal shall apply mutatis-mutandis for disposing of the captioned appeals i.e., ITA Nos.521, 523 to 525/RPR/2024 for A.Ys. 2014-15, 2017-18 to 2019-20. In these case also, I restore the matter to the file of the CIT(Appeals) in terms of the observations recorded while disposing of the appeal of the assessee in ITA No.522/RPR/2024 for A.Y.2016-17. 21. In the result, appeals of the assessee in ITA Nos.521, 523 to 525/RPR/2024 for A.Ys. 2014-15, 2017-18 to 2019-20 are allowed for statistical purposes in terms of the aforesaid observations. 22. Resultantly, all the appeals filed by the assessee are allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 27th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 27th December, 2024. ***SB, Sr. PS 14 Mohammad Basir Ahamad Vs. DCIT, Central Circle, Bilaspur ITA Nos. 521 to 525/RPR/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "