MR ALTAF PATEL,PANVEL V. .ITO WARD 1, PANVEL

ITA 1449/PUN/2024

AI Insights

This case involves an appeal by Mr. Altaf Patel against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2013-14. The primary contention revolves around the incorrect consideration of gross receipts and presumptive income by the Income Tax Officer and the Commissioner of Income Tax (Appeals). Mr. Patel argued that the gross receipts from his Bank of Baroda account were inaccurately reported and that certain contra entries and cash withdrawals were not considered, leading to an inflated presumptive income assessment at 8% instead of a lower rate he sought based on his actual business activities and financial records. The Tribunal noted procedural lapses in how the Commissioner of Income Tax (Appeals) handled the appeal, particularly the failure to verify critical financial discrepancies and the lack of substantive engagement with the assessee's submissions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472111 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-07-2024
• Other Referred Cases: GKN Driveshaft Ltd Vs. ITO 259 ITR 19 (2003), Tata Capital Financial Services Ltd. v. ACIT [2022] 137 taxmann.com 315/287 Taxman 1 (Bom.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIR MANISH MEHTA
• Keywords: Presumptive income
• Section: 250

Judgement Text

" ।आयकर अपीलीय अिधकरण ”एस एम सी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1449/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year: 2013-14 Mr.Altaf Patel, House No.128, Bhusar Mohalla Panvel Raigad, Panvel – 410206. PAN: BCAPP4701L V s The Income Tax Officer, Ward-1, Panvel. Appellant/ Assessee Respondent / Revenue Assessee by None. Revenue by Shir Manish Mehta – Addl.CIT(DR) Date of hearing 05/12/2024 Date of pronouncement 11/12/2024 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] for Assessment Year 2013-14dated 21.05.2024 passed u/sec.250 of the Income tax Act, 1961. The Assessee has raised the following grounds of appeal : “1. We request sir to please admit bank of baroda statement which we could not obtain at the initial assessment stage since very less time was allowed and in the show cause notice the said bank details were not mentioned. The said bank statement filed at CIT(appeals) level ITA No.1449/PUN/2024 2 was also not considered By Honorable CIT(appeals) while making his order It was old record and other banks we obtained after huge hard work with bank. We pray to your honor that while considering the gross receipt of Bank of baroda The honorable Income Tax officer and Honorable CIT(appeals) have grossly erred. The Gross receipts of Bank of Baroda for year in question are Rs.21,65509/- and the following receipts must be reduced from the gross receipts being contra enteries like cheque dishonored and transfer to our own account elsewhere and cash deposit out of previous withdrawals The details there of are as follows contra entry for cheque dishonored Rs.458500(dt 2/5/12)., (Transfer to own account in DCB bank Rs.100000(15/09/12)., Transfer to own account in DCB bank account Rs.300000(15/09/12)., Transfer to Icici bank own account Rs.100000(05/1/12))(these transfer were considered in gross receipts of DCB bank and Icici bank). Cash withdrawal of Rs 450000 dt 03/05/12 considered as gross reciept for other banks hence these amounts needs to be reduced from Gross reciepts for working of the 8 percent being so the gross reciept of bank of baroda should be considered at Rs.2165509 (deposit in bank of baroda excluding bank interest on saving account) less above Rs.1408500 equal to Rs.757009/- hence total gross receipts will be Rs.3947509 and presumptive income of 8% will be Rs.315800 prayer to consider the ground of appeal. 2. Prayer before your honor that while working the presumptive income due consideration for Money returned back to customer and money given by account payee cheques to private limited companies were not considered by Honorable Income tax officer and hence we pray to give concession for rate of presumption on gross receipt to be considered at 5 Percent instead of 8 percent. Prayer to consider the ground of appeal. 3. Sir Show cause dictates cash deposit of Rs 2866000 and hence as per the show cause notice and gross receipt being considered by Hon AO the presumptive income of 8 percent should be worked out on Rs 2866000 since no other gross receipts were declared by Hon AO in his notice and hence assessee income must be considered Rs.229280 i.e.8 percent of Rs 2866000 Prayer to consider the ground of appeal.” Submission of ld.AR : 2. At the outset of hearing, no one appeared on behalf of the assessee. No request for adjournment was filed. Even for earlier ITA No.1449/PUN/2024 3 hearing dated 10.09.2024, no one had appeared and no adjournment letter was filed. In these facts of the case, we proceed the case as ex-parte. Submission of ld.DR : 3. The ld.Departmental Representative (ld.DR) for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). Findings & Analysis : 4. It is observed from Form No.35 filed by the assessee before the ld.CIT(A) that assessee had made following submissions before the ld.CIT(A) : “Sir I had a business of Haj Tours and travels but I suffered loss but in the assessment Honorable Assessing officer has applied presumptive income and treated my income as 8 percent of deposit in bank. However the deposit in bank of Baroda are 1400000 only and not 3263694 As such working of the presumptive income should be on 1400000 cash deposit in bank of baroda so total cash deposits after considering the 1400000 comes to 4550500 and working at 8 percent comes to 364040 as income Since there is difference in cash deposit of bank of baroda as per Honorable income tax officer records the appeal is made 2. Assessing officer has treated 8 percent as presumptive income on total cash deposit in all banks whereas the net cash deposit after cons- idering the withdrawals are only 2000000 (twenty lacs) only Hence I request to apply 5 percent presumptive rate on total cash deposit in bank hence the appeal 3. Various expences details and affadavit was given at the time of assessment BEFORE HONORABLE OFFICE OF CIT(APPEALS) ITA No.1449/PUN/2024 4 1. We Your Kind sir to please admit bank of baroda statement which we could not obtain at the initial assessment stage since very less time was allowed and in the show cause notice the said bank details were not mentioned. It was old record and other banks we obtained after huge hard work with bank. As could be seen from the bank of baroda statement the Cash deposit in bank of Baroda are only 1400000. as such it is request to your kind sir with huge cry of distress and hardship to please recompute the working of Honorable Assessing officer by taking 1400000 in place of 3263694 as cash deposit in bank of baroda since 1400000 figure as per the bank statement is correct figure so the total cash deposit in all banks will be 4550500 and 8 percent there of will be Rs 364040 ie income of the Assessee. We request your kind sir to please consider this ground 2. The Honorable officer while considering the income of the Assessee has charged presumptive rate on total cash deposit in all banks where as the net cash deposits in all banks after considering the cash deposit and cash withdrawals is only 2000000. As such it is requested to your kind sir to please consider 5 percent rate for presumption of the income of the assessee on the total cash deposit in all banks as such the presumptive income will be 5 percent of Rs 4550500 that is 227525 Honorable authority is requested to please consider this ground of appeal 3. Assessee request to add alter amend ground of appeal athe time of appeal and actual hearing 4 request to consider the appeal.” 4.1 However, it is observed that ld.CIT(A) has dismissed the appeal of the assessee without discussing the merits of the case. The relevant paragraph of the ld.CIT(A) is as under : “6. Decision: 6.1 Appeal has been filed against the order u/s 147, dated-29.09.2021, by PNE-W-(81)(1). In pursuance of appeal, this office has issued notices dated 08.12.2023, 03.01.2024, 03.04.2024 and 13.05.2024 ITA No.1449/PUN/2024 5 wherein the compliance dates were 18. 12. 2023, 12.01 2024, 10.04.2024 and 17.05.2024. 6.2 It can be seen that assessee has not furnished any reply and has not given any factual or legal details to come to conclusion different from that of AO. 6.3 Even otherwise, it was for assessee to furnish cogent evidence in support of its grounds of appeal. This has not been done Onus cannot be cast on this office to be an adjudicator and also a lawyer for the assessee when assessee is itself lax and uninterested in pursuing of his own appeal. 6.4 As a result, the appeal is held to be without merit and the same is hence Dismissed.” 4.2 Thus, ld.CIT(A) has not discussed the merits of the case. Ld.CIT(A) has not verified the claim of the appellant that there is discrepancy in the actual amount deposited in the Bank of Baroda account and the amount which has been considered by the Assessing Officer. The assessee claimed in his submission before the Ld.CIT(A) that actual deposits in the Bank of Baroda Account are only Rs.14,00,000/- where as the Assessing Officer has added Rs.32,63,694/- as deposits in the bank of Baroda Account. The Assessee had filed copy of the Bank Statement. The Ld.CIT(A) has not verified these facts at all. As per Section 250 of the Act it is the duty of the Ld.CIT(A) either to verify the facts himself or get it verified from the Assessing Officer. It seems the AO had not ITA No.1449/PUN/2024 6 bothered to get copy of Bank Statement from the concerned Bank. The AO has merely relied on the “AIR information”. It is observed that there was valid reason for non-compliance by the assessee .Assessee had also claimed that benefit of cash withdrawals may be provided. This fact also needs to be verified which neither Assessing Officer, nor ld.CIT(A) has verified. On plain reading of the Assessment Order we could not ascertain whether COPY of the reasons recorded for Reopening were provided to the Assessee or Not ! If Reasons Recorded have not been provided to the assessee the same must be provided to the assessee as held by Hon’ble Supreme Court in the case of GKN Driveshaft Ltd Vs. ITO 259 ITR 19 (2003). Subsequently Hon’ble Jurisdictional High Court in the case of Tata Capital Financial Services Ltd. v. ACIT [2022] 137 taxmann.com 315/287 Taxman 1 (Bom.) has laid down elaborate guidelines to be followed in reopening cases.Therefore, in the interest of justice, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide opportunity to the assessee. Assessee shall file all the necessary documents before the ld.CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose. ITA No.1449/PUN/2024 7 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 11th December, 2024. Sd/- Sd/- (VINAY BHAMORE) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 11th Dec, 2024/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "