MRS. SUSHILA SHRAVAN SONDAVALE,NAGPUR V. INCOME TAX OFFICER WARD 2(2), NAGPUR

ITA 136/NAG/2024

AI Insights

The case involves Mrs. Sushila Shravan Sondavale, a senior citizen and distributor for Vodafone Mpaise Pvt. Ltd., who appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of a substantial amount as unexplained money under section 69A of the Income Tax Act. The Assessing Officer had treated cash deposits in the assessee's escrow account as unexplained, leading to a significant tax demand. The Tribunal found that the Assessing Officer did not adequately investigate the nature of the bank account or the transactions, and the appellate order did not address the assessee's submissions effectively. Consequently, the Tribunal remanded the case for a thorough re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24185 (ITAT-NAGPUR)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-10-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 07-03-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: ADIBA CHINTANWAL
• Keywords: Set aside; Opportunity of being heard; Additional evidence
• Section: 142(1); 69A; 72

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.136/Nag./2024 (Assessment Year : 2018–19) Mrs. Sushila Shravan Sondavale 612, Behind Sadoday Apartment Kamptee Road, 10 Number Puliya Nagpur (Urban) Dr. Ambedkar Marg S.O. Nagpur 440 017 PAN – FFNPS3029N ……………. Appellant v/s Income Tax Officer Ward–2(2), Nagpur ……………. Respondent Assessee by : Ms. Adiba Chintanwal Revenue by : Shri Sandipkumar Salunke Date of Hearing – 10/10/2024 Date of Order – 25/10/2024 O R D E R PER K.M. ROY, A.M. The assessee has filed this appeal challenging the impugned order dated 11/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018–19. 2. The assessee has raised following grounds:– “1. That the learned Commissioner of Income Tax (appeals) dismissed the Appeal ex–parte without giving adequate opportunity of being heard to the Assessee. It in on the records that the Assessee is a Senior Citizen keeping indifferent health which was intimated to leaned Commissioner of Income Tax (Appeals) through letters seeking adjournment. 2 Mrs. Sushila Shravan Sondavale ITA no.136/Nag./2024 2. The Commissioner of Income Tax (Appeals) was not justified in confirming the Order of the learned Α.Ο. when the Assessee has submitted that whatever cash deposited in her Yes bank escrow account immediately gets transferred to Vodafone Mpaise Private Limited of which she is the distributor entitled only to a commission account she has no withdrawal facility from the bank account and is also entitled for commission for her services. 3. That the Commissioner of Income Tax(appeals) was not justified by confirming the Order of learned A.O. by treating the cash deposits in the YES bank Escrow account not belonging to Assessee as unexplained money U/s. 69A in the hands of the Assessee in the facts and circumstances of the case. 4. That Commissioner of Income Tax (Appeals) is not justified in ignoring the fact that learned A.O. has made this huge addition on hands of the Assessee without verifying the facts from the bank authorities regarding nature of bank account in the facts and circumstances of the case. 5. The Assessee craves leave to add/alter any of the grounds of appeal at the time of hearing.” 3. Facts in Brief:– The assessee is a Senior Citizen Woman, who had filed her return of income for the year under consideration on 29/08/2019, disclosing total income at ` 3,34,030. The assessee is engaged in the business with Vodafone Mpaise as one of the distributors in the Nagpur Region. 4. The Assessee is engaged with Vodafone Mpaise business as one of the distributors in the Nagpur region. The retailers were availing the benefit of deposit of cash in her account which is an escrow account with Yes Bank. The amount deposited in the said account is converted into Mpaise Money by the Vodafone Mpaise Pvt. Ltd. which is later on transferred to the respective retailers who had deposited cash or online transfer in her escrow account. The amount deposited by the retailers in the bank account of the assessee is 3 Mrs. Sushila Shravan Sondavale ITA no.136/Nag./2024 tracked by Vodafone Mpaise Pvt. Ltd. through Mobile Number of the assessee which also works as her I.D. The amount deposited by the retailers against the assessee’s I.D. is transferred to the account of Vodafone Mpaise Pvt. Ltd. by sweep system and the company in turn converts the same into Mpaise Money and transfers it back to the account of the assessee. The assessee further transfers the said amount to the retailer depositing the money. The assessee only earns a commission on the final sale of the retailers from the said Mpaise Money to the customer. The Assessee deposited the amount in her Escrow Account and earns a Commission @ 0.18% only on every transaction completed by the retailer towards the customer. Hence, to summarise, the Assessee gets 0.18% commission from Vodafone Mpaise Pvt. Ltd. on the total business generated through her. That since there was heavy cash deposited in her bank account with Yes Bank, the said transaction was reported in SFT 003 and SFT 004. The case of deposit and the return of income showed low profits. In the absence of any documents in explaining the cash deposits made by the assessee during the financial year 2017–18, the cash deposits of ` 7,05,28,208, as stated in notice dated 31/03/2021, under section 142(1) of the Act, was treated as unexplained money under section 69A of the by the Assessing Officer. Further, the Assessing Officer disregarded the submissions of the assessee and added ` 7,05,28,208, under section 69A of the Act which resulted in huge demand of ` 7,46,36,337, against the assessee. 5. The dismissed the appeal filed by the assessee by observing as under:– 4 Mrs. Sushila Shravan Sondavale ITA no.136/Nag./2024 “6. Finding & Decision The Assessing Officer had concrete information that there were deposits made in the account of the appellant in cash which formed the basis for assessment. Appellant was called upon through show cause notice to account for the deposits. However, the appellant merely filed the modus operandi of the business and stated that commission was her income. However, she did not furnish the details called for by the Assessing Officer which are forming part of the order. This office had issued notices calling for online submission to which the appellant did not respond. The appellant did not choose to file any additional evidence at the time of appellate proceedings to substantiate her claim. The onus is on the appellant to prove the source for cash deposits. Taking into account, the narration recorded by the Assessing Officer in the assessment order and in the absence of any documentary evidence forthcoming from the appellant substantiating the grounds taken I am constrained to uphold the assessment on account of failure on the part of the appellant to prosecute the appeal. In the result, the appeal is \"Dismissed\". 6. Before us, the learned Authorised Representative appearing for the assessee furnished a Paper Book containing following documents vide Vol.I of the Paper Book:– Sr. no. Particulars Annexure Page no. 1. Written Submissions – 1 – 6 2. Draft Assessment order dated 18/04/2021 Annexure–A 7 – 9 3. Assessment order dated 23/04/2021 Annexure–B 10 – 14 4. Agreement with Vodafone M Paise Pvt. Ltd. Annexure–C 15 – 35 Letter to Yes Bank dated 16/07/2022, Certificate from Yes Bank, Extracts of Bank Statement and reconciliation Annexure–D 36 – 58 Appellate Order u/s 25 dated 23/04/2021, Adjournment Application dated 16/12/2023, its screenshot and e–mail, Adjournment Application dated 02/08/2023, its screenshot and e–mail. Annexure–E 59 – 70 Form no.26AS Annexure–F 71 – 72 Letter to yes Bank dated 16/07/2022 Annexure–G 73 7. The learned A.R. also furnished Paper Book Vol.II containing additional documentary evidences and prayed that the additional evidences may be 5 Mrs. Sushila Shravan Sondavale ITA no.136/Nag./2024 admitted upon perusal of the assessment order. It is manifest that no enquiry or investigation was made by the Assessing Officer to dislodge the submissions of the assessee. He even did not care to collect the bank statement from Yes Bank. The appellate order is cryptic and is not a speaking order. The assessee being a Senior Citizen and an old lady needs to be sympathetically heard. In order to meet the ends of justice, the entire proceedings are hereby set aside to the Jurisdictional Assessing Officer for denovo adjudication with a direction to pass a speaking order after providing reasonable opportunity of being heard to the assessee. Thus, all the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 25/10/2024 Sd/- V. DURGA RAO JUDICIAL MEMBER Sd/- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 25/10/2024 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "