NAHAR FINANCE & LEASING LTD.,CHENNAI V. ITO, CORPORATE WARD-4(2), CHENNAI

ITA 1884/CHNY/2024

AI Insights

The case involves M/s. Nahar Finance & Leasing Ltd, a non-banking financial company, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal arose from an assessment order by the Income Tax Officer, Corporate Ward 4(2), Chennai, for the assessment year 2017-18, which was based on substantial cash deposits made during the demonetization period, exceeding the reported turnover. The assessee's failure to provide adequate documentation to substantiate the sources of these deposits led to the addition of the entire amount of Rs.29,71,000 to its income under section 69A of the Income Tax Act, 1961. The CIT(A) upheld this addition due to non-submission of required documents by the assessee, prompting the appeal to the Tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29353 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 25-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 11-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V. JUSTIN; IRS
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Competent authority
• Section: 133(6)

Judgement Text

" आयकर अपीलीय अिधकरण ‘सी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ (SMC) BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA No.1884/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-2018) M/s. Nahar Finance & Leasing Ltd, Shop No.311, 19-20, Ram Lakhan Chamber, 3rd floor, General Muthiah Mudali Street, Chennai 600 079. [PAN: AAACN 3181G] Vs. The Income Tax Officer, Corporate Ward 4(2) Chennai. (अपीलाथȸ/Appellant ) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : None Ĥ×यथȸ कȧ ओर से /Respondent by : Shri. V. Justin, IRS, JCIT. सुनवाई कȧ तारȣख/Date of Hearing : 25.11.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 25.11.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2024-25/1064625546 (1) dated 03.05.2024. The assessment was framed by the Income Tax Officer, Corporate Ward 4(2), Chennai for the assessment year 2017-18 u/s.143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 21.11.2019. 2 ITA No. 1884/Chny/2024 2. Brief facts of the case are that the assessee is a non banking financial company engaged in the business of money lending and finance. The assessee filed its return of income on 19.01.2018 declaring total income of Rs.57,570/-. As per the information available with the department, it was noted that the assessee had deposited cash amounting to Rs.29,71,000/- in various bank accounts during the demonetization period F.Y. 2016-17 relevant to A.Y. 2017- 18 which exceeds the total turnover of Rs.14,65,886/- shown in the ITR by the assessee. Hence, the AO reopened the case of the assessee by issue of notice u/s.148 of the Act after obtaining approval from the competent authority. In response, the assessee filed return of income on 11.04.2019 showing gross receipts at Rs.14,65,886/- and declared net profit of Rs.57,570/-. The AO noted that the assessee filed its original return only after demonetization notices issued to the assessee. Thereafter, the AO issued notices u/s. 133(6) of the Act to Indian Bank, Sowcarpet Branch and Indian Overseas Bank, Wall Tax Road Branch calling for copies of the bank statements for the relevant year. In response, the banks submitted the copies of bank statements. It was shown that the assessee had deposited Rs.14,56,000/- in the Indian Bank and Rs.15,15,000/- in the Indian Overseas Bank during the demonetization period. The assessee was asked to produce ledger extract of the cash transactions made as well as cash book for the F.Y. 2016-17. However, the assessee has failed to produce any details / documentary evidences / sources of cash deposits. Thereafter, the AO issued show cause notice dated 10.10.2019, however, there was no response from the assessee. Hence, the AO made an addition of Rs.29,71,000/- (Rs.14,56,000+ Rs.15,15,000) u/s.69A of the Act to the total income of the 3 ITA No. 1884/Chny/2024 assessee. Aggrieved with the said additions/disallowances, the assessee preferred an appeal before the CIT(A). The CIT(A) vide order dated 31.03.2022 dismissed the appeal of the assessee since the assessee has not submitted any written submissions in support of its grounds of appeal and has only submitted copy of assessment order, grounds of appeal and statement of facts along with Form No.35. Aggrieved, assessee preferred an appeal before the Tribunal. The Tribunal vide order ITA No.576/Chny/2022 dated 30.08.2022 had set aside the order back to the file of the CIT(A) for fresh adjudication after due opportunity of being heard to the assessee. In compliance to the order of the Tribunal, the appeal has been uploaded in the ITBAvideappealNo.NFAC/2016-17/10197982 dated 14/09/2022. The case was fixed for hearing through ITBA on 19.10.2023, 30.10.2023,30.11.2023, 26.12.2023,13.03.2024 and 25.03.2024. Vide hearing notice, the assessee was asked to file Copy of audit report, balance sheet and ITR, PAN data, bank statements, cash flow statements etc. However, the ld. CIT(A) noted that the assessee has claimed that the source of impugned cash deposits is also partly explained out of cash withdrawals of Rs.18 lakhs from Indian Overseas Bank between 03.09.2016 to 26.10.2016. However, no cash flow details have been submitted and even the bank statements of later dates have been submitted 01.04.2020 to 31.03.2021, 01.04.2018 to 07.12.2020 but surprisingly the bank statement of the relevant F.Y. i.e. 01.04.2016 to 31.03.2017 has not been enclosed by the assessee, even though it was clearly called for from the assessee vide NFAC hearing notice dated 19.12.2023. As per the ld. CIT(A) assessee has not discharged its onus of proving the genuineness of its claim despite sufficient 4 ITA No. 1884/Chny/2024 opportunities provided by him. Accordingly, he confirmed the action of the ld. Assessing Officer. Aggrieved, assessee is in appeal before us. 3. Before us, none appeared for the assessee. The ld.DR stated that the assessee is habitual defaulter in not producing the documents required for appellate proceedings hence no lenient view is to be taken in this case and prayed for dismissal of appeal. 4. Though we concur with the submissions of Ld. Sr. Departmental Representative, however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for fresh adjudication on merits after affording proper opportunity of hearing to the assessee. The assessee is directed to submit all the required documents i.e. copy of audit report, balance sheet and ITR, PAN data, bank statements, cash flow statements etc to substantiate its case forthwith without any fail, failing which Ld. CIT(A) shall be at liberty to proceed with the disposal of the appeal on merits. 5. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 25th day of November, 2024 at Chennai. Sd/- Sd/- (मनोज क ुमार अŤवाल) (मनु क ुमार िगįर) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 25-11-2024 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Assessee 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "