PARUL SINGH DAHIYA, BEMETARA,BEMETARA V. INCOME TAX OFFICER, WARD-1(3), BHILAI, DURG

ITA 446/RPR/2024

AI Insights

The case involves Parul Singh Dahiya, the appellant, who contested the order of the Commissioner of Income-Tax (Appeals), which upheld the addition of Rs.2,24,48,220 as unexplained money under Section 69A of the Income-tax Act, 1961. The addition was initially made by the Assessing Officer (A.O.) following a re-assessment under Sections 147 and 144 of the Act, due to substantial unexplained deposits in the appellant's bank account. The appellant argued that the re-assessment and subsequent additions were made without proper notice and opportunity to present his case, violating principles of natural justice. The Tribunal noted that the appellant had not received proper notice of the appellate proceedings, as he had opted out of electronic communications, and thus did not participate in the proceedings before the CIT(Appeals).

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35712 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-11-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 14-10-2024
• Other Referred Cases: CIT v. P. Mohanakala, A. Govindarajulu Mudaliar v. CIT, Kavita Chandra Vs CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAL AGARWAL
• Assessee Lawyers: YOGESH SETHIA
• Keywords: Opportunity of being heard; Onus to prove; Principle of natural justice; Competent authority
• Section: 147; 148; 144; 142(1); 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.446/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2015-16 Parul Singh Dahiya 337/1, Bhatapara Naya Basti, Near PNK Farm, Ward No.20, Gudheli, Bemetara-490036 (C.G.) PAN : BBDPD2757G .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(3), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Yogesh Sethia, CA Revenue by : Shri Mohal Agarwal, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 18.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 19.11.2024 2 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 16.08.2024, which in turn arises from the order passed by the A.O under Sec.147 r.w.s. 144 of the Income-tax Act, 1961 (in short ‘the Act’) dated 23.03.2022 for the assessment year 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us: “1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax(Appeals), NFAC has erred in deciding the appeal ex-parte without proper service of the notice as per provisions of the Act despite Appellant opting out for service of notice u/s.250 of the Income-tax Act, 1961 through e- mail by stating \"No\" in relevant column of Form 35 and without deciding any of the grounds of appeal raised in Form 35 and without following the principles of natural justice. 2. In the facts and circumstances of the case and in law, initiation of re-assessment proceedings is illegal and without jurisdiction being initiated without fulfilling all the requisite conditions specified in section 147 to 151 of the Act. 3. In the facts and circumstances of the case and in law, learned Commissioner of Income Tax (Appeals), NFAC has erred in upholding order of learned Assessing Officer making addition of Rs.2,24,48,220/- as unexplained money u/s.69A of the Income- tax Act, 1961 without observing the principles of natural justice and without allowing reasonable opportunity to the appellant to explain his case. 4. The impugned order is bad in law and on facts. 5. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority.” 3 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 2. Succinctly stated, the A.O taking cognizance of the fact that the assessee during the subject year had made huge deposits (cash + others) of Rs.2,12.79,091/- in his current account No.251605500044 with ICICI Bank, Branch: Tatibandh, Raipur but had not filed his return of income, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act, dated 28.03.2021 was issued by the A.O. 3. As the assessee had neither complied with the notice u/s. 148 of the Act, dated 28.03.2021 nor furnished the requisite details as were called for by the A.O u/s. 142(1) of the Act, therefore, the latter held the entire amount of deposits in his bank account No.251605500044 with ICICI Bank, Branch: Telibandha, Raipur amounting to Rs. 2,24,48,221/-, viz. (i) cash deposits: Rs.2,00,82,680/-; and (ii) credit entries : Rs.23,65,541/- as the assessee’s unexplained money u/s. 69A of the Act. Accordingly, the A.O vide his order passed u/s. 147 r.w.s. 144 of the Act, dated 23.03.2022 determined the income of the assessee at Rs.2,24,48,220/-. 4. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). As the assessee failed to participate in the proceedings before the first appellate authority, therefore, the latter holding a conviction that the assessee was not interested in pursuing the appeal upheld the addition of Rs.2,24,48,221/- made by the A.O u/s. 69A of the Act. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: 4 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 “7. Decision:- I have carefully considered the grounds of appeal, assessment order and material available on record. Since the appellant has not furnished any submissions, this office is proceeding to decide the case based on material available on records. 7.1 In the case of appellant, the AO had information that the appellant had deposited amount of Rs. 2,12,79,091/- including cash in his current account No. 251605500044 held with ICICI bank, Tatiband Branch, Raipur in FY 2014-15. However, the appellant did not file his original return of income for FY 2014- 15 relevant to AY 2015-16. Hence, the case was reopened u/s 147 of the IT Act after obtaining prior approval from the competent authority. 7.2 Accordingly, notice u/s.148 of the act was issued on 28.03.2021 and served upon the appellant requiring him to file the return of income within 30 days from receipt of the notice. But the appellant did not file his return of income even in response to the notice u/s 148 of the act. Therefore, various notices u/s.142(1) of the act were issued and served upon the appellant. However, the appellant failed to comply with the notices. Hence, assessment proceedings were finalized u/s 144 r.w.s. 147 of the act on 23.03.2022 after making addition of Rs. 2,24,48,220/- on account of unexplained money u/s 69A of the act. 8 Being aggrieved with the said order u/s 144 of the act dated 23.03.2022; the appellant filed present appeal and raised only one grounds pertains to the addition made by the AO of Rs. 2,24,48,220/- on account of unexplained money u/s 69A of the act. 9. Ground: 01 9.1 During the appellate proceedings, various opportunities were granted to the appellant from time to time. However, the appellant did not avail of the opportunities granted to him. Hence, this appellate proceedings are adjudicated on the basis of details and material available on records. 9.2 As per assessment order, on analysis of bank statements of ICICI Bank Ltd., the AO noticed that the appellant had deposited amount of Rs. 2,00,82,680/- in cash and other amount of Rs. Rs. 23,65,541/- was credited in bank account no. 251605500044 held with ICICI bank, Tatiband Branch. Raipur. Thus, total deposits including cash totaling to Rs. 2,24,48,221 was credited in the said bank account held with ICICI bank Ltd. Therefore, various opportunities were granted by the AO to the 5 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 appellant during assessment proceedings to explain the sources of cash deposit and other credits in the above mentioned bank account. In response, the appellant neither filed his return of income in response to the notice u/s 148 of the act nor made compliance to a single notice during the assessment proceedings. 10. During the appellate proceedings, various opportunities were also granted to the appellant from time to time. However, the appellant did not avail of the opportunities granted to him. The appellant has not discharged its primary onus to prove the sources of cash deposits and other credits in his bank account. The appellant in its form 35, has submitted as under: \"The assessee has agriculturalist and having irrigated agricultural land of 25.20 Hec. (about 63Acres) situated at village Gudheli, Borsi, Ufra, Chandanu and Mungeli, owned 10.40 Hec. In self name and jointly with father 14.80 Hec. of lands. The assessee has been engaged in Fruits and Vegetables farming. The case has been selected for scrutiny because of Rs.2,24,48,221 deposited into hank. The assesse has not maintained regular books of accounts. The assessee has not received any information about scrutiny proceedings by post. The Registration of assessee in the Income Tax Portal has been done on 23/04/2022. The information regarding Scrutiny proceedings came to assessee knowledge only after registration done at IT portal. The Assessment Order has been passed on 23/03/2022 adding Rs. 2,24,48,221 being amount deposited into bank in Sec.147r.w.s.144.\" 10.1 The appellant has submitted that he had not received any information about scrutiny proceedings by post. In this respect, it is pertinent to mention here that during the assessment proceedings, a show cause notice along with the proposed addition was issued on 14.03.2022 and served upon the appellant through mail, though post and also through the affixture with request the appellant to comply with the notice by 17.03.2022. But no compliance was made even though the notice was served by affixture at the last known address of the appellant. Thus, contention of the appellant that he did not known about the assessment proceedings is not substantiated. 10.2 Even during the appellate proceedings, various notices u/s. 250 of the Act were issued to the appellant to provide submission on merit of the case. However, the appellant has failed to furnish any submission to substantiate the grounds of appeal. Thus, the appellant has failed to offer any explanation about the nature and source of cash deposits and other deposits 6 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 in bank accounts during the year, thus failing to discharge its primary onus to prove the sources of said cash deposits and other deposits. With respect to source of cash deposit, various courts have held as under:- Supreme Court in case of CIT v. P. Mohanakala [2007] 291 ITR 278 / 161 Taxman 169 held that the expression \"assessee offers no explanation\" means where the assessee offers no proper, reasonable and acceptable explanation as regards the sum found credited in the books maintained by the assessee.\" Supreme Court in case of A. GovindarajuluMudaliar v. CIT [1958] 34 ITR 807 (SC) held that \"The burden to prove the genuineness of cash credit lies on the taxpayer. If the assessee fails to prove satisfactorily the source and nature of amounts of cash received and creditworthiness of the creditor, the AO is entitled to draw inference that the receipts are of an assessable of an assessable nature.” The Hon'ble Punjab and Haryana High court in the case of Kavita Chandra Vs CIT [2017] 81 taxmann.com 317 (Punjab & Haryana)/[2017] 248 Taxman 358 (Punjab & Haryana)/[2017] 398 ITR 641 (Punjab & Haryana) has held as under:- \"Cash withdrawals were made for purpose of business and same was not available for redeposit and, assessee was unable to link cash withdrawn from bank to cash deposit, same would be held to be assessee's unexplained income\" 11. Based on the facts and legal positions discussed above, despite being provided with multiple opportunities. the appellant has remained non-compliant and has failed to discharge its primary onus to prove the nature and sources of cash deposits during the year. Therefore, it is presumed that the appellant is not interested in pursuing the appeal and does not have any concrete documents, explanation and evidence to substantiate the grounds of appeal. Hence, the source of cash amount of Rs. 2,00,82,680/- and other credits of Rs. 23,65,541/-in bank account no. 251605500044 held with ICICI bank, Tatiband Branch, Raipur is remained unexplained. Therefore in absence of any concrete documentary evidences I do not find any merit in the grounds of appeal. In view of the above no relief can be granted to the appellant. Therefore, addition of Rs. 2,24,48,220/- on account of unexplained money u/s 69A of the act is hereby confirmed. Ground — 01 is dismissed. 7 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 12. In the result the appeal is treated as dismissed.” 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Admittedly, it is a matter of fact borne from record that the assessee despite having been afforded four opportunities vide impugned service of notices electronically through ITBA had failed to participate in the proceedings before the first appellate authority. At the same time, we find substance in the contention advanced by the Ld. AR that as the assessee in the memorandum of appeal filed before the CIT(Appeals) in “Form 35” had specifically opted out of service of notice/communications from his office through email, therefore, he had remained unaware about the on- going appellate proceedings for which notices were issued electronically through ITBA and thus, for the said reason had failed to participate in the same. The Ld. AR in order to buttress his aforesaid claim had drawn our attention to “Form 35” which reads as under: (relevant extract) 8 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 8. We have thoughtfully considered the facts involved in the present appeal in the backdrop of the orders of the lower authorities. As stated by the Ld. AR, and rightly so, though the assessee/appellant in memorandum of appeal filed with the CIT(Appeals), i.e. in “Form-35” had specifically opted out of service of notices/communications from his office through email, but on all the four occasions the notices intimating fixation of appeal i.e. on 30.04.2024, 15.05.2024, 24.05.2024 and 07.08.2024 were issued electronically through ITBA. Accordingly, we concur with the claim of the Ld. AR that there were justifiable reasons for the assessee of having 9 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 remained unaware about the on-going appellate proceedings before the CIT(Appeals) due to which he had failed to participate in the same. Apart from that, we find substance in the Ld. AR’s contention that though the assessee in his “statement of facts” filed before the CIT(Appeals) had stated that the deposits in his bank account were sourced from fruit and vegetable farming that was carried out by him and his family members but the said material aspect had not been addressed by the CIT(Appeals). 9. Considering the totality of the facts involved in the present case which had resulted to passing of an ex-parte order by the CIT(Appeals), we are of the considered view that as the assessee-appellant for no fault on his part had remained divested of a sufficient opportunity to participate in the proceedings before the first appellate authority and substantiate his claim that the deposits in his bank account were sourced from his agricultural activities etc., therefore, the matter in all fairness requires to be restored to his file for fresh adjudication. Needless to say, the CIT(Appeals) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his aforesaid claim on the basis of fresh documentary evidence, if any. 10 Parul Singh Dahiya Vs. ITO, Ward-1(3), Bhilai ITA No. 446/RPR/2024 10. In the result, appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in open court on 19th day of November, 2024. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th November, 2024. **SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT, Raipur-1 (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "