RAJ KUMAR GUPTA, DANTEWADA,DANTEWADA V. INCOME TAX OFFICER, WARD-JAGDALPUR, JAGDALPUR

ITA 339/RPR/2024

AI Insights

The case involves Shri Raj Kumar Gupta, the appellant, who contested the order of the CIT(Appeals), National Faceless Appeal Centre, Delhi, which was based on an ex-parte decision under Section 144 of the Income Tax Act. The primary contention was the non-consideration of the appellant's written submissions regarding the additions made to his income for the assessment year 2009-10, which included unexplained cash deposits and interest income. The Tribunal found that the CIT(Appeals) had not adequately addressed the appellant's submissions or the specific objections raised against the additions made by the Assessing Officer under Section 68 of the Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469743 (ITAT-RAIPUR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 09-10-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 23-07-2024
• Other Referred Cases: CIT Vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: VEEKAAS S SHARMA
• Keywords: Set aside; Business income; Opportunity of being heard; Assessment record
• Section: 144; 143(2); 250; 143(1); 68; 139; 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 No.339/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2009-10 Shri Raj Kumar Gupta, Near Shitla Mata Mandir, Sanjay Nagar Ward, Kailash Nagar, Dantewada, 494449, Chhattisgarh PAN : ANPPG0419B .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward Jagdalpur, Beside Jhankar Talkies, Kumharpara, Jagdalpur -494001, C.G. ……Ĥ×यथȸ / Respondent Assessee by : Shri Veekaas S Sharma, CA. Revenue by : Dr. Priyanka Patel, Sr. DR. सुनवाई कȧ तारȣख / Date of Hearing : 09.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 21.10.2024 2 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), [for short, CIT(A)], National Faceless Appeal Centre (NFAC), Delhi, dated 20.02.2023 for A.Y. 2009-10, which in turn arises from the order u/s 144 of the Act, dated 26.12.2011 passed by the Assessing Officer (for short, the AO). 2. The grounds of appeal raised by the assessee are extracted as under: “1. On the facts and in the circumstances of the case, the order passed by the Learned CIT(Appeal), NFAC, Delhi is bad-in-law, illegal and unsustainable inasmuch as there is no adjudication on merit of any of the ground of appeal and the Learned CIT(Appeal), NFAC, Delhi has not taken into consideration the written submission duly submitted by the assessee on 24.11.2017 in the office of CIT (Appeal)-II, Raipur, consequently, the ex-parte order passed by the CIT(Appeal), NFAC, Delhi is liable to be set aside. It is prayed that the order passed by the CIT(Appeal), NFAC, Delhi may kindly be held to be illegal. 2. Without prejudice to the above, on the facts and in the circumstances of the case, the Learned A.O. has erred on facts and in law in making addition of Rs.12.09.048/- by invoking Section 68 in respect of cash deposits in the bank account of the assessee held in State Bank of India on account of several reasons, more particularly, when the bank statement does not constitute books of accounts, as such, the addition made u/s 68 is illegal. It is prayed that the addition of Rs.12,09,048/- made by invoking Section 68 in respect of cash deposits in the bank account may kindly be held to be bad-in-law and consequential enhancement made to the total income may kindly be directed to be deleted. 3. Without prejudice to the above, on the facts and in the circumstances of the case, the Learned A.O. had erred on facts and in law and the 3 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 Learned CIT(Appeal), NFAC, Delhi has erred in confirming the addition of RS.12.09.048/- made on account of cash deposited in the bank account by invoking Section 68 inasmuch as the assessee had declared turnover of Rs.29,878,987/- in the return of income and declared net profit @ 5% in terms of Section 44AF of the Income Tax Act, 1961 and the cash was deposited in the bank account out of cash received from retail sale of goods in the ordinary course of the business, as such, cash deposits represented the business receipts of the assessee, therefore, the addition so made is arbitrary, unjustified, irrational and unsustainable. It is prayed that addition of Rs.12,096,048/- may kindly be directed to be deleted. 4. On the facts and in the circumstances of the case, the Learned AO has erred on facts and in law in making addition of Rs.9,82,973/- in respect of closing balance in the bank account of the assessee held in State Bank of India, Dantewada as on 31.03.2009, the addition so made is contrary to facts and law and hence, liable to be deleted and the Learned CIT(Appeal) has arbitrarily confirmed the said addition, therefore, unsustainable. It is prayed that addition of Rs.9,82,973/- may kindly be deleted. 5. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal.” 3. Succinctly stated, the assessee had filed its return of income u/s 139 of the Act for AY 2009-10 on 15.10.2009 declaring his total income at Rs.1,49,400/-. The returned income of the assessee was processed as such u/s 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. 4. During the course of assessment proceedings, the AO observed that the assessee during the year under consideration, i.e over the period 02.04.2008 to 31.01.2009 had made cash deposits of Rs.15,32,000/- in his bank account No.10753280430 with State Bank of India, Branch: Dantewada. As the assessee 4 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 despite having been afforded 12 opportunities had failed to participate in the assessment proceeding, therefore, the AO was constrained to proceed on an ex- parte basis. As is discernible from the assessment order, the AO held cash deposits of 12,09,048/- (out of Rs. 15,32,000/-) as unexplained cash deposits u/s 68 of the Act. Also, the AO made an addition of interest income of Rs.25,697/- that was received by the assessee in his aforesaid bank account. Also, the A.O taking cognizance of the fact that the assessee had failed to come forth with any explanation as regards the balance amount of Rs.9,82,973/- in his aforesaid bank account, thus, made an addition of the same to his returned income. Accordingly, the AO vide his order u/s 144 of the Act, dated 26.12.2011 determined the income of the assessee at RS. 23,77,120/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. For the sake of clarity, the observations of CIT(A) are culled out as under: “The present filed appeal is directed against order u/s 144 of the Income Tax Act (herein after referred as ‘Act), issued by AO on 26.12.2011 for the assessment year 2009-10. 2. Aggrieved with the order issued by the AO, the appellant has filed present appeal on 23.01.2012. In the course of appellate proceedings, it is seen that the appellant was issued and served various notices u/s 250 of the Act from this office to present his contentions and any supporting documents. The said notices were issued right from 2020 through till 2022 and all of them remain uncompiled with. The National Faceless Appeal Centre (NFAC) also in November, 2022 enabled communication window to facilitate filing of submissions by the appellant but to no avail. 5 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 3. In view of the above, it is clear that the appellant is not interested in prosecuting the present appeal because there has been no response as yet. In view of the above, the appeal stands dismissed. Thus, the appeal filed by the appellant stands dismissed.” 6. Assessee being aggrieved with the order of ld. CIT(A) has carried the matter before the Tribunal. 7. I have heard the learned authorized representatives of both the parties, and perused the material available on record. 8. Shri Veekas S. Sharma, learned Authorized Representative (for short, ld. AR) for the assessee at the threshold submitted that the ld. CIT(A) without taking cognizance of the “written submissions” that were filed with him had disposed of the appeal based on a non-speaking order. Elaborating on his contention, ld. AR submitted that the assessee not only had filed “written submissions” before the CIT(A) but had also filed a rejoinder to the “remand report” that was received by him from the A.O. The Ld. AR submitted that as the CIT(A) had failed to take cognizance of the written submissions/rejoinder that were filed by the assessee, and had disposed the appeal vide a non-speaking order, therefore, the same is liable to be set aside. 9. Per contra, Dr. Priyanka Patel, learned Senior Departmental Representative (for short, ld. Sr.DR) relied upon the orders passed by the lower authorities. 6 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 10. Admittedly, it is a matter of fact discernible from the record that the ld. - CIT(A) had disposed of the appeal based on a non-speaking order. Although, it is the ld. AR’s claim that “written submissions”, dated 24.10.2017, Page Nos. 2 to 10 of APB were filed by the assessee with the CIT(A), and he had based on the same called for a “remand report” from the A.O, but I find no whisper of the same in the body of the appellate order. Apart from that, I find that the CIT(A) had failed to deal with the specific objections that were raised by the assessee and had summarily dismissed the appeal without giving any cogent reason. 11. Although, there is no denying the fact that the assessee had not participated in the proceedings before the CIT(Appeals), but I am of a firm conviction that irrespective of the non-participation by the assessee appellant, the CIT(A) should have called for the assessment record, and only after consulting the same dealt with and disposed off the grievances of the assessee based on a speaking order. I am unable to persuade myself to accept the manner in which the appeal of the assessee has been summarily 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 after addressing the issues based on which the assessment order was assailed before him, and it is not open for him to summarily dismiss the appeal on the basis of his general observations regarding the non-prosecution of the matter by the assessee appellant before him. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act, reveals that the CIT(A) 7 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 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 CIT(A) 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 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 8 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 12. I, thus, not being able to persuade myself to subscribe to the summary dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same after addressing the specific issues on which the impugned assessment order had been assailed before him. Needless to say, the CIT(Appeals), in all fairness, shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee. The grounds of appeal raised by the assessee are disposed off in terms of the aforesaid observations. 13. In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on day 21st of October, 2024. Sd/- Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 21st October, 2024. **#Hem/ 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-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 9 Shri Raj Kumar Gupta Vs. ITO, Ward-Jagdalpur ITA No.399/RPR/2024 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True copy // //True Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "