RAJESH KUMAR GUPTA,PILIBHIT V. .ITO RANGE-2(4), PILIBHIT

ITA 583/LKW/2024

AI Insights

The case involves an appeal by Rajesh Kumar Gupta against the order of the Commissioner of Income Tax (Appeals) which dismissed his appeal in limine due to non-compliance with notices. The primary contention revolves around an addition of Rs. 2,75,693 to the assessee's income, treated as unexplained money under section 69A of the Income Tax Act, 1961. The assessee argued that the addition was based on a misunderstanding of the financial records and that all relevant details were provided during the assessment. The Income Tax Appellate Tribunal found that the CIT(A) had erred in dismissing the appeal without considering the merits and directed a re-assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471422 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 23-09-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR RAJWANSHI
• Assessee Lawyers: K. R. RASTOGI
• Keywords: Corroborative evidences; Non compliance
• Section: 147; 148; 250; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.583/LKW/2024 (Assessment Year: 2018-19) Rajesh Kumar Gupta Mohalla- Bakhtavar Lal Baraha Patthar Chauraha Wale, Bisalpur, Pilibhit-262001. v. The Income Tax Officer Range-2(4), The Assessment Unit Income Tax Department NFAC, New Delhi PAN:ARLPR2101H (Appellant) (Respondent) Appellant by: Shri K. R. Rastogi Respondent by: Shri Sunil Kumar Rajwanshi, Addl. CIT(DR) O R D E R PER ANADEE NATH MISSHRA, A.M.: 1. The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals) [hereinafter “the Ld. CIT(A)”]/National Faceless Appeal Centre (NFAC) u/s 250 of the Income Tax Act, 1961 (hereinafter “the Act”) dated 22/07/2024 for the assessment year 2018-19 wherein, the assessee’s appeal has been dismissed in limine for the reason of non compliance. The grounds of appeal of the assessee are as under: - “1. The. Ld. C.I.T. (A) fails to appreciate that there was a reasonable cause for not making compliances of notices send on email as Assessee is living in Remote Area and was not properly aware about e- filing portal and also there is lack of Internet and other infrastructure facilities. 2. The Ld. C.I.T. (A) fails to appreciate that Assessee has submitted along with Form No. 35 Statement of Facts, Grounds of Appeal with Annexures regarding addition of Rs. 2,75,693/being Excess Deposit in Bank u/s 69A of I. T. Act along with Reconciliation of Cash available out of sales and Cash deposited in Bank which is verifiable as per e- filing portal. ITA No.583/LKW/2024 Page 2 of 6 3. The Ld. C.LT. (A) did not appreciate that Assessee has submitted complete submissions along with supporting evidences and copy of Books of Account during Assessment regarding Cash / Funds deposit in bank during the year. However, Ld. A. O. without rejecting the books of accounts and point out any discrepancies in supporting evidences, made the addition of Rs. 2,75,693/- treating as Excess Credit in Bank Account as unexplained money w/e 69A of I. T. Act. 4. The Ld. C.I.T. (A) failed to appreciate that Ld. A. O. has not pointed out any defect in the submission and supporting evidences submitted during e-proceeding and also explained during Video Conferencing regarding availability of Cash / Funds credited in Bank Account, however, made part addition of Rs. 2,75,693/- as excess deposited in Bank by wrongly holding the difference between opening and closing Balance of the Sundry Debtors without appreciating that Excess Credit was due to credit in Bank Account being Gold Loan of Rs. 3,00,000/- taken by Assessee during the year. 5. The addition upheld is highly excessive, contrary to the facts and law and without allowing sufficient time and opportunity to have its say on the reasons relied upon by Ld. C.LT. (A).” 2. In this case, vide assessment order dated 23/03/2023, passed under section 147 read with section 144B of the Act, the assessee’s total income was determined at Rs.3,54,323/- as against the returned income of Rs.78,630/-. In the aforesaid assessment order an addition of Rs.2,75,693/- was made on account of unexplained discrepancy in opening balance and closing balance of debtors. The assessee’s appeal against the aforesaid assessment order was dismissed by the Ld. CIT(A) in his impugned appellate order dated 22.07.2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 22.07.2024 of the Ld. CIT(A). At the time of hearing before us, the Assessee was represented by Shri K. R. Rastogi, Ld. Authorized Representative (“AR”) and Revenue was represented by Shri Sunil Kumar Rajwanshi, learned Departmental Representative (“DR”) for Revenue. The Ld. AR for the assessee drew our attention to statement of facts which were submitted along with Form no. 36, accompanying the grounds of appeal, relevant portion of which is reproduced as under: - ITA No.583/LKW/2024 Page 3 of 6 “1. That the appellant's case for AY 2018-19 (FY 2017-18) was selected for scrutiny u/s 148 on the basis of information available on the Insight portal which is as under a. Total Cash deposits (including through bearers cheque) in Bank of Baroda current account, aggregate gross amount received from persons Rs. 1,51,71,500.00 2. That from time to time the appellant had filed reply of questionnaires issued by the Ld Assessing officer. 3. That during the course of proceedings it was duly explained by the appellant that the Appellant is a trader and the cash collected from sale proceeds were deposited in Bank, which was accepted by the Ld AO. 4. That in the final Show Cause Notice dt 16.03.2023, the Ld Assessing officer raised two queries, which were as under At Para 3.6 LD AO raised query - Why no Income Tax Audit was conducted when the gross receipts including GST and Cess was above Rs. 1 Crore. At Para 3.8 Ld AO raised query as under 3.8, As per the bank statement submitted by you it is seen that the total credits in the bank account amounts to Rs. 1,68,56,870/-. Total sale shown by you during the year under consideration is of Rs. 1,62,44,188/-. Therefore, there is an excess credit of Rs. 6,12,682/-. You are therefore, show-caused as to why the excess credit should not be treated as unexplained money and added to your total income for the AY under consideration. For both the queries, the Appellant in his reply dt 19.03.2023, submitted full explanation alongwith documents. The explanations offered by Appellant was rejected by the Ld AO and for Point raised at Para no 3.6 above, he has mentioned in the order that Penalty proceedings u/s 271AAC(1) of the IT Act are initiated separately and for second Point raised as per Para no 3.8 above, the Ld has made addition of Rs. 275693.00 in the return income. 5. That being dissatisfied and feeling aggrieved by the order passed by the Ld AO, this appeal is being filed before your goodself.” 2.1 The Ld. AR for the assessee further submitted that all the relevant details were submitted and explained to the Assessing Officer. He also submitted that the assessee was willing to once again explain the matter to the Assessing Officer on the basis of materials already available on record. Moreover, he submitted that the order passed by the Ld. CIT(A) is an exparte order qua the appellant assessee and has been passed without providing reasonable opportunity to the assessee. He also submitted that the impugned appellate order of the Ld. CIT(A) is not a speaking order on merits of the case, and that the Ld. CIT(A) dismissed the ITA No.583/LKW/2024 Page 4 of 6 assessee’s appeal in a summary manner, taking adverse view of non-compliance on the part of the assessee with notices issued by the office of the Ld. CIT(A). The Ld. AR for the assessee contended that the Ld. CIT(A) as well as the Assessing Officer failed to appreciate facts of the case in proper light and passed their orders due to misconstrued understanding of the relevant facts. In view of the foregoing, the Ld. AR for the assessee submitted that the issue in dispute may be restored back to the Assessing Officer with the direction to pass denovo assessment order in accordance with law, after providing reasonable opportunity to the assessee. The Ld. DR for the Revenue expressed no objection to this. 2.2 Both sides have been heard. Materials on record have been perused. On perusal of the impugned appellate order dated 22/07/2024 of the Ld. CIT(A), it is found that the Ld. CIT(A) dismissed the assessee’s appeal for want of prosecution, taking adverse view of non-compliance with notices issued by the office of the Ld. CIT(A). However, the Ld. CIT(A) has statutory duty, prescribed u/s 250(6) of the Act to pass a speaking order on the merits of the case, whether or not there was any representation from the assessee’s side. The order of the Ld. CIT(A) in disposing of the assessee’s appeal, is required to be in writing, and the order is further required to contain the point for determination, the decision thereon and the reason for the decision. Thus, it is the statutory duty of the Ld. CIT(A) to pass a speaking order on merits of the case. It can be readily inferred that dismissing the assessee’s appeal in limine, for want of prosecution, without going into the merits of the case was erroneous on the part of the Ld. CIT(A) having regard to provisions contained under section 250(6) of the Act. Moreover, although in the statement of facts (mentioned in foregoing paragraph no. 2 of this order); and in ITA No.583/LKW/2024 Page 5 of 6 oral submissions of learned AR for the assessee at the time of hearing, it has been contended from the side of the assessee that all relevant materials were placed before the assessing for explaining the discrepancy of the aforesaid amount of Rs.2,75,693/-; it is found on perusal of records that the relevant evidences and documents in support of this contentions have not been filed in the course of appellate proceedings in Income Tax Appellate Tribunal. 3. In view of the foregoing and as representatives of both sides are in agreement with this, in the specific facts and circumstances of the present case; the issue in dispute regarding the aforesaid addition of Rs. 2,75,693/- is restored back to the file of the Assessing Officer with the direction to pass denovo assessment order on this limited issue in accordance with law after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with the aforesaid direction. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 12/12/2024. Sd/- [ANADEE NATH MISSHRA] ACCOUNTANT MEMBER DATED: 12/12/2024 ITA No.583/LKW/2024 Page 6 of 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy// Assistant Registrar "