SAKHINABEN SULEMAN MEDIWALA,SURAT V. .ITO, WARD 1(2)(6), SURAT

ITA 840/SRT/2024

AI Insights

The case involves Sakhinaben Suleman Mediwala, who appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed additions made by the Assessing Officer under sections 69A and 69 of the Income-tax Act, 1961, for unexplained cash deposits totaling Rs. 80,26,048 during the demonetization period. The Assessing Officer had made these additions after the assessee failed to comply with notices to explain the source of the deposits. The Tribunal found that the assessee was not given adequate opportunity to represent her case before the CIT(A) and thus remitted the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26801 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: PCIT vs. Ashokji Chanduji Thakor, CIT vs. S. N. Banerjee & Ors
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: SURESH K. KABRA
• Keywords: Set aside; Unexplained cash credit; Principle of natural justice
• Section: 144; 250; 69A; 139

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.840/SRT/2024 Assessment Year: (2017-18) (Physical Hearing) Sakhinaben Suleman Mediwala, C/o Umarjiali Musa Patel, 66, Rang Avdhut No.3, Ramnagar, Rander, Surat - 395005 Vs. The ITO, Ward – 1(2)(6), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: BRKPM1931L (Appellant) (Respondent) Appellant by Shri Suresh K. Kabra, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 05/12/2024 Date of Pronouncement 17/12/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 04.07.2024 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. The Ld CIT(A) – NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.37,58,000/- u/s 69A (Cash Deposit). 2. The Ld CIT(A) – NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.42,68,048/- u/s 69 (Other Deposit). 3. PRAYER 2 ITA No.840/SRT/2024/AY.2017-18 Sakhinaben Suleman Mediwala 3.1 The additions confirmed by the Ld CIT(A)-NFAC may be kindly deleted. 3.2 Personal hearing may be granted. 3.3 Any other relief that your honours may deem fit may be granted. 4. The assessee craves leave to add, amend, modify alter or delete any of the grounds at the time of hearing.” 3. Brief facts of the case are that as per information received from the DIT (Systems) on Departmental portal, the assessee had deposited cash of Rs.12,95,000/- in bank account No.022501000000870 of Bank of Baroda, Palej Branch and a cash of Rs.24,63,000/- in bank account No.017801008541 of ICICI Bank, Bharuch. During the demonetization period, the assessee made total cash of Rs.37,58,000/- with currency notes of Rs.500/- and Rs.1000/-. The assessee had not filed return of income u/s 139 of the Act. Various statutory notices and show cause notice were issued to the assessee. The Assessing Officer (in short, 'AO') held that assessee has failed to comply with the notices to explain source of cash amount of Rs.37,58,000/- and other credits of Rs.42,68,048/-. The AO issued show cause notice as to why the total deposit in her bank accounts should not be treated unexplained credits and added to the total income. There was no compliance to any notice issued by AO. The AO observed that adequate and sufficient opportunity has been given to the assessee and she has willingly ignored to comply with the notices. The AO relied on the decision of jurisdictional High Court in case of PCIT vs. Ashokji Chanduji Thakor, TA No. 710 of 2018, dated 27.06.2018 and passed order u/s 144 of the Act based on material available on record. The AO made two additions i.e., (i) Cash deposits 3 ITA No.840/SRT/2024/AY.2017-18 Sakhinaben Suleman Mediwala of Rs.37,58,000/- u/s 69A of the Act and (ii) other credits of Rs.42,68,048/- u/s 69 of the Act and taxed these additions @ 60% u/s 115BBE of the Act. Penalty proceedings u/s 271AAC of the Act were initiated. 4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued seven notices on 16.01.2024, 18.03.2024, 27.03.2024, 04.04.2024, 29.04.2024, 09.05.2024 and 27.05.2022. The assessee requested for adjournment and fix hearing on 18.06.2024. The CIT(A) accepted the request and granted time till 18.06.2024. But he failed to file any reply in response to the notices. Therefore, the CIT(A) has decided the appeal on the basis of the materials available on record including the assessment order. The CIT(A) relied upon the decisions of CIT vs. S. N. Banerjee & Ors, 10 CTR 354 (SC) and stated that to \"prefer an appeal\" would mean effectively prosecuting an appeal. The CIT(A) observed that the appellant had not been able to discharge the primary onus/burden statutorily and judicially cast upon him to substantiate the claims made in his appeal. The appellant was granted ample opportunities to furnish supporting document in support of grounds of appeal taken up by him. However, no explanation was offered by the appellant. The CIT(A) concurred with the findings of AO that appellant does not have any regular business and that there was no evidence of any business of the appellant on record nor any details were furnished before AO. No submission was made by the appellant in support of her grounds of appeal to explain source of deposits made in the bank accounts. The appellant failed to discharge 4 ITA No.840/SRT/2024/AY.2017-18 Sakhinaben Suleman Mediwala onus cast on her and failed to bring any evidence on record during the course of appellant proceedings to substantiate her grounds of appeal. Hence, CIT(A) confirmed the addition made by AO and dismissed the appeal. 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) has placed a copy of letter dated 20.05.2024 for allowing adjournment till 18.06.2024. He further submitted that the CIT(A) passed the order u/s 250 of the Act on 04.07.2024, which shows that the order was passed without hearing the assessee in violation of the principles of natural justice. The Ld. AR contended that assessee could not represent his case before CIT(A) and the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the CIT(A) due to circumstances beyond his control. Adequate opportunity of hearing was not given to the assessee, therefore, Id. AR contended that one more opportunity should be given to the assessee to plead his case before the AO. 6. On the other hand, learned Senior Departmental Representative (Id. Sr. DR) of the revenue supported the orders of lower authorities. He submitted that assessee has not filed return of income. He relied on the decision of PCIT vs. Ashokji Chanduji Thakor (supra), which is at page 10 of AO's order. He submitted that the adequate opportunities were given to the assessee during assessment proceedings as well as appellate proceedings. The assessee has 5 ITA No.840/SRT/2024/AY.2017-18 Sakhinaben Suleman Mediwala been negligent and non-cooperative due to which the addition made by the AO was rightly confirmed by CIT(A). 7. We have heard both the parties and perused the material available on record. It is an undisputed fact that the assessee has been totally non- cooperative to the statutory notices and the show cause notice issued to him by the AO and the CIT(A). There were total cash/credit deposits of Rs.80,26,048/- in different bank accounts maintained with Bank of Baroda and ICICI Bank Ltd. We also find that the CIT(A) had also issued seven notices which is at para 8 of the appellate order. Considering all these facts, we are of the view that the assessee was negligent and non-cooperative before the lower authorities. The Id. AR submitted that the non-compliance was neither deliberate nor intentional. He requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of Rs.20,000/- (Rupees twenty thousand only) by the assessee to the credit of the \"Gujarat High Court Legal Aid Authority\" within 2 weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass fresh assessment order in accordance with law after granting adequate opportunities of hearing to the assessee. The 6 ITA No.840/SRT/2024/AY.2017-18 Sakhinaben Suleman Mediwala assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the AO by not seeking adjournment without valid reasons. With this direction, the appeal of the assessee is allowed for statistical purposes. 8. Since, we have set aside the matter to the file of AO, the other grounds become academic in nature and do not require any adjudication. 9. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 17/12/2024. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 17/12/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "