SATISHCHANDRA KASHINATH PATEL ,NASHIK V. ITO WARD 3(1), NASHIK

ITA 1588/PUN/2024

AI Insights

This case involves an appeal by Satishchandra Kashinath Patel against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs.15,85,380 as unexplained income under section 69A of the Income Tax Act. The appellant had deposited this amount in two banks during the demonetization period, claiming it was from the sale of immovable property belonging to his HUF in 2010. The Assessing Officer (AO) and NFAC were not convinced by the appellant's explanations, leading to the appeal. The Tribunal found the NFAC's dismissal of the appellant's explanations unreasonable and in violation of the principles of natural justice, thus remitting the matter for a fresh decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471161 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 06-08-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B. S. RAJPUROHIT
• Keywords: Principle of natural justice

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1588/PUN/2024 \u000bनधा\u000fरण वष\u000f / Assessment Year : 2017-18 Satishchandra Kashinath Patel, Plot No.9 and 10, B/H.Moti Mangal Karyalaya, Hari Om Nagar, Arty Center Road, Nashik – 422 102, Maharashtra PAN : ABJPP6490R Vs. ITO, Ward-3(1), Nashik Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 07.06.2024 for the assessment year 2017-18. 2. Brief facts of the case are that the appellant is an individual, filed the return of income for the A.Y. 2017-18 on 18.12.2017 declaring total income of Rs.4,03,180/-. The return was processed u/s.143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS. Statutory notices u/s.143(2)/142(1) along with questionnaire were issued to the appellant requiring him to explain the sources of cash deposits of Rs.15,85,380/- (13,78,880 + (2,06,500) made with Nashik Merchants Co.op Bank Ltd. and State Bank of India respectively. The appellant filed written submissions stating that cash deposited during the demonetization Assessee by : None Revenue by : Shri B.S.Rajpurohit Date of hearing : 10.10.2024 Date of pronouncement : 10.10.2024 ITA No.1588/PUN/2024 2 period was received from sale of immovable property belonging to the HUF, in the year 2010. In support, the appellant submitted the sale deed copy and further stated that the said sale consideration was not deposited in the bank owing to dispute among the members of the HUF. 3. In order to verify the genuineness, the AO issued summons u/s.131 to Mr. Deepak Kashinath Patel, a member of the HUF. Statement of Mr. Deepak Kashinath Patel was recorded. He stated that the sale proceeds were received towards the land sold in the year 2010. The total consideration received was Rs.34,00,000/- out of which Rs.20,32,000/- was distributed among the members and the balance was kept with elder member of the HUF (the appellant) for meeting the legal charges and the litigations going on. In the absence of furnishing of PAN of the HUF and the return filed by the HUF, the AO held that the appellant had cooked up some story to prove the sources of cash deposits made by him in the above mentioned two banks. Eventually, the AO made addition of cash deposits of Rs.15,85,380/- as unexplained income u/s.69A and taxed the same invoking the provisions of section 115BBE of the Act. 4. Being aggrieved by the above assessment order, an appeal was filed before the NFAC, who vide impugned order confirmed the action of the Assessing Officer. 5. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 6. When the appeal was called on, none appeared on behalf of the appellant despite due service of notice of hearing. I therefore proceed to dispose of the appeal ex parte after hearing the ld. Departmental Representative. 7. I heard the ld. Sr. DR and perused the material on record. I had carefully perused the assessment order as well as the order of NFAC. The ITA No.1588/PUN/2024 3 solitary issue relates to addition u/s.69A of Rs.15,85,380/- for unexplained cash deposit in the saving account with Nashik Merchants Co.op Bank Ltd. and State Bank of India. The appellant had tendered explanation before the AO as well as the NFAC which is extracted on page 3 of the impugned order. The NFAC had merely extracted the explanation of the appellant and proceeded to dismiss the appeal by holding as under : “Unfortunately for the appellant, this submission does not hold any strength, and fails hugely on merit. The argument that the money in question was kept in a locker for six years, and then got deposited after a span of six years does not hold water with me.” The above conclusion reached by the NFAC is unreasonable. It is most unfair on the part of the NFAC to arrive such a finding, without giving any reason as to why the explanation of the appellant is unacceptable. I therefore hold that the finding given by the NFAC is in violation of principles of natural justice. In the circumstances, I deem it appropriate to remit the matter to the file of CIT(A)/NFAC for de novo disposal of the issue in appeal on merits by passing a speaking order after allowing reasonable opportunity to the appellant, in accordance with law. I order accordingly. 8. In the result, the appeal filed by the appellant is partly allowed for statistical purposes. Order pronounced on this 10th day of October, 2024. Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 10th October, 2024. Satish ITA No.1588/PUN/2024 4 आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "