SH. ANIL KUSHWAHA ,TIKAMGARH V. ITO , TIKAMGARH

ITA 106/AGR/2023

AI Insights

The case involves Sh. Anil Kushwaha, who appealed against the order of the CIT(Appeals) which upheld the addition of Rs. 48,00,000 as unexplained money under Section 69A of the Income-tax Act, 1961. The addition was initially made by the Assessing Officer (AO) following a re-assessment order. The AO had noted unexplained cash deposits in the assessee's bank account, which the assessee claimed were proceeds from the sale of land by his grandfather. The CIT(Appeals) dismissed the appeal ex parte due to non-compliance by the assessee with the notices issued. The ITAT found that the CIT(Appeals) had not adequately addressed the merits of the case and had not conducted an independent inquiry, leading to the decision to remand the case back for a thorough examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23162 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-11-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 25-07-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Keywords: Set aside; Reassessment proceedings; Gift; Assessment record
• Section: 148; 144; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 106/Agr/2023 Assessment Year: 2013-14 Sh. Anil Kushwaha, 26, Mamon Darwaja, Tikamgarh. PAN: BSSPK0173K v. Income-tax Officer, Ward Tikamgarh. (Appellant) (Respondent) Assessee by : None (Adj. application filed- Adj. Appl. Rejected) Revenue by : Sh. Shailendra Srivastava, Sr. DR Date of hearing :26.11.2024 Date of Pronouncement :29.11.2024 ORDER This appeal in ITA No. 106/Agr/2023 for the assessment year 2013-14 has arisen from the appellate order dated 29.05.2023 (DIN& Order No. ITBA/NFAC/S/250/2023-24/1053295706(1)) passed by ld. Commissioner of Income-tax(Appeals), NFAC, Delhi, which in turn, has arisen from the re-assessment order passed by Assessing Officer u/s. 143(3)/147 of the Income-tax Act, 1961. ITA No. 106/Agr/2023 2 2. Grounds of appeal raised by the assessee in the memo of appeal filed with Income Tax Appellate Tribunal, Agra reads as under: 1. That CIT Appeal has erred on facts and in law while sustaining the addition for Rs. 48,00,000/- made by the AO u/s 69A of Income tax Act., no addition is liable to be made. Addition made at Rs. 48,00,000/- by the AO sustained by the CIT Appeal is liable to be deleted. 2. That while sustaining the addition for Rs. 48,00,000/-, the CIT Appeal has completely ignored the facts that the amount deposited with bank is fully explained being out of sale consideration of land sold by grand-father of the assessee, no addition u/s 69A is liable to be made, addition made by AO sustained by CIT Appeal is liable to be deleted. 3. That no proper opportunity was allowed them to the assessee prove to the case. 4. The appellant order passed by CIT Appeal is bad in law.” 3. Brief facts of the case are that the assessee has not filed return of income for the impugned assessment year. The case of the assessee was reported in Non Filer Management System, for the non-filers during the year. As per AIR information, there was cash deposit of more than Rs. 10 lacs in the Saving Bank Account maintained by the assessee with the Axis Bank, Tikamgarh. A system generated letter dated 05.08.2015 was issued to the assessee , but the assessee did not filed any response on the e-filing portal.As per AIR information,the AO observed that the assessee has deposited ITA No. 106/Agr/2023 3 cash of Rs.10,50,000/- in his S/B A/c maintained with Axis Bank, Tikamgarh. Notice dated 10.01.2018 u/s. 148 was issued by the AO after recording reasons for reopening of the assessment u/s 147. The assessee did not filed return of income in response to notice u/s 148, nor submitted any reply. Thereafter , the AO issued notices u/s 142(1) as well SCN’s u/s 144 during the course of re-assessment proceedings. Then, the assessee came forward and filed return of income on 14.12.2018 in response to notice issued by the AO u/s 148, declaring income of Rs. 1,66,260/-. The assessee also filed reply to SCN. The assessee also asked for the reasons recorded for reopening of the assessment , which were given by the Assessing Officer. On going through the case record, the Assessing Officer observed that the assessee has deposited cash of Rs.48,00,000/- in the saving bank account No. 913010004380829 maintained with Axis Bank, Tikamgarh instead of Rs. 10,50,000/- as reported in AIR information. The assessee explained that said cash deposit was out ofthe sale proceeds of parental agricultural land sold by his grandfather Shri Manohar Lal Kushwaha , and copy of registered sale deed of the three properties sold by his grandfather,with total consideration of Rs.60,40,000/- were submitted. Assessing Officer ITA No. 106/Agr/2023 4 observed that no evidences were furnished by assessee for depositing above mentioned sale proceeds received in his bank account, and cash deposits remained un-explained. The AO issued SCN dated 19.12.2018 to the assesse. The assessee duly filed reply but the assessing Officer observed that the properties were sold by his grandfather, and not by the assessee. The AO observed that the assessee has not filed any gift deed.The AO made addition of Rs.48,00,000/- in the hands of the assessee as unexplained money u/s. 69A of the Act. 4. Aggrieved, the assessee filed first appeal before ld. CIT(Appeals), which was dismissed by ld. CIT(Appeals)by upholding the order of the Assessing Officer. Ld. CIT(Appeals) issued three notices dated 16.01.2021, 11.01.2021 and 21.04.2023 to the assessee, but there was no compliance on the part of the assessee. Thus, the assessee did not participated in appellate proceedings before ld. CIT(A), and the appeal filed by the assessee stood dismissed by ld. CIT(A). 5. Assessee filed second appeal with ITAT, Agra Bench, Agra. None appeared on behalf of the assessee, when this appeal was called for hearing. However, adjournment application is filed, which is ITA No. 106/Agr/2023 5 rejected. Ld. Sr. DR relied upon the appellate order of ld. CIT(Appeals). 6. I have considered the entire material on record and heard ld. Sr. DR. I have observed that the ld. CIT(Appeals) has dismissed the appeal of the assessee ex parte in limine without deciding the issues arising in appeal on merits. There is no independent application of mind and reasoning by ld. CIT(A), and re-assessment order passed by the AO was upheld.I observe that the ld. CIT(Appeals)is required and obligated to pass order in compliance with the provisions of section 250(6), as ld CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. As per Section 250(6), the ld. CIT(A) has to state point for determination, his decision and reasoning thereof.No independent enquiry was made by ld. CIT(A)(Ref:Section 250(4)) while dismissing appeal of the assessee. The ld. CIT(A) even did not called for assessment records , before dismissing the appeal of the assessee. The assessee has clearly stated in Form No. 35 as well had submitted during re-assessment proceedings before the AO that the cash deposits in his saving bank account with Axis Bank were from the sale proceeds of the properties sold by his grand father, Mr. Manohar Lal Kushwah. The assessee ITA No. 106/Agr/2023 6 has filed copies of registered sale deeds before the AO during reassessment proceedings. Thus, the details of properties sold as well of the particulars of buyer/seller were on record before Revenue. Neither the AO nor ld. CIT(A) considered it fit to verify the details with Sub-Registrar to verify genuineness of the sale deeds , nor they considered fit to make independent enquiries u/s 131/133(6) from the buyer/seller of the properties, before prejudicing assessee and saddling assessee with huge tax liability. It is equally true that the assessee also on its part did not participated in appellate proceedings before ld. CIT(A) , despite notices issued by ld. CIT(A). The appellate order passed by ld. CIT(A) is clearly in violation of Section 250(6). The appellate order passed by ld. CIT(A) is not final , as it is subject to appellate proceedings with higher appellate authorities.The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the ITA No. 106/Agr/2023 7 minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld, and that the assessee has not submitted details/documents is not sufficient. The ld. CIT(A) is not toothless as his powers are co- terminus with the powers of the AO., which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents during appellate proceedings to support ITA No. 106/Agr/2023 8 his contentions. Thus, the assessee is equally responsible for its woes.Under these circumstances and in fairness to both the parties, in the interest of justice, the appellate order of CIT(A) is set aside , and the matter is remanded back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. I clarify that I have not commented on the merits of the issues in the appeal. I order accordingly. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 29th November, 2024. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 29th November, 2024 *aks/- "