SHRI KAUSHAL NITINBHAI BHADESIYA,RAJKOT V. THE INCOME TAX OFFICER, WARD-3 (1) (3), RAJKOT

ITA 934/RJT/2024

AI Insights

The case involves Kaushal Nitinbhai Bhadeshiya, the appellant, who contested the addition of Rs. 16,32,413 as unexplained cash deposit in his bank account for the assessment year 2011-12. The Assessing Officer (AO) initially added this amount as unexplained money under section 69A of the Income-tax Act, 1961, following a reopening of the assessment. The appellant's appeal to the Learned Commissioner of Income-tax (Appeals) was dismissed, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found that the appellant was not given a fair opportunity to present his case at the lower levels and thus remitted the matter back to the AO for a fresh assessment, allowing the appellant to submit additional evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314520 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: BRIJESH PAREKH
• Keywords: Set aside; Additional evidence; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

"ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 1 आयकर अपीलȣय अͬधकरण, राजकोट Ûयायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBERAND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं/.ITA No.934/RJT/2024 Ǔनधा[रणवष[ / Assessment Year: (2011-12) Kaushal Nitinbhai Bhadeshiya 1-Shivalay Apartment, Arjun park, Nana Mava main Road, Rajkot -360 005 बनाम Vs. Income Tax Officer, Ward- 3(1)(3), Rajkot, Aaykar Bhavan, Race Course, Ring Road, Rajkot-360 001 Öथायीलेखासं /. जीआइआरसं /. PAN/GIR No.AKSPB 8792 Q (अपीलाथȸ/Appellant) .. (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Brijesh Parekh, AR राजèव कȧ ओर से/Revenue by : Shri Abhimanyu Singh Yadav, Sr-DR सुनवाई कȧ तारȣख /Date of Hearing : 05/05/2025 घोषणा कȧ तारȣख /Date of Pronouncement : 06/05/2025 आदेश/Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2011-12, is directed against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [in short ‘Ld.CIT(A)’], under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 11.11.2024, which in turn arises out of an assessment order passed by the Assessing Officer u/s 144 r.w.s 147 of the Act, dated 20.12.2017. 2. The grounds of appeal raised by the assessee are as follows: “1) The grounds raised in this appeal are without prejudice to one another. ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 2 2) The Learned AO erred I law and on facts in making an addition of Rs.16,32,413/- alleged to be unexplained cash deposited in the bank account of the appellant a/c No.47103001006489 with Citizen Co-Op. Bank Ltd. and the Learned CITA) erred in law and on facts in retaining addition in the order under appeal dtd. 11/11/224. On the facts and the circumstances of the case it is contended that the cash deposited in bank account was out of regular cash flow generated in the business of Chaniya Choli done by the appellant and was fully explainable. 3(A) The Learned AO and the Larned CIT(A) erred in law and on facts in not appreciating the fact that cash deposited in the bank was fully explainable. 3(B) The Learned AO and the Larned CIT(A) in this regard proceeded on erroneously presumption and premises while deciding the issue and making the contested addition. 4) The Learned AO erred in law and on facts in reopening the assessment when the same was not warranted on the facts of the case and was not in accordance with the law. It is respectfully submitted that the reopening proceedings, as they are, be held to be bad in law and without jurisdiction. 5) The appellant being the person not that conversant with the intricacies and procedures of tax law and appeal proceedings, could not explain the case, and the additional evidences as may be filed in the curse of hearing of this appeal before the Honourable Bench may kindly be admitted as additional evidences, in the interest of justice, as the same are of material and substance in deciding the issue under appeal. 6) The charge of interest under the various provisions of the Act may kindly be ordered to be deleted. &) Alternatively and without prejudice the matter may kindly be set aside for deciding a fresh. 8) Your appellant craves leave to add, alter, amend or withdraw any of the grounds stated hereabove.”” 3. Brief facts qua the issue are that assessee filed his return of income for the year under consideration. As per the information from the ITS during financial year 2010-11 the assessee has made cash deposit of Rs.14,74,100/- in the saving bank account maintained with the Citizen Co-Op. Bank Ltd. It was noticed by the AO that the appellant had made deposit remained unexplained and case was reopened u/s 144 of the Act after recording the reasons and obtaining necessary approval from higher authority on 23.03.2017. Accordingly, notice u/s 148 of the Act was issued on 26.03.2017. Subsequently, notice u/s 142(1) was issued from ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 3 time to time but assessee has not bothered to furnish any details explanation in this regard. Accordingly, final show cause notice was issued and date of hearing fixed on 27.11.2017. The assessee failed to comply such show cause notice. In absence of any satisfactory explanation total cash deposits amounting to Rs.16,32,413/- made in saving bank account was treated as unexplained money u/s 69A of the Act and added to his total income. 4. Aggrieved by the order of Assessing Officer the assessee carried the matter in appeal before the Ld.CIT(A). The Ld. CIT(A) issues notice u/s 250 of the Act four times on the assessee. Out of which assessee responded by filing letter dated 20.02.2023 and 05.05.2023 requesting for adjournment. During the appellate proceedings, appellant had not filed any submissions in response to any notice issued. Therefore, Ld. CIT(A) confirmed the addition made by Assessing Officer and dismissed the appeal of assessee. 5. Aggrieved by the order of Ld.CIT(A) assessee is in further appeal before us. 6. The Ld. Counsel for the assessee argued that assessee wants to file additional evidences and also submitted that assessee was unable to submit before the lower authorities due to unavoidable circumstances. The Ld. Counsel submitted that this clearly substantiates the nature and source of cash deposit as well as assessee’s claim made u/s 69A of the Act. The Ld. Counsel of the assessee submits that the Ld. CIT(A) passed ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 4 the order u/s 250 of the Act on 11.11.2024 without hearing the assessee which is in violation of the principles of natural justice. The assessee could not represent his case before Ld. 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 Ld. CIT(A) due to circumstances beyond his control. Adequate opportunity of hearing was not given to the assessee; therefore, Ld. Counsel contended that one more opportunity should be given to the assessee to plead his case before the AO. He undertakes to be vigilant and furnish explanation and details expeditiously. 7. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue supported the order of lower authorities. He stated that assessee has been negligent in pursuing the appeal before CIT(A). 8. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. We find that both lower authorities have passed ex parte orders. Evidently, the assessee did not comply with the notices issued by AO and Ld. CIT(A). Hence, addition of cash deposit of Rs.16,32,413/- u/s 69A of the Act have been made by AO, which was confirmed by CIT(A). The Ld. Counsel of assessee submitted that non-compliance by assessee was not deliberate but due to unavoidable circumstances. He has submitted various details which were not submitted before AO or Ld.CIT(A). Rule-29 permits ITAT to admit ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 5 additional evidence for any substantial cause. The Ld. Counsel for the assessee submitted that non-compliance was due to unavoidable circumstances. Hence, the additional evidences are admitted. After considering the contentions of both parties, we find that the Ld. CIT(A) has not passed an order as per the mandate of section 250(6) of the Act and dismissed the appeal of assessee only on the ground of non- compliance. The order passed by the Ld.CIT(A) is clearly violative of the express provisions of section 250(6) of the Act, which provides that the appellate orders of the Ld.CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the Appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the fact that the assessment order was confirmed by Ld. CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. In the interest of justice, we set aside the order of Ld.CIT(A) and remit the matter back to the file of AO with a direction to pass fresh order in accordance with law after granting adequate opportunity of hearing to assessee. However, on account of non-compliance attitude of the assessee, a cost of Rs.2,000/- (Rupees two thousand only) is imposed on the assessee, which shall be deposited with the Prime Minister Relief Fund, within 15 days from the date of receipt of this order. The assessee is directed to be vigilant and to furnish ITA No.934/Rjt/2024 (AY-11-12) Kaushal N Bhadeshiya 6 all details and explanation as needed by AO and not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee are treated as allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 06/05/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR.ARJUNLAL SAINI) Æयाियक सदÖय/JUDICIAL MEMBER लेखा सदÖय/ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 06/05/2025 DKP Outsourcing Sr.P.S आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ(अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाडªफाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण ,राजकोट "