SHUBHAMANGAL SADI DEPO,HINGOLI V. .INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT UNIT

ITA 1652/PUN/2024

AI Insights

The case involves Shubhamangal Sadi Depo, a partnership firm engaged in retail and wholesale cloth trading, which appealed against the order of the NFAC confirming an addition of Rs.12,25,000 as unexplained cash credits under section 68 of the Income Tax Act, 1961. The firm argued that the addition was incorrectly made as the funds were not related to the firm but to a partner, and that the firm had filed its Income Tax Return (ITR) along with a tax audit report. The Tribunal noted the absence of the assessee in previous hearings and the lack of a detailed examination of the merits of the case by the NFAC. The Tribunal found procedural lapses in the handling of the case and decided to remand the matter back to the Assessing Officer for a thorough re-examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474117 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOURABH NAYAK
• Keywords: Condonation of delay; Reasonable cause; Unexplained cash credit; Unexplained investment; Principle of natural justice; Source of fund
• Section: 250; 208; 44AB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1652/PUN/2024 \u000bनधा\u000fरण वष\u000f / Assessment Year : 2017-18 Shubhamangal Sadi Depo, H.No.2-413, Kabra Nagar, Near Ambika Talkies, Hingoli – 431 513 Maharashtra PAN : ACIFS7159N Vs. ITO, Ward & TPS Faceless Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal filed by the assessee pertaining to the assessment year 2017-18 is directed against the order dated 27.12.2023 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income Tax Act, 1961 [in short “ld.CIT(A)] which in turn arising out of Assessment order Assessee by : None Revenue by : Shri Sourabh Nayak Date of hearing : 16.12.2024 Date of pronouncement : 18.12.2024 ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 2 passed u/s.147 r.w.s.144 r.w.s.144B of the Act, dated 10.03.2022 2. Assessee has raised following grounds of appeal : “1. The learned CIT(A), National Faceless Appeal Centre, erred in law and on facts in confirming the addition of Rs.12,25,000/- made by the ITO, Ward & TPS. National Face Less Assessment Unit (\"AO\") on account of unexplained cash credits. 2. The learned CIT(A), National Faceless Appeal Centre erred in law and on facts in not appreciating the fact that assessee had duly explained the source of funds, deposited in the bank account of the firm and funds deposited of Rs.10,00,000 were not pertaining to the firm, but to the partner. 3. The learned CIT(A), National Faceless Appeal Centre further erred in law and on facts in not appreciating the fact that the assessee firm already filed the ITR along with Tax audit report under Sec. 44AB of the IT Act, but still he consider that no ITR was filed He completely ignored the fact that, while filing the Form No. 35, assessee firm mentioned the ITR acknowledgement no., date of filing and tax paid in the ITR. 4. Further CIT(A), National Faceless Appeal Centre wrongly understood that. Hemraj J Jethliya who was partner in firm has not filed the ROI, but firm filed the ITR. But Ld. AO as well as learned CIT(A), National Faceless Appeal Centre of the opinion that, firn not filed the ROI. But the fact is that firm filed the ITR, but partner Mr. Hemraj J Jethliya not filed the ITR in his individual capacity. 5. Alternatively & without prejudice, the learned CIT(A), National Faceless Appeal Centre erred in law and on facts in treating the addition made by the AO as unexplained investment u/s.69 of the ITA, 1961 instead of cash credits u/s.68 of the ITA, 1961. ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 3 6. The appellant assessee craves leave to add/modify/ delete all or any of the grounds of appeal.” 3. When the case was called for, none appeared on behalf of the assessee despite due service of notice of hearing. However, application for adjournment has been filed. Considering the fact that on the previous two dates of hearing also there was no representation and also considering the smallness of the issue coupled with the exparte assessment and further the ld.CIT(A)/NFAC having dismissed the appeal without dealing into merits of the case, I deem it proper to adjudicate the issue with the able assistance of ld. Departmental Representative ex parte qua the assesee. 4. At the outset, I find that the time appeal is time barred by 162 days before the Tribunal. The assessee has filed a condonation petition stating that the notice of hearing was received in spam and the assessee could not notice it. Further, the impugned order was not received physically through post. This is the precise reason which prevented the assessee in filing the appeal in time. ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 4 5. Having gone through the averments made in the condonation petition, I am of the considered opinion that the delay deserves to be condoned by virtue of decision of Hon’ble Jurisdictional High Court in the case of Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.) wherein it was held that in the matter of condonation of delay an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides. I therefore condone the delay of 162 days and proceed for adjudication of appeal. 6. Facts in brief are that the assessee are that the assessee is a partnership firm engaged in the business of Retail and Wholesale Cloth trading. It filed the return of income for A.Y. 2017-18 on 13.10.2017 declaring total income of Rs.44,999/-. Based on the information about cash deposit in the bank account during demonetization period, the ld. Assessing Officer (AO) selected the case for Limited Scrutiny. Due to non-response to the notices of ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 5 hearing sent, ld. AO completed the assessment making addition for alleged cash deposit as undisclosed income u/s.69A at Rs.12,25,000/- also invoked the provisions of section 115BBE of the Act and assessed the income at Rs.12,69,999/-. 7. Aggrieved assessee preferred appeal before the ld.CIT(A)/NFAC who dismissed the appeal of the assessee without discussing anything on merits of the alleged cash deposit issue. 8. Further aggrieved, the assessee is now in appeal before the Tribunal assailing the grounds extracted above. 9. Coming to merits of the appeal, I have heard the ld. Departmental Representative and perused the record placed before me. It is an admitted position that the assessee has not participated in the proceedings before the Assessing Officer. Even before the ld.First Appellate Authority, the assessee remained absent. Further, a mere perusal of the impugned order indicates that firstly no opportunity of hearing was granted to the assessee and secondly the ld.CIT(A)/NFAC has dismissed the appeal solely on the ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 6 ground that the assessee has not furnished the return of income as well as not paid the amount equal to the amount of advance tax which was payable by it and has only referred to sections 249(4), 243B(1) and 208 of the Act. However, this observation of ld.CIT(A)/NFAC regarding section 249(4) of the Act has no reference in the instant case. I also observe that the ld.CIT(A)/NFAC has also not decided the alleged cash deposit issue on merit as contemplated under the provisions of section 250(6) of the Act. Considering the facts in entirety and in the interest of principles of natural justice, without dwelling into merits of the issue, I deem it proper to set-aside the impugned order under challenge and remit it back to the file of Jurisdictional Assessing Officer to the stage of its institution with a direction to adjudicate the subject matter of alleged cash deposit denovo in accordance with law after providing reasonable opportunities to the assessee and pass a speaking order. Assessee is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by the Assessing Officer and should refrain from taking adjournments unless otherwise required for ITA No.1652/PUN/2024 Shubhamangal Sadi Depo 7 reasonable cause. Effective grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 18th day of December, 2024. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 18th December, 2024. Satish 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. "