SRI ANIL KUMAR AGARWAL,RANCHI V. ACIT, CENTRAL CIRCLE-2, RANCHI

ITSSA 24/RAN/2022

AI Insights

The case involves an appeal by Sri Anil Kumar Agarwal against the order of the Commissioner of Income Tax (Appeals), Patna-3, which was passed under section 250 of the Income Tax Act, 1961 for the assessment year 2012-13. The primary contention was that the CIT(A) had passed the order ex-parte without providing a reasonable opportunity of hearing to the appellant. Additionally, the appellant challenged the initiation of proceedings under section 153A, the estimation of profit at 8% on alleged unaccounted transactions, and the charging of interest under sections 234A and 234B on the assessed income. The Tribunal found merit in the appellant's argument regarding the lack of a reasonable opportunity to be heard and thus remanded the case back to the CIT(A) for a fresh decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 32765 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: misc
• Appeal Filed On: 18-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Search and seizure
• Section: 250; 153A; 139(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL \"RANCHIBENCH\",RANCHI Shri Partha Sarathi Chaudhury, Judicial Member Shri Ratnesh Nandan Sahay, Accountant Member IT(SS)A No.24/RAN/2022 Assessment Year: 2012-13 Sri Anil Kumar Agarwal, Jokhiram Market, Upper Bazar, Ranchi - 834001 [PAN: ACCPA5990P]............…...…………Appellant vs. Assistant Commissioner of Income Tax, Central Circle- 2, Ranchi, Office of the Asst. Commissioner of Income Tax, Central Circle-2, 7th Floor, Mahabir Tower, Main Road, Ranchi - 834001...........................Respondent Appearances by: Assesseerepresented by :None Department represented by :Shri Shiv Swaroop Singh, CIT(DR) Date of concluding the hearing :20.11.2024 Date of pronouncing the order :29.11.2024 ORDER Per Ratnesh Nandan Sahay, Accountant Member: This appeal filed by the Assessee is against the order of the Ld. Commissioner of Income Tax (Appeals), Patna-3[hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2012- 13, dated 29.04.2022. 2. The assessee has raised the following grounds of appeal: \"1. For that Ld.CIT(A) was not justified in passing the order ex.- party without giving any reasonable opportunity of hearing. In this case, only one notice U/s 250 was issued on 17-03-2022 against IT(SS)A No.24/RAN/2022 Sri Anil Kumar Agarwal 2 which compliance was sort for on a before 08-04-2022. On 08-04- 2022, we had filled for adjournment which was not considered by Ld.CIT(A) who passed this order without considering the actual facts and disposing all the relevant grounds of appeal. As such the order passed by Ld. CIT(A) is unjustified illegal and bad in law. 2. For that the Ld. AO was not justified in initiating proceedings U/s 153(A) for the current assessment year being beyond the scope of 6 years since there was no material on record to suggest that income of assessee to the tune of rupees fifty lakhs or more has escaped assessment. As such this very proceeding U/s 153(A) is bad in law and assessment made thereby is fit to be quashed. 3. For that Ld. AO was not justified in estimating the profit at the rate of 8% on the alleged an accounted transactions as against the average book profit of 1.72% to 1.73%. There is no basis on which profit can be estimated at 8% and such the addition with Rs. 62,674/- is unjustified and fit to be deleted. 4. For that Ld. AO was not justified in charging interest U/s 234A and 234B on the assessed income. Following the decision of Hon'ble Jharkhand High Court interest if any, is to be charged on the return income and not on the assessed income. 5. For that other grounds in detail will be argued at the time of hearing.\" 3. The facts of the case, in brief, are that search and seizure operation u/s 132(1) of the Act was carried out in Balaji Paper Group of cases who is engaged in the business of wholesale trading/manufacturing of paper and real estate business. During the course of search operationvarious documents were found and seized which included the details of two bank accounts- one with Kotak Mahindra Bank, Main Road, Ranchi and another in Kotak Mahindra Bank, Gandhi Maidan, Patna having bank Account Nos. 0411111524 and 0411138286 respectively. The said bank accounts stood in the name of Shr. Rajesh Roy, one of the staff members of Balaji Paper and News Prints Pvt. Ltd. Though, in his IT(SS)A No.24/RAN/2022 Sri Anil Kumar Agarwal 3 statement recorded on oath during the course of search & seizure proceedings, Mr. Rajesh Roy denied to have any such bank accounts in his name but subsequently during the assessment proceedings, he admitted that the bank accounts were in his name but he operated these bank accounts on behalf of the assessee, Shri Anil Kr Agarwal. Regarding the cash deposit of ₹ 9,98,000/- made during the F.Y. 2011-12, he stated that he used to collect the amounts from different parties against the sales of papers and deposited the same in these bank accounts. The Assessing Officer then assumed jurisdiction u/s 153A of the Act and initiated proceedings u/s 153A of the Act against the appellant and asked the appellant to file its return of income. In response to that,the appellant requested the Assessing Officer to treat the original return filed u/s 139(1) of the Act as the return filed u/s 153A of the Act. The Assessing Officer then, after considering all aspects of the case came to the conclusion that the cash deposit of ₹ 9,98,000/- was made by the appellant which was hitherto undisclosed to the income tax department. The Assessing Officer thereafter, added a sum of Rs.79,840/- @ 8% of the total cash deposit of ₹ 9,98,000/- to the total income of the assessee. 4. Aggrieved by the order of the Ld. Assessing Officer the appellant preferred appeal before the Ld. CIT(A). The Ld. CIT(A) vide the IT(SS)A No.24/RAN/2022 Sri Anil Kumar Agarwal 4 impugned order dismissed the appeal of the assessee on the ground that during the appellate proceedings. Before the Ld. CIT(A), the assessee failed to produce any evidence to controvert the findings of the Assessing Officer. 5. Aggrieved by the order of the Ld. CIT(A), the appellant has preferred this appeal but no one appeared before us. Thus, the case is decided on merit. 6. We have considered the rival submissions and it is found that the Ld. CIT(A) decided the case of the appellant exparte without giving him reasonable opportunity to explain its case which is against the principles of natural justice. We find merit in the grounds raised by the appellant that he should have given a reasonable opportunity of being heard to explain its case and thus, we think it proper to remand the matter back to the file of Ld. CIT(A) to decide the case on merit by providing the appellant a reasonable opportunity of being heard. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 29.11.2024. Sd/- Sd/- [Partha Sarathi Chaudhury] [Ratnesh Nandan Sahay] Judicial Member Accountant Member IT(SS)A No.24/RAN/2022 Sri Anil Kumar Agarwal 5 Dated: 29.11.2024. AK, PS (on tour) Copy of the order forwarded to: 1.Sri Anil Kumar Agarwal 2.Assistant Commissioner of Income Tax, Central Circle- 2, Ranchi 3. CIT(A) 4. Pr.CIT 5. CIT(DR) 6. Guard File //True copy// BY ORDER, (Senior Private Secretary) (On Tour), ITAT, Ranchi "