SUNNY,PATIALA V. ITO, W-1, PATIALA

ITA 807/CHANDI/2023

AI Insights

The case involves an appeal by the assessee, Sunny, against the order of the CIT(A) which sustained the original assessment adding Rs. 19,07,000 as unexplained money under Section 69A of the Income Tax Act, 1961. The assessee had deposited this amount in his bank accounts during the previous year relevant to the assessment year 2017-18. The original assessment was made under Section 144 due to non-compliance by the assessee in responding to notices. The CIT(A)'s order was challenged on grounds of lack of proper hearing and incorrect confirmation of the addition. The Tribunal found merit in the assessee's contention regarding the violation of natural justice due to the long gap between the last notice and the order, leading to the remand of the case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472693 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 19-12-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: RAJIV SALDI
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 144; 142(1); 69A

Judgement Text

" आयकर अपील य अ\u000bधकरण,च\u0010डीगढ़ \u0014यायपीठ , च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’ CHANDIGARH BEFORE: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER, आयकर अपील सं./ ITA No. 807/CHD/2023 \u0001नधा\u0005रण वष\u0005 / Assessment Year : 2017-18 Sunny, 111, Block-D, Royal Green Colony, Chaura, Patiala. बनाम VS The ITO, Ward-1, Patiala. \u000eथायी लेखा सं./PAN /TAN No: CESPS8130K अपीलाथ\u0019/Appellant \u001a\u001bयथ\u0019/Respondent \u0001नधा\u0005\u001cरती क\u001f ओर से/Assessee by : Shri Rajiv Saldi,CA राज\u000eव क\u001f ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr. DR तार\"ख/Date of Hearing : 01.10.2024 उदघोषणा क\u001f तार\"ख/Date of Pronouncement : 29.10.2024 PHYSICAL HEARING आदेश/ORDER PER PARESH M. JOSHI, JM This is an appeal filed by the assessee under Section 253 of the Income Tax Act, 1961 before this Tribunal as and by way of second appeal. The relevant assessment year is assessment year 2017-18. The corresponding previous year is from 01.04.2016 to 31.03.2017. The assessee is aggrieved by the order bearing No. ITBA/NFAC/S/250/2023-24/1057220538 (1) dated 19.10.2023 which is hereinafter referred to as the “impugned order”. ITA 807/CHD/2023 A.Y. 2017-18 2 Factual Matrix 2. The assessee is an individual who had deposited Rs.19,07,000/- in his bank accounts with Kotak Mahindra Bank and Oriental Bank of Commerce during the previous year relevant to the assessment year 2017-18. The ld. AO issued notice(s) under Section 142(1) of the Income Tax Act, 1961 but the assessee did not respond to such notice(s) in an effective manner including the hearings so fixed. Thus, after issuing required notices and giving the opportunities of hearing, the assessment was concluded under Section 144 of the Income Tax Act, 1961 by adding Rs.19,07,000/- as unexplained money under Section 69A of the Act. The assessee is running a small golgappa stall. Return of income is not on record as not filed. In original assessment proceedings there is no compliance to notice(s) dated 10.03.2018, 24.04.2019, 29.07.2019, 20.08.2019, 30.08.2019, 05.09.2019, 12.09.2019, 19.09.2019 and 17.10.2019. The original assessment order bears No. ITBA/AST/S/144/2019- 20/101910453 (1) dated 28.10.2019 under Section 144 of the Income Tax Act, 1961 wherein the income is computed as Rs.19,07,000/-. Return of income was not filed. 3. The assessee being aggrieved by the aforesaid assessment order prefers first appeal before ld. CIT(A) in terms of Section 246A of the Income Tax Act, 1961 who by impugned order passed ITA 807/CHD/2023 A.Y. 2017-18 3 under Section 250(6) has sustained the original assessment order dated 28.10.2019. 4. The assessee being aggrieved by the impugned order of ld. CIT(A) has preferred second appeal under Section 253 to this Tribunal and has raised following grounds of appeal in form 36 which are as under : 1. That the CIT(A) has wrongly passed an ex-party order without providing a proper opportunity of being heard as the last hearing notice was of 18.05.2022 and the order is passed on 19.10.2023 i.e. after almost 17 months of last notice. 2. That the Order of CIT(A) is against the facts on record. 3. That the CIT(A) has wrongly confirmed the addition of Rs. 19.07,000/- without any basis whereas the appellant has specifically stated that the deposits are from the sale proceeds, past savings and bank withdrawals. 3. That the CIT(A) has wrongly confirmed the addition on account of the deposits of Rs 5,78,000/- made in the bank account of father of appellant in which appellant was a second holder. 4. The appellant craves leave for reserving the right to add, alter, modify, amend or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 5. The appellant craves leave for reserving the right to add, alter, modify, amend or forego any ground(s) of appeal at any time before or during the hearing of this appeal. Record of Hearing 5. The hearing in the matter took place before this Tribunal on 01.10.2024 when both the ld. AR for and on behalf of the assessee and ld. DR for and on behalf of the Revenue were heard on their respective contentions for some time. The sum and substance and in final analysis there was near unanimity that ITA 807/CHD/2023 A.Y. 2017-18 4 the impugned order be set aside and matter be remanded back to ld. CIT(A) for fresh adjudication on denovo basis. The ld. AR emphatically informed us and contended that the last opportunity which was afforded by the ld. CIT(A) was on 18.05.2022 whereas impugned order is dated 19.10.2023 i.e., after 17 months of last notice. Therefore, there is violation of principles of natural justice. No hearing was afforded and ex- parte order is passed by the ld. CIT(A). Findings and conclusions 6. In the premises as aforesaid laid down by us, we are of the considered view that both the assessment order under Section 144 as well as first appellate order under Section 250(6) are not meritorious in nature. The income computation during a year must be on real time basis after rival contentions of both the parties are analyzed which unfortunately has not happened. The assessee is also expected to be vigilante in so far as assessment proceedings are concerned. Most of the time assessee goes in slow motion and avoid proceedings by not responding to notice(s) of Department, not appearing before ld. AO, not following up with CA/Advocates. The Department official who discharges quasi judicial function of adjudication and adjudgement are time bound too. Be that as it may, we, therefore, set aside the impugned order on grounds of natural justice and remand the case back to ITA 807/CHD/2023 A.Y. 2017-18 5 the file of ld. CIT(A) with a direction to him to afford a reasonable opportunity to the assessee of a personal hearing before the case is finally decided. The ld. CIT(A) to pass a well reasoned order on merits of the case. Order 7. In the result, the impugned order is set aside as and by way of remand to the file of ld. CIT(A). 8. The appeal of the assessee is allowed for statistical purposes. Order pronounced on 29.10.2024. Sd/- Sd/- (VIKRAM SINGH YADAV) ( PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क\u0002 \u0003ितिलिप अ\tेिषत/ Copy of the order forwarded to : 1. अपीलाथ\u000f/ The Appellant 2. \u0003\u0010यथ\u000f/ The Respondent 3. आयकर आयु\u0014/ CIT 4. िवभागीय \u0003ितिनिध, आयकर अपीलीय आिधकरण, च\u0018डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड\u001c फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "