VINOD KUMAR DHANJA,AJMER V. INCOME TAX OFFICER, AJMER

ITA 342/JPR/2025

AI Insights

The case involves Shri Vinod Kumar Dhanja, who appealed against the order of the ld. Addl. CIT(A), Raipur, which dismissed his appeal for non-prosecution regarding the assessment year 2012-13. The primary issues in the appeal were the treatment of bank deposits as undisclosed receipts and the addition of presumptive income of 8% on these deposits. The Income Tax Officer (ITO) had treated the total deposits of Rs.1,06,98,682 as undisclosed receipts and added Rs.8,55,895 as presumptive income. The CIT(A) dismissed the appeal due to the appellant's non-compliance with procedural notices. The tribunal, however, decided to restore the matter to the CIT(A) for a decision on merits, highlighting the importance of providing an opportunity of being heard.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314157 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs Multiplan India Ltd., Estate of Late Tukojirao Holkar vs. CWT, New Diwan Oil Mills vs. CIT, CIT vs. B. N. Bhatachargee and Another, M/s Bindra Warehousing Corporation vs ITO, Jabalpur Sahkari Dugdh Sangh vs ITO, Ask Chemicals India Private Limited Vs. DCIT, Circle-1(1), Pune
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: SANJEEV JAIN
• Keywords: Business income; Opportunity of being heard; Salary income; Presumptive income
• Section: 148

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.342/JPR/2025 fu/kZkj.k o\"kZ@Assessment Years : 2012-13 Shri Vinod Kumar Dhanja Plot No. 25, Gali No.2, Jagdamba Colony, Foysagar Road, Ajmer- 305 001 cuke Vs. Income Tax Officer, Ward -2(1), Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ANUPD 2219 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Sanjeev Jain C.A. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 21/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 06 /05/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of the ld. Addl. CIT(A), Raipur dated 22-01-2025 for the assessment year 2012-13 raising therein following grounds of appeal. ‘’1. The ld. CIT(A) has erred in law as well as on facts of the case by dismissing the appeal instead of deciding the Appeal on merits with information/ documents available on record. 2. That the ld. CIT(A) has erred in law as well as on facts of the case by not correcting the action taken by the AO of treating 2 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER total deposits of Rs.1,06,98,682/- in bank account as undisclosed receipts. 3. The ld.CIT(A) has erred in law as well as on facts of the case by not defending the addition of Rs.8,55,895/- made on account of presumptive income of 8% on total deposits in bank accounts 2.1 Apropos grounds of appeal, it is noticed that the ld. CIT(A) has dismissed the appeal of the assessee for non-prosecution by observing as under:- ‘’Findings and Decision 3 The appeal was taken up, and notices of hearing were issued to the appellant dated 05.01.2021, 12.04.2021, 05.08.2024 and 07.12.2024 requiring the appellant to file written submissions by 20.01.2021, 27.04.2021, 20.08.2024 and 23.12.2024 respectively. However, the appellant neither responded on those dates nor sought any adjournment. No written submissions were filed either In view of the appellant's repeated disregard for the notices, it was clear that the appellant was not interested in pursuing the appeal. 3.1 By repeatedly failing to comply and not filing any written submissions, the appellant has shown that he is not interested in pursuing the appeal. In view of these facts, I have no alternative but to dismiss the appeal for non-prosecution, as it cannot be kept pending for an indefinite period. It is the appellant's duty to make necessary arrangements for effective representation on the appointed date. Mere filling of an appeal is not enough; effective prosecution is also required. Therefore, the appeal is liable to be dismissed. This view is supported by the following judicial pronouncements: (i) CIT vs Multiplan India Ltd. 38 ITD 320(Del) (ii) Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.) 3 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER (iii) New Diwan Oil Mills vs. CIT (2008) 296 ITR 495 (P&H) (iv) CIT vs. B. N. Bhatachargee and Another 118 ITR 461 (SC) 3.2 The Hon'ble ITAT, Jabalpur Bench, Jabalpur in the case of M/s Bindra Warehousing Corporation, Itarsi vs ITO, ITA No. 153/Jab/2016 and in Jabalpur Sahkari Dugdh Sangh vs ITO, ITA No. 201 to 203/Jab/2015 has found assessee as not interested in pursuing appeal on the basis of just one non-attendance before the Hon'ble Tribunal. The Tribunal has dismissed appeals for non-prosecution. The Tribunal has held as follows:- \"At the time of hearing, none appeared on behalf of the assessee. The notice of hearing was sent to the assessee through RPAD, but there was no compliance on behalf of the assessee. Even no application seeking adjournment was filed. The laws aid those who are vigilant, not those who sleep upon their rights. This principle is embodied in well-known dictum \"VIGILANTIBUS ET NON DORMIENTIBUS JURA SUBVENIUN Under these circumstances, in our considered opinion assessee is not interest in prosecuting the appeal. As such we hold that this appeal is liable to be dismissed for non-prosecution.\" 3.3 Respectfully, following the view taken in the cases cited at paragraph-3.1 above and the decision of the Hon'ble ITAT, Jabalpur Bench, Jabalpur in the cases cited (supra), the appeal filed by the appellant is liable for dismissal for non-prosecution. 4. In the result, the appeal is dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee has filed following detailed written submission relating to the grounds of appeal raise above and submitted that the ld. CIT(A) has dismissed the appeal in limine for non- 4 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER prosecution instead of deciding the same on merits and further requested to quash the order passed by the ld. CIT(A). ‘’Grounds of Appeal - No. 1:The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by dismissing the Appeal instead of deciding the Appeal on merits with information/documents available on record. Detailed Submission: 1. The assessee had preferred an Appeal before Ld. CIT(Appeal) against Assessment Order passed by Ld. Assessing Officer by submitting Form 35 alongwith all the documentary evidences relied upon on dated 28/12/2019. 2. Notices for hearing of appeal were issued by the Ld. CIT (Appeals) on dated 05.01.2021 & 12.04.2021 and again after a gap of 3 years on dated 05.08.2024 & 07.12.2024 through email communications. 3. Sir, the assessee is a salaried employee, working with a private share broker firm. Being not well versed with the scheme of e-proceedings in appeals, due to some unavoidable circumstances, he could not participate in the proceedings with respect to Appeal filed by him. 4. Sir, all the documentary evidences in support of the contention of the assessee was duly uploaded alongwith Form 35 at the time of filing Appeal. Therefore, Ld. CIT should have decided the case of the assessee on merits by adjudicating the issue raised in appeal. 5. However, Ld. CIT(Appeal) has dismissed the Appeal in limine for non- prosecution via Order u/s 250 dated 22/01/2025 instead of deciding the case on merits. 6. The assessee would like to bring to your kind attention to the case law of Ask Chemicals India Private Limited Vs. DCIT, Circle-1(1), Pune wherein Hon'ble Pune ITAT held that \"NFAC should go into to the merits of the 5 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER issue in appeal and dispose the appeal\" Hon'ble Pune ITAT stated that \"Now, the law is settled to the extent that the Commissioner of Income Tax (Appeals) is bound to dispose of the appeal on merits even in the case of ex- parte orders. The settled positions of law mandate the Commissioner of Income Tax (Appeals) to dispose of the appeal by adjudicating the issue raised in appeal on merits\" (Refer Page No. 1 to 3 of Paper Book). In the case of the assessee, Ld. CIT(Appeal) has dismissed the Appeal in limine for non-prosecution instead of deciding the case on merits. Keeping in view the above, you are requested to quash the Order u/s 250 passed by Ld. CIT(Appeal) and provide due relief to the assessee. Grounds of Appeal - No. 2:- The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by not correcting the action taken by Ld. Assessing officer of treating total deposits of Rs.1,06,98,682/- in bank accounts as undisclosed receipts. Detailed Submission: 1. The summary of all the credit entries in the bank account of the assessee is as follows: Particulars Amount of deposits (in Rs. T/f from India Nivesh Commodities Pvt Ltd. 53,33,942 Cash deposit 39,43,500 SB interest 1,900 ATM withdrawals Reversal 20,000 Other clearing Receipts (non cash) 15,94,451 Total 1,08,93,793 2. In support of the above, the assessee has provided supporting documents to your goodself, the details are as under 6 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER Bank Statements of all Bank Accounts: Refer Page No. 4 to 21 of Paper Book Ledger of the assessee with India Nivesh Commodities Private Limited: Refer Page No. 22 to 23 of Paper Book 3. The assessee had made cash deposits in his bank account out of available cash in hand and had transferred the same in his Commodity a/c maintained with India Nivesh Commodities Private Limited in order to transact in commodities. At the time of settlement of the transaction, the assessee had obtained pay out the excess funds lying in his Commodity a/c to his bank account and the same was withdrawn by the assessee. During the relevant A.Y the assessee had made Total Cash Withdrawals of Rs.42,58,420/- Subsequently, the assessee had again made cash deposits in his bank account and transferred the funds to Commodity a/c in order to deal in commodities. Sir, as explained earlier, the assessee had deposited cash in his bank account and had transferred the same in his Commodity a/c and thereafter at the time of settlement he had obtained payout of excess funds lying in his Commodity a/c. Hence in order to complete one transaction, the assessee had two credit entries in his bank account le for Cash Deposit as well as for Payout obtained. In the Assessment Order passed by Ld. Assessing Officer, Ld. Assessing Officer had treated both the credit entries as part of Undisclosed Receipts. The assessee had made total cash deposits and cash withdrawals of Rs.39,46,200/- and Rs.42,58,420/- respectively during the year under consideration. From the above explanation, it is very much clear that the assessee had made deposits as well as withdrawals in his Bank account for inter transfer of funds between his Bank account and India Nivesh Commodities Private Limited. Sir, from the above explanation of rotation of funds, the nature and source of credit entries is fully explained and supported by proper documentary 7 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER evidences. However, the Ld. Assessing Officer has made addition of 8% on entire credit transactions of Rs. 1,06,98,682/-which is totally unjustified. Therefore, you are requested to kindly delete the addition made by Ld. Assessing Officer on alleged undisclosed receipts of Rs.1,06,90,682/-and provide due relief to the assessee. Grounds of Appeal - No. 3:- The Ld. Commissioner of Income Tax (Appeal) has erred in law as well as on facts of the case by not deleting the addition of Rs.8,55,895/-made on account of Presumptive Income of 8% on total deposits in bank accounts. Detailed Submission: 1. Sir, the assessee had already explained with submission to Ground of Appeal No. 2, the Rotation of Funds as well as nature of source of all credit entries in the bank accounts of the assesseo 2. Hence, keeping in view the same, total credit entries in the bank accounts of the assessee cannot be treated as Gross Receipts of the assessee and therefore there arises no question of addition of Rs.8,55,895/ made on account of Presumptive Income of 8% on total deposits in bank accounts as the assessee has fully disclosed his Income in the Income Tax Return filed by the assessee. Therefore, you are requested to kindly delete the addition made by Ld. Assessing Officer of Rs.8,55,895/- made on account of Presumptive Income of 8% on total deposits in bank accounts and provide due relief to the assessee.’’ 2.3 On the other hand, the ld. DR supported the order of the ld CIT(A) and submitted that the various notices were issued by the ld. CIT(A) as mentioned in 8 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER his order and the assessee had not filed the written submission which is clear disregard of the notices issued by the ld. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that as per information available with the Department, the assessee had deposited cash of Rs.13,70,300/- in his saving bank account maintained with State Bank of India, Diggi Bazar Branch, Ajmer and also deposited cash of Rs.s34,60,000/- in his HDFC saving bank account. It is noticed by the AO that the assessee has also dealt in commodity exchange during the year under consideration and it is mandatory required from the assessee to file his return of income under the provision of Section 139(1) but the assessee had not filed the return of income. A formal letter was issued by the Department to the assessee on 08-01-2019 for making compliance on 16-01-2019. Thereafter, a notice u/s 148 of the Act was issued to the assessee on 25-03-2019 and duly served upon him through speed post. In response thereto, the assessee filed return of income on 26- 04-2019 declaring taxable income of Rs.1,95,180/-. From the records, it is noticed that the details of income declared by the assessee in his return of income is as under:- 9 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER Particulars Amount Income from commodities derivates business 1,11,111 Income from salary 84,000 Income from saving bank interest 67 Total income 1,95,180 It is noted from the records that the assessee had turnover of Rs.44,91,404/- from business commodity as the sum of positive and negative differences between the sales value and purchase value which is as follows: Particulars Amount Positive difference 23,01,257 Negative difference 21,90,147 Total turnover 4,91,404 The summary of total deposits of Rs.1,08,93,793/- in all bank accounts of the assessee are as under:- Particulars Amount of deposits (in Rs. T/f from India Nivesh Commodities Pvt Ltd. 53,33,942 Cash deposit 39,43,500 SB interest 1,900 ATM withdrawals Reversal 20,000 Other clearing Receipts (non cash) 15,94,451 Total 1,08,93,793 Further, it is noted that the AO added an amount of Rs.8,55,895/- to the total income of the assessee @ 8% of Rs.1,06,98,682/- whose calculation is as under:- 10 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER Particulars Amount of deposits (in Rs. Total of credit entries 1,08,93,793 Less: Income declared in ITR – Salary Income (84,000) Business Income (1,11,111) Total 1,06,98,682/- Thus being aggrieved by the order of the AO, the assessee preferred an appeal before the ld CIT(A) who dismissed the appeal of the assessee in limine for non- prosecution. During the course of hearing, the main thrust made by the ld. AR of the assessee was that the ld.CIT(A) should have decided the appeal of the assessee on merit instead of non-prosecution of appeal by the assessee. From the entire conspectus of the case and the submissions made above, the Bench is of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee and the matter is restored to the file of the ld. CIT(A) to decide it afresh by providing one more opportunity of hearing. The ld. AR of the assessee is also directed to produce all the relevant records before the ld. CIT(A) to resolve the issue in question and the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 11 ITA NO. 342/JPR/2025 SHRI VINOD KUMAR DHANJA VS ITO, WARD 2(1), AJMER 2.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law. 3.0 In the result, the appeal of the assesee is allowed for statistical purposes as indicated hereinabove. Order pronounced in the open court on 06/05/2025. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 06 /05/2025 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1vihykFkhZ@The Appellant- Shri Vinod Kumar Dhanja, Ajmer. 2izR;FkhZ@ The Respondent- ITO, Ward-2(1), Ajmer. 3vk;dj vk;qDr@ CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 5. xkMZ QkbZy@ Guard File { ITA No. 342/JPR/2025} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar "