Sandeep Vimalchand Gadiya Vs ITO (ITAT Bangalore)
Non-Compliance Cured with Cost: ₹25,000 Cost Imposed as ITAT Revives Reassessment on Cash Deposits
One More Chance, but at a Price – Email Missed, Justice Remains: Bangalore ITAT Orders De-Novo Assessment
Bangalore ITAT “B” Bench, in Sandeep Vimalchand Gadiya Vs ITO (ITA No. 2404/Bang/2024, AY 2012-13; order dated 31.01.2025), set aside the reassessment order passed u/s 147 r.w.s. 144 & restored the matter to the file of AO for de-novo adjudication, subject to payment of cost of ₹25,000.
Reassessment was initiated on account of substantial cash deposits in Assessee’s bank account during FY 2011-12. Due to alleged non-compliance, AO treated the entire cash deposits as unexplained u/s 69A & also assessed Form 26AS receipts of ₹5.52 lakh as business income, holding that Assessee had not filed return of income. CIT(A) dismissed the appeal ex-parte for want of submissions, despite having condoned delay.
Before Tribunal, Assessee explained that he was proprietor of Kavita Agency, engaged in handloom sarees business, with sales predominantly in cash, duly reported to the Commercial Tax Department through VAT-100 monthly returns, & also contended that statutory notices sent to earlier email ID were never noticed. A new email ID was furnished with an undertaking of full compliance.
Considering the interest of justice, Tribunal held that Assessee deserves one final opportunity, but observed that repeated non-compliance cannot go unchecked. Accordingly, the matter was remanded to AO with direction to issue notices on the new email ID, grant reasonable opportunity & pass a speaking order after verification of evidence, subject to Assessee paying ₹25,000 as cost under the prescribed challan head. Appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal filed by the assessee against the Order passed by the National Faceless Appeal Centre (NFAC), vide DIN and Order No.ITBA/APL/S/250/2024-25/1070643328(1) dated 26.11.2024, on the following grounds of appeal:
1. The order of assessment passed by the learned assessing officer and CIT(A)’s order in so far as it is against the Appellant, is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant’s case.
2. The appellant denies himself liable to be taxed on a total income of Rs.1,37,99,900/- as assessed by the learned assessing officer as against the return income of Rs.2,80,590/- under the facts and circumstances of the case of the appellant.
3. The Assessing Officer and Id CIT(A) were failed to consider that the initiation of proceeding u/s.147 is bad and untenable under the eye of law in so far as non production of reasons recorded for reopening of assessment under the facts and circumstances of the case.
4. The Assessing Officer failed to consider that the reasons recorded for re-opening of assessment is not a reasons to believe but it is a non application of judicious mind by assessing officer, which is not permissible under the eye of law. Therefore, the order of re-assessment is bad in law under the facts and circumstances of the case
5. It is submitted that cash deposit of Rs.1,32,47,900/- is cash received on sale of hand loom sarees. The sales is declared to the Commercial Tax Department by virtue of monthly return-VAT 100 under the facts and circumstances of the case.
6. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.
7. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed and appropriate relief may be granted in the interest of justice and equity.
2. Briefly stated, the facts of the case are that, as per the information received there was substantial cash deposit in the Financial Year 2011-12 in the assessee’s bank account and it was also found that the assessee has not filed return of income. Accordingly, notice under section 148 of the Act, dated 28.03.2019, was issued and served to the assessee and thereafter several opportunities were granted to the assessee and other statutory notices were also issued to the assessee but there was no compliance from the assessee side. Accordingly, the AO made addition to the entire cash deposits under section 69A of the Act for want of explanation and further the AO noted in Form 26AS under the TAN BLRRO5871 F, there is a payment of Rs.5,52,000/- and TDS is deducted under section 194C of the Act of Rs.5,520/- and assessee has not filed return of income. Therefore, the entire receipt shown in Form 26AS was treated as profit under the head “Profit and Gains of Business or Profession”. Accordingly, the assessment was completed on 26.11.2024. Assessee filed appeal before the CIT(A) on 04.02.2020 with a delay. However, the learned CIT(A) has condoned the delay and granted various opportunities to the assessee which is clear from para 4.1 of the CIT(A)’s Order in spite of the assessee did not comply the notices, therefore, he dismissed the appeal of the assessee without going into merits of the case for want of submission from assessee’s side.
