Sanjay Chandrakant Gaonkar Vs ITO (ITAT Mumbai)
ITAT held that in view of non-cooperation on the part of the assessee before lower authorities for verification of it’s own documents/ claims cost of Rs. 20,000 imposed on the assessee to be deposited into Prime Minister Relief Fund.
Facts- The assessee is an individual and employee of the Reserve Bank of India (RBI) and also claimed as partner in firm M/s Shree Swami Samarth Hotel. In the case of assessee, AO observed cash deposits in bank accounts maintained with Apna Sahakari Bank and Canara Banak. However, due to failure on the part of assessee in explaining the source of same, the Assessing Officer treated the said cash deposits as unexplained credit/investment of Rs. 59,46,260/-. The Assessing Officer also made disallowance of expenses claimed against remuneration of Rs. 2,27,231/and addition for unexplained credit of Rs. 35,52,805/-.
The matter was remanded by CIT(A), however, in view of no compliance part of the assessee, CIT(A) upheld the above addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that it is evident the assessee has not cooperated before the lower authorities for verification of the it’s own documents and claims. Before us the Ld. Counsel of the assessee requested for restoring the matter back to the file of the Ld. CIT(A). In the interest of the substantial justice, we feel it appropriate to restore the issue back to the Ld. CIT(A), however looking to the non compliant conduct of the assessee and total disregard of the proceedings before the Ld. CIT(A), impose cost of Rs. 20,000/-. The assessee is directed to deposit the same into Prime Minister Relief Fund within seven days of receipt of this order. The grounds raised by the assessee are accordingly allowed for statistical purpose. The Ld. CIT(A) is directed to ensure payment of the cost by the assessee before the commencing the appellate proceedings.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against the order dated 09.06.2017 passed by the Ld. Commissioner of Income-tax (Appeals) – 46, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2011-12, raising grounds as reproduced below:
1) The learned Commissioner of Income Tax (Appeals) has erred in passing the order without providing reasonable opportunity of being heard.
2) The learned CIT (Appeals) has erred in confirming the addition of Rs. 59,46,260/- on account of alleged unexplained investments as per para 4 of the impugned order. The reasons assigned by him for doing the same are wrong and insufficient. Provisions of the act ought to have been properly construed before doing the same.
3) The learned CIT (Appeals) has erred in confirming the disallowance of Rs. 1,71,478/- a sum of on account of alleged unexplained expenditure as per para 5 of the impugned order. The reasons assigned by him for doing the same are wrong and insufficient. Provisions of the act ought to have been properly construed before doing the same.
4) The learned CIT (Appeals) has erred in confirming an addition of Rs 35,52,805/ on the account of alleged unexplained cash credit by invoking provisions of section 68 of the Income Tax Act, 1961 as per para 6 of the impugned order. The reasons assigned by him for doing the same are wrong and insufficient. Provisions of the act ought to have been properly construed before doing the same.
5) The learned CIT (Appeals) has erred in continuing disallowance of Rs. 2,27,231/- claimed as deduction against the remuneration as per para 7 of the impugned order. Reasons assigned by him for doing the same are wrong and insufficient Provisions of the Act ought to have been properly construed before levying the same.
6) Appellant leaves to add/modify/delete/alter any/all grounds of Appeal.
2. Briefly stated facts of the case are that the assessee filed its return of income for year under consideration on 17.11.2011 declaring total of Rs. 2,24,680/-, The return of income filed by the assessee was selected for scrutiny and notice u/s 143(2) of Income Tax Act, 1961 (in short ‘the Act’) was issued to the assessee, which partly complied. The assessee is an individual and employee of the Reserve Bank of India (RBI) and also claimed as partner in firm M/s Shree Swami Samarth Hotel. In the case of assessee, the Assessing officer observed cash deposits in bank accounts maintained with Apna Sahakari Bank and Canara Banak. However, due to failure on the part of assessee in explaining the source of same, the Assessing Officer treated the said cash deposits as unexplained credit/investment of Rs. 59,46,260/-. The Assessing Officer also made disallowance of unexplained expenditure of Rs. 1,71,478/-; disallowance of expenses claimed against remuneration of Rs. 2,27,231/and addition for unexplained credit of Rs. 35,52,805/-. In this manner, the assessment was completed u/s 143(3) of the Act on 28.03.2014 determining the total income at Rs. 1,01,22,450/-Before the Ld. CIT(A), the assessee filed appeal by the delay of 205 days. The Ld. CIT(A) condoned the delay of filing the appeal and issues various notices to the assessee for filling submission however, despite issuing many notices, no compliance was made on the part of the assessee till 28.02.2017. Thereafter, also assessee filed part document and matter was sent to the assessing officer calling for remand report. However, assessee did not appear before the Ld. Assessing Officer during remand proceeding for verification of document filed by the assessee. In view of the no compliance part of the assessee, the Ld. CIT(A) passed the order of the basis of documents available and upheld the addition made by the Assessing officer except samll relief in respect of addition for unexplained expenditure of Rs. 1,71,478/- in the impugned order dated 09.06.2017. Aggrieved with the finding of the Ld. CIT(A), the assessee in appeal before the Tribunal, which has been filed with delay of more than 1700 days.
3. Before us the Ld. Counsel of the assessee referred to the affidavit of the assessee, wherein he has submitted that though the impugned order of the Ld. CIT(A) was issued on 09.06.2017. However, due to nonpayment of fee of the consultant, he did not cooperate and password of the assessee’s account on the Income Tax website was also not provided to the assessee. Thereafter Covid restrictions also delayed in the filling in appeal, which has been ultimately filed on 23.02.2022. In view of the facts submitted by way of affidavit, we find that assessee was prevented in filling the appeal within limitation period due to sufficient cause and therefore in the interest of substantial justice, we feel it appropriate to condone the delay and admit the appeal. Accordingly the appeal is admitted for adjudication.
4. We find that Ld.CIT(A) has passed the order without taking into consideration submission of the assessee. The Ld. CIT(A) has mentioned the details of the notices issued and non compliance part of the assessee in para 5.1 of the impugned order. For ready reference same is reproduced as under:-
5.1 Before I proceed on merits, it is important to bring on record the various opportunities given during the course of appeal proceedings to the assessee to furnish details in support of claim for the grounds raised. The various notices and their compliance are as follows:
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