Case Law Details
Rohit Yadav Vs ACIT (ITAT Jodhpur)
Introduction: This article discusses the case of Rohit Yadav versus the Assistant Commissioner of Income Tax (ACIT) as heard by the Income Tax Appellate Tribunal (ITAT) in Jodhpur. The appeal was filed against the order under section 250 of the Income Tax Act, 1961, passed by the Commissioner of Income Tax (Appeals)[National Faceless Appeal Centre (NFAC)], Delhi, dated March 21, 2023, for the Assessment Year 2009-10. The case involves issues related to additional evidence, non-compliance, and unexplained cash deposits.
Grounds of Appeal: The appellant raised several grounds of appeal, challenging the legality of the order. Some key grounds include:
- The assertion that the AO’s and NFAC’s order was illegal and against the law.
- Failure of the department to cross-examine the deponent of the affidavit submitted by the assessee.
- Contempt of court for ignoring judgments of the Supreme Court and High Court.
- Non-acceptance of fresh evidence submitted before the Commissioner of Income Tax Appeals under Rule 46A of the Income Tax Rules.
- Allegations of illegal actions under sections 147/148 of the Income Tax Act.
- Claiming that the assessee was prevented from filing the income tax return due to reasonable cause.
- Contesting the high-pitched assessment without obtaining approval from higher authorities.
- Disputing the addition made by the AO and NFAC as excessive and high.
- Arguing that the charging of interest is illegal.
- Alleging that the Commissioner of Income Tax failed to consider the assessee’s reply, making the order illegal.
Brief Facts of the Case: The case revolves around the assessee’s cash deposits during the financial year 2008-09 in a savings bank account. The AO initiated proceedings under section 147 of the Income Tax Act after the assessee failed to respond to notices. The AO made an addition of Rs. 16,90,518 as unexplained money under section 69A. The appellant appealed to the Commissioner of Income Tax (Appeals)[NFAC], who upheld the addition.
Appeal to ITAT: The appellant approached the ITAT, challenging the Commissioner’s order. The appellant’s representative argued that the Commissioner failed to discuss additional evidence and the remand report. It was pointed out that the Commissioner had forwarded the additional evidence to ACIT, Sriganganagar, but failed to consider it in the final order.
ITAT’s Findings and Analysis: The ITAT acknowledged that the Commissioner failed to discuss the additional evidence and remand report. It attributed this oversight to the transition to the Faceless Appeal Scheme. The ITAT set aside the Commissioner’s order and directed denovo-adjudication.
Conclusion: The ITAT’s decision to send the case back for denovo-adjudication highlights the importance of considering additional evidence and remand reports in the appeal process. The article emphasizes the procedural lapses in the original order and the need for a fair and comprehensive examination of all relevant documents and reports. The ITAT’s decision ensures that the appellant has a fair opportunity to present their case, aligning with principles of justice and due process in tax adjudication.
FULL TEXT OF THE ORDER OF ITAT JODHPUR
This is an appeal filed by the assessee against the order under section 250 of the Income Tax Act, 1961 passed by ld.Commissioner of Income Tax(Appeals)[NFAC], Delhi on 21.03.2023 for A.Y.2009-10, emanating from assessment order under section 144 of the Act dated 04.03.20 15.
2. The Grounds of appeal raised by the assessee are as under :
“1. That the Order passed by the A.O as well as sustained by the National Faceless Appeal Centre (NFAC), Delhi illegal and against the law.
2. That the assessee submitted the affidavit and the department fails to cross examine the deponent therefore the entire order is liable for quash in view of judgment of Hon’ble Supreme Court delivered in case of Mehta Parikh & Co.
3. That ignoring the judgment of Supreme Court and High court is falling within contempt of court, may kindly be referred for contempt.
4. That the Commissioner of Income Tax Appeals should have accepted the fresh evidence submitted before him under rule 46A of the I. T. Rules.
5. That the action taken by the Assessing Authority as well as sustained by the National Faceless Appeal Centre (NFAC),Delhi under section 147/148 of the Income Tax Act, is illegal and against the law.
6. That the assessee was prevented reasonable cause from furnishing the Income Tax return, therefore the exparte assessment is illegal and against the law.
7. That the assessment completed u/s 144 of the Income Tax Act as well as sustained by the National Faceless Appeal Centre (NFAC),Delhi is illegal and against the law because the assessee was prevented by reasonable cause.
8. That the addition of Rs. 16,90,518 made by the A. O. as well as sustained by the National Faceless Appeal Centre (NFAC),Delhi is illegal and against the law because the entire amount deposited by the assessee and / consider by the A. O. is fully explained.
9. That before passing the order u/s 144 of the Income Tax Act specific notice showing his intention should have issued but the O. fails to do so as such the entire addition made is illegal and against the law.
10. That the assessment is high pitch assessment and the A.O. fails to obtain approval by the higher authority as evident from order, therefore the assessment competed is illegal, against the law judicial decorum and discipline.
11. Without prejudice the addition made by the A.O. is excessive and high.
12. That the charging of interest is illegal and against the law.
13. That the Commissioner of Income Tax falls to consider the reply submitted by the assessee as such the order is illegal and against the law. The assessee is also entitle for cost for unnecessary harassment by ignoring the reply available on portal itself.”
Brief facts of the case :
3. As per the assessment order, the Assessing Officer(AO) received information that assessee had deposited cash during the F.Y.2008-09 in savings bank account maintained with M.G.B.Gramin Bank, Khayaliwala Branch. The AO asked the assessee to explain the same vide letter dated 30.01.2013 issued under section 133(6) of the Act. However, assessee failed to file any reply. The AO after recording reasons, initiated proceedings under section 147 of the Act. The AO issued noticed under section 148 on 12.06.2013, which was duly served on assessee on 17.06.2013. The AO has discussed the addition of Rs.16,90,000/- + Rs.518 = Rs.16,90,518/- in paragraph 3 and 4 of the Assessment Order. The said paragraphs are reproduced as under :
“3. Accordingly, vide notice U/s 148 of this office, dated 12.06.2013, the assessee was requested to file his return of income for AY: 2009-1 0, but till date, no return of income was filed. Again a notice U/s 142(1) dated 19.07.2013 was issued fixing the case for 30.07.2013 but no compliance was made. Then a request letter was issued on 23.04.2014 mentioning that in case of non compliance, the matter will be decided as exparte. In compliance the assessee requested some time vide letter dated 30.05.2014, but till date, the assessee has not filed income tax return for the A. Y.2009-10.
Thereafter, vide letter No.325 dated 02.07.2014, the assessee informed that in the case of non filing of return the case will be disposed off as ex parte. A final opportunity was also given vide this office letter dated 15.07.2014 to file her reply on 08.08.2014. Therefore, it is clear that from the very beginning the assessee is showing non compliance with the letters and notices issued of this office from time to time. On 11.02.2015 a show cause notice was issued for 19.02.2015 stating that in case of continuous non compliance I will have no option but to pass an exparte assessment at bank deposits amounting to Rs.16,90,000/- + 518/- interest income3 but even then neither the assessee nor any A/R of the assessee attended the proceedings.
4. Considering the above fact as WELL as repeated non compliance, it is apparent, that the assessee has nothing to say in this matter and she is completely non co-operative. In view of these facts an amount of Rs.16,90,000/- + 5187- interest is treated as unexplained money u/s 69A of the Income-tax Act, 1961. Penalty proceedings u/s 271 (l) (b) for non compliance with the statutory notices are also being initiated.”
4. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A), Bikaner on 06.04.2015, as seen from the copy of the Form No.35 filed by the assessee. The ld.CIT(A)[NFAC] upheld the addition vide order dated 21.03.2023 passed under section 250 of the Income Tax Act. The relevant paragraphs 8, 9, 10 & 11 are reproduced here as under:
“8. I have carefully considered the facts of the case and found that there is no need to interfere the addition made by AO u/s 144 of the IT Act, total amounting to Rs. 16,90,000/- + 518/- interest. During the assessment proceedings the appellant has provided ample opportunity for confirmations and substantiate the identity, creditworthiness and the genuineness of the transaction. However, in spite of extending sufficient opportunities the appellant was failed the furnished any shred of details/evidences to substantiate the claims made by it in the return of income. Hence the objection raised by the appellant is fully devoid of merits of assessment order so the addition made by AO is sustained and ground raised by the appellant is hereby dismissed.
The AO has made addition an amount of Rs. 16,90,000/- + 518/- interest on cash deposit in his bank accounts, since the appellant has not produced, documentary evidence in support of his claim.
Vide notice U/s 148 of this office, dated 12.06.2013, the assessee was requested to file his return of income for AY: 2009-1 0, but no compliance was made. Then a request letter was issued on 23.04.2014 mentioning that in case of non compliance, the matter will be decided as exparte. In compliance the assessee requested some time vide letter dated 30.05.2014, but till date, the assessee has not filed income tax return for the A. Y. 2009- ID. Thereafter, vide letter No. 325 dated 02.07.2014, the assessee informed that in the case of non filing of return the case will be disposed off as ex parte. A final opportunity was also given vide this office letter dated 15.07.2014 to file her reply on 08.08.2014. Therefore, it is clear that from the very beginning the assessee is showing non compliance with the letters and notices issued of this office from time to time. On 11.02.2015 a show cause notice was issued for 19.02.2015 stating that in case of continuous non compliance I will have no option but to pass an exparte assessment at bank deposits amounting to Rs. 16,90,000/- + 518/- interest income but even then neither the assessee nor any A/R of the assessee attended the proceedings.
Not only has adequate opportunity been given but also show cause notice was given to the appellant assessee which he did not responds.
9. Considering the entirety of facts, circumstances and material on record and looking into preponderance of probabilities here the appellant has miserably failed to substantiate its claim of having either received the amount of the said transaction as unexplained money and has also not even been able to establish that he could himself accumulate such huge amount from the sources disclosed, therefore, the AO is fully justified in making/confirming the disallowance in the amount of Rs. 16,90,000/- + 518/- interest, found as unexplained money of the appellant. In this condition the addition made by AO factually and legally correct is upheld and the plea of the appellant on this issue is dismissed being devoid of any
10. Therefore, considering the above factual and legal position, the appeal filed by the appellant is liable to be dismissed as it can be naturally inferred that the appellant has nothing to say
11. Thus, the above facts and circumstances of appellant case the additions made resulting in completion of assessment at a total amount of Rs. 16,90,518/- (amount of Rs. 16,90,000/- + 518/- interest) for the A. Y 2009-1 0 is hereby confirmed and ground raised by appellant is dismissed.”
5. Aggrieved by the order of the ld.CIT(A), assessee filed appeal before this Tribunal.
Submission of ld.AR :
6. The ld.Authorised Representative(ld.AR) of the assessee filed a paper book. The ld.AR submitted that assessee had filed letter on 22.04.2019 before the ld.CIT(A), Bikaner requesting the ld.CIT(A) to admit additional evidence under rule 46A of Income Tax Rules. The said letter is on page no.4 of the paper book. Assessee also filed along with the said letter additional The ld.AR submitted that nowhere in the order, ld.CIT(A) has discussed about the additional evidence. The ld.AR submitted that the ld.CIT(A), Bikaner had forwarded the additional evidence to ACIT, Circle Sriganganagar for remand report as per procedure laid down in Rule 46A of Income Tax Rule. The ld.AR submitted that copy of the letter written by AO to assessee on 31.03.2019 with reference to remand report for A.Y. 2009-10 is on page no.29 of the paper book. Assessee’s submission with reference to remand report is on page no.30 to 36 of the paper book.
6.1 The ld.AR pleaded that there are factual mistakes in the ld.CIT(A)’s order. Ld.AR made vehement submission on other grounds.
6.2 The ld.AR submitted written letter stating that assessee will not like to press the Legal Ground i.e. Ground No.5 raised by the assessee in this appeal.
Submission of ld.DR :
7. The ld.Departmentla Representative of the Revenue relied on the order of the AO and ld.CIT(A).
Findings and Analysis :
8. We have heard both the parties and studied the records. We will first take up the Ground No.4 of the assessee.
Ground No.4 :
“4. That the Commissioner of Income Tax Appeals should have accepted the fresh evidence submitted before him under rule 46A of the I. T. Rules.”
9. On perusal of the paper book filed by the assessee, it is observed that assessee had requested the ld.CIT(A), Bikaner on 22.04.2019 to admit additional evidence. Assessee had also submitted additional evidence in the form of Affidavit and other documents. The ld.DR has not rebutted this fact that assessee had filed request for admission of additional evidence along with copies of additional evidence. However, on perusal of the ld.CIT(A)’s order, it is observed that nowhere the ld.CIT(A) [NFAC] has discussed about the documents filed as additional evidence. As per the letter dated 31.03.2019 of the ACIT, Sriganganagar written to assessee which is at page no.29 of the paper book filed by assessee, one can infer that the ld.CIT(A), Bikaner had forwarded the additional evidence to ACIT, Sriganganagar. The ACIT had also carried out investigation with reference to the additional evidence filed by assessee. Once, the ld.CIT(A), Bikaner had forwarded copies of additional evidence to the ACIT – Sriganganagar, it means, that ld.CIT(A) has admitted the additional evidence. Once ld.CIT(A) admits the additional evidence, he is duty bound to discuss the additional evidence, remand report in the order under section 250 of the Act. However, in this case, it seems that the case was transferred from ld.CIT(A), Bikaner to ld.CIT(A)[NFAC]. Since for the first time CBDT had introduced the Faceless Appeal Scheme for adjudication by ld.CIT(A), it is possible that in the transition, the ld.CIT(A)[NFAC] had not received copies of the additional evidence filed by assessee. As a result, ld.CIT(A)[NFAC] failed to discuss the additional evidence and remand report. In these facts and circumstances of the case, as the Faceless Appeal was a new concept to ld.CIT(A) as well as Assessee, the error which has crept is a possible human error. In these facts and circumstances of the case, we deem it appropriate to set-aside the order of ld.CIT(A)[NFAC] to ld.CIT(A) for denovo adjudication. The ld.CIT(A) shall consider the additional evidence filed by the assessee, consider remand report. The ld.CIT(A) shall also provide opportunity to the assessee. Assessee shall also be at liberty to file necessary documents before the ld.CIT(A). Accordingly, the Ground No.4 is allowed for statistical purpose.
10. Since we have set aside the order of the Ld.CIT(A) for denovo-adjudication, all other grounds become academic in nature. Hence, all other grounds except ground number 5 are dismissed. Ground Number 5 is dismissed as the Ld.AR submitted that Assessee does not wish to press the said ground. Accordingly, the ground number 5 is Dismissed as not pressed.
11. In the result the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 10th November, 2023.
