Case Law Details
ITO Vs Sh. Subash Chander (ITAT Amritsar)
It is prayed that all the assessment years need to be considered cumulatively by lower authorities taking into account not only the evidence already on record but also by allowing assessee to provide further evidence in support of his submissions because the entire proceedings have been carried out by officers located at more than 500 kms away from the workplace of the assessee. Had some local officer at New Delhi had carried out assessment, independent preliminary investigation could have easily revealed the truth of business of dealings in vehicles by the assessee carried out by him for decades together.
It is therefore pleaded that assessee be granted appropriate opportunity to explain his case. The officers at 500 kms away from the work place are not being able to justify the onerous duty cast upon them under law. It is therefore requested that conclusions, if any may be reached only after verification of circumstantial evidence.
In the same issue the revenue authorities has took a different view for assessment year 2009-10, 2010-11 and 2011-12. It is fact that there is a reasonable cause that assessee was unable to submit the documents before the assessing authority during assessment proceedings. The ld. CIT(A) had not considered the material of the cases and on the same issue have a different factual view by the revenue authorities. In the other issue also the ld. CIT(A) had not adjudicated in the order of the assessee. After a thoughtful consideration we set aside all the matters before the ld. CIT(A) for further adjudication and considering the assessee’s submission. Needless to say, that the ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted by the ld. CIT(A)and adjudicated by the ld. CIT(A) on merits in accordance with law. We order accordingly.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeals are filed against the order of the ld. Commissioner of Income Tax(Appeals)-2, Amritsar, [in brevity the CIT(A)],the order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2009-10 to 2012-13.The impugned orders were emanated from the order of the ld. Income Tax Officer,Ward 6(3), Pathankot(in brevity the AO) order passed u/s 147/144of the Act, all the orders are passed dated27.03.2015. The assessee filed cross objection for the assessment year 2010-11 which is in delay of 670 days. The assessee filed an affidavit for condonation of delay. The assessee was ill health and not received the memo of appeal of the Department. After receiving the same the Cross objection was filed before the Bench. The assessee prayed for condonation of delay of 670 days. After a detailed discussion, with the consent of the ld. Sr. DR, the delay was condoned. In factual back drop the three appeals are in the same issue and Cross objection was filed by the assessee against the ITA No.313/Asr/2017 for A.Y. 2009-10. At the outset, considering the common factual position of all the cases, here the ITA 313/Asr/2017 and C.O. 03/Asr/2019 for A.Y. 2009-10 are taken as the lead cases. The assessee has filed the revised ground which is reproduced as below:
“1. The Ld CIT A has erred by not quashing the assessment inspite the fact that assessment has been framed without issuing notice u/s 143(2) against the return filed on 26-03-2015 declaring total income of Rs. 142700/- on account of business income.
2. That Learned CIT A has erred by not holding that the reopening u/s 148 is bad in law inspite the fact that reopening on the basis of inadequate satisfaction mentioning only “Yes” by the sanctioning authority in approval dated 7-3-14.
3. That Learned CIT A has erred by not holding that the reopening u/s 148 is bad in law inspite the fact that no reason to Deb that income has escaped assessment has been substantiated by issuing letter u/s 133(6) with the approval of commissioner and reopening merely on the basis of AIR information.
4. That Learned CIT A has erred by not holding that the reopening u/s 148 is bad in law inspite the fact that sanction sought for from Addl CIT has been granted by Commissioner OSD.
5. The Ld CIT A has erred by not quashing the assessment in entirety wrongly framed u/s 69 and treating the regular deposits and withdrawals which are from regular business transactions in sale purchase of vehicles as unexplained investment.
6. The assessee craves leave to and permission of Hon’bie Bench of ITAT to add to or alter any of the grounds of memorandum of objections any time up to final decision of the appeal.
7. The assessee craves leave and sanction of Hon’ble Bench of ITAT to file additional evidence, if so required for proper prosecution of the case, based on facts and circumstances, which has not been or could not be adduced before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited or Its ne-was not appreciated.”
2. ITA No. 313/Asr/2017 the revenue has filed the grounds which are reproduced as below:
“In the case of Sh. Subhash Chander Saggi, S/o. Nand Kishore Saggi, Third Floor Lajpat Nagar-2, New Delhi for the Assessment Year 2009-10 against order u/s. 250(6) dated 28.03.2017 of the CIT(A)-II, Amritsar in appeal no. 115/2015-16-reg
1) Whether the Ld. Commissioner of Income Tax(Appeal)- II, Amritsar was right while allowing the relief to the Assessee of Rs.1,58,12,303/-Which is un-explained cash deposits by applying principal of peak credits.
2) That the appellant craves leave to add or amend the grounds of appeal.”
3. Tersely, we advert the fact of the case for A.Y. 2009-10 to 2011-12.The assessment was completed u/s 144/147. The addition was made on basis of the deposit of cash in bank account of the assessee. The assessee filed an appeal before the ld. CIT(A) by challenging the order of the ld. AO. The ld. CIT(A) for A.Y. 2009-10 had considered the assessee’s submission and allowed the peak credit related to deposit of cash in the bank account. Against the order of the ld. CIT(A) for A.Y. 2009-10 the revenue filed an appeal before the Bench. The assessee filed a cross objection against the revenue’s appeal. For A.Ys. 2011-12 and 2012-13 the ld. CIT (A) partly upheld the order of the ld. AO and for that assessment year the appellant challenged the order of the appellate authority before us.
4. In the appeal proceedings, the ld. Counsel had filed a written submission which is kept in the record. The ld. Counsel vehemently argued and mentioned that the assessee is 76 years of age and had shifted from ancestral house at Pathankot to New Delhi in the year 1980. The assessee started the business as dealer in used vehicles at Sarojini Market, New Delhi. Ever since neither he had run the business at Pathankot nor the place of residence at Pathankot. The bank account statements relevant to the case also bear the address at Lajpat Nagar, New Delhi. The cases for multiple assessment years were reopened. The assessee requested the assessing officer Pathankot to shift his cases to Delhi because it was extremely difficult for him to every time come to Pathankot for attending assessment proceedings but cases were not transferred. The entire amount deposited in the bank accounts was treated as income of the assessee.
Before the ld. CIT A the assessee couldn’t seek any professional help because of distance factor and the cases were decided again without verifying the veracity of facts.Statement on Oath was recorded for AY 2007-08 to AY 2012-13 by the ld. CIT(A) . In the statement deposed before the ld. CIT(A), the assessee also submitted that he earned only commissions income from dealings in cars. The assessee also furnished letters from various car dealers who stated that the assessee was dealing in cars. For all the impugned assessment years underconsideration the CIT(A) had same set of facts before him. And this fact has not been controverted in either of orders.
In the ld. CIT(A)’s order for AY 2009-10, it was observed at Page 7 of the order that “Considering the nature of bank transactions of the assessee in AXIS Bank Ltd and ICICI bank Ltd showing deposits of cash/DD/bank Trnsfer and payments through demand drafts and cash withdrawals throughout the year on a regular basis shows that assessee was doing some business and cash/DD/Bank Transfers entries in the deposits in the bank accounts was his sale proceeds and not the money belonging to some other parties. The payments made were his purchases and expenses. Accordingly the principal of peak credit in the bank account held by the assessee in the year under consideration is applied for determining the undisclosed income of the assessee hereunder.”
The above order was passed in the year 2017. The department filed appeal against the order of the ld. CIT(A) while assessee filed Cross objections on various grounds. Assessment Year 2011-12 & 2012-13 passed on 27-08-2020
The order passed for AY 2008-09, 2009-10 and 2010-11 in the year 2017 were not considered in CIT(A) orders for AY 2011-12 and AY 2012-13
In CIT(A)’s order at Page 4, it is observed that:
“Upon a close examination of the pattern of cash deposits, it is seen that on several days during the year cash was deposited and on the same day a pay order was issued for the same amount / for an amount which was less by Rs 500 to Rs 1000/-.
Hence circumstantial evidence also supported the statement given by the assessee that he is earning paltry commission from Rs. 500 to Rs. 1000. While the statement of assessee was recorded in 2017, CIT A’s observations on independent examination of evidence were framed in 2020. CIT A also refuted the charge of AO that no ITR was filed. However CITA sustained the whole addition made by the AO”.
4.1. The ld. Counsel further submitted that hence orders passed by the ld.CIT(A) for AY 2011-12 and AY 2012-13 are passed without considering the orders passed for AY 2008-09, 2009-10 and 2010-11.
It is therefore prayed that all the assessment years need to be considered cumulatively by lower authorities taking into account not only the evidence already on record but also by allowing assessee to provide further evidence in support of his submissions because the entire proceedings have been carried out by officers located at more than 500 kms away from the workplace of the assessee. Had some local officer at New Delhi had carried out assessment, independent preliminary investigation could have easily revealed the truth of business of dealings in vehicles by the assessee carried out by him for decades together.
It is therefore pleaded that assessee be granted appropriate opportunity to explain his case. The officers at 500 kms away from the work place are not being able to justify the onerous duty cast upon them under law. It is therefore requested that conclusions, if any may be reached only after verification of circumstantial evidence.
5. The ld. Sr. DR relied on the order of the revenue authorities and not able to submit any different fact against the submission of the assessee.
6. We heard the rival submission and considered the documents available in the record. In the same issue the revenue authorities has took a different view for assessment year 2009-10, 2010-11 and 2011-12. It is fact that there is a reasonable cause that assessee was unable to submit the documents before the assessing authority during assessment proceedings. The ld. CIT(A) had not considered the material of the cases and on the same issue have a different factual view by the revenue authorities. In the other issue also the ld. CIT(A) had not adjudicated in the order of the assessee. After a thoughtful consideration we set aside all the matters before the ld. CIT(A) for further adjudication and considering the assessee’s submission. Needless to say, that the ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted by the ld. CIT(A)and adjudicated by the ld. CIT(A) on merits in accordance with law. We order accordingly.
7. In the result, the appeal bearing ITA No.313/Asr/2017 is allowed for statistical purposes. Also, Cross objection alongwith two other appeals are also allowed for statistical purposes.
Order pronounced in the open court on 11.11.2022
