Case Law Details
Roop Narayan Pandey Vs ITO (ITAT Allahabad)
ITAT Allahabad held that facts brought to the notice of this Tribunal are relevant and very crucial for deciding the issue under consideration. Since, the facts were not produced before earlier authorities, impugned order is recalled.
Facts-
The assessee is seeking recalling of order of this Tribunal whereby the appeal of the assessee was dismissed in exparte hearing.
The assessee has raised the objection against service of the notice issued u/s. 148 of I.T. Act following the non-response of assessee. AO reopened the assessment based on transactions statement and CIB information regarding the transactions carried out by assessee in ‘Multi Commodity Exchange’ (MCX) as well as cash deposits of Rs.42,29,985/- in the bank accounts of the assessee and estimated the net income at 8%. Later on the CIT (A)restricted it by applying at 1%. Thus assessee filed appeal before the Income Tax Appellate Tribunal.
Conclusion-
Held that the Tribunal has upheld the order of the CIT(A) when there was no explanation regarding the source of the bank account of the assessee. Now, the assessee has referred the FIR filed against the accused persons and thereafter the police has also filed the charge-sheet against one Shri. Surya Prakash Verma under sections 419, 420, 467, 468 and 471 IPC. These facts are in public domain and could not be considered by the Tribunal at the time of passing of the impugned order because the same were not brought to the notice of the Tribunal.
The facts, now brought to the notice of the Tribunal are relevant and very crucial for deciding the issue under consideration. Accordingly, in the facts and circumstances of the case and in the interest of justice, the impugned order dated 15.7.2021 is recalled.
FULL TEXT OF THE ORDER OF ITAT ALLAHABAD
By way of this misc. application, the assessee is seeking recalling of the order of this Tribunal dated 15.07.2021, whereby the appeal of the assessee was dismissed in ex parte hearing. This misc. application was filed by the assessee on 27th May, 2022 and therefore, the question of limitation in filing the misc. application arises.
2. The learned AR has referred to the decision dated 10.1.2022 of Hon’ble Supreme Court in the case of Misc. Application No. 21/2022 and in Misc. Application No. 665/2021 in Suo Moto cognizance for extension of limitation. Accordingly, in view of the judgment of Hon’ble Supreme Court in Suo Moto Writ Petition No. 3/2020 the misc. application filed by the assessee is treated as filed within the limitation.
3. The grievance of the assessee against the impugned order of the Tribunal is in respect of the finding on ground no. 4 to 10 in para 6 and 7 of the impugned order. The assessee has explained the relevant facts which were not considered by the Tribunal while passing the impugned order in para 2 to 4 of the misc. application as under:-
“2. None appeared on behalf of the assessee till the matter was taken up at the end of board. The hearing of the matter has been adjourned from time to time either due to none representation of the assessee or on the request of the assessee. On last seven occasion, the hearing of the case was adjourned due to non availability of the assessee and request of the assessee through application. On the last date of hearing i.e. 5th July 2021, the hearing was again adjourned at the request of the assessee and last opportunity was granted. Despite the last opportunity granted to the assesse neither anybody appeared on behalf of the assessee nor any adjourned application is filed. Accordingly, the appeal was taken up for hearing and adjudication exparte.
3. The assessee has raised the following grounds in this appeal.
“1. BECAUSE proceedings under section 147 have neither validity initiated nor conducted in accordance with the provisions of law and the assessment order dated 16.03.2016 as has been impugned in this appeal, is void ab-initio.
2. BECAUSE otherwise also, the “reasons recorded” in the instant case are not relevant for assumption of jurisdiction for making reassessment under section 147 and very initiation of proceedings under section 147 is illegal.
3. BECAUSE the Assessing Officer did not get jurisdiction to make assessment in pursuance of notice under section 148 said to have been issued on 08.08.2014 as no such notice was served on the appellant, in accordance with the provisions of the law.
4. BECAUSE the appellant belongs to a low class strata with limited means of livelihood and has never deposited such huge amount in the bank account maintained with HDFC Bank for the same to be utilized in trading activity of commodities, so the addition of Rs. 43.87.320/-made in his hand and the liability so created against him is erroneous and Is liable TO be stuck down.
5. BECAUSE the entire transaction in the said bank account, although in the name of the appellant, same belongs to the person upon whom the entire livelihood of the appellant was dependent wholly and solely, the alleged transaction in the HDFC Account No. 09442560000449 cannot be taken as the basis for making an addition of sums aggregating to Rs. 43,87,320/- in the reassessment proceedings under section 147 of the act.
6. BECAUSE in view of the aforesaid ground no. 5 above, the entire withdrawal and deposit in the said bank account should be accessible in the hands of the person upon whom the appellant for his livelihood.
7. BECAUSE for the ground no. 5 & 6 above, the appellant was prevented from appearing and representing the facts of his case before the Assessing Officer, so due alleged non-compliance an exparte order was passed by Assessing Officer and a huge addition of Rs. 43,87,320/-was made in his hand.
8. BECAUSE sum aggregating to Rs. 19,66,687/- forms part of the alleged deposits in bank account, ownership of which itself is in dispute, addition of Rs. 1,57,335/- (8% of 19.66.687) on such deposits is wholly erroneous on facts of the case
9. BECAUSE without prejudice to all the grounds as has been raised above, the Assessing Officer has erred in law and on facts in adopting a pick and choose method for assessing the income of the appellant as against the established law of’ peak credit’ on the basis of telescopic view of the said account.
10. BECAUSE otherwise also the rate of profit determined @ 8% is much too high and excessive and beyond the normal profits in this type of trade.
11. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice. 12. The appellant craves leave to add/ modify/ raises any other ground during the course of appellate proceedings.”
4. Ground nos. 1 to 3 are regarding validity of the reopening of the assessment. The assessee has raised the objection against service of the notice issued u/s 148 of the I. T. Act, 1961. On the other hand, the Ld. DR has submitted that the Assessing Officer has reopened the assessment based on transactions statement and CIB information regarding the transactions carried out by assessee in ‘Multi Commodity Exchange’ (MCX) as well as cash deposits of Rs.42,29,985/- in the bank accounts of the assessee. The Assessing Officer issued the notice u/s 148 of the Act on 08.08.2014 which was duly received by the assessee on 22.08.2014 therefore, there is no question of none service of the notice issued u/s 148 of the Act. He has further contended in response to the notice u/s 148 of the Act, the assessee has not filed any return of income. Even the assessee has not responded to the notice u/s 142(1) of the Act issued by Assessing Officer repeatedly. The requisite information called by Assessing Officer has not been furnished by assessee. Neither requisite details nor books of accounts were produced by assessee during the course of assessment proceedings. Consequential, the Assessing Officer has made addition of Rs.42,29,985/- on account of unexplained deposit in the bank account as well as Rs.1,57,335/- towards income from transactions carried out by assessee on ‘Multi Commodity Exchange’ (MCX) by applying net profit rate at 8% on the receipt of Rs.11,66,687/-. The Ld. DR has pointed out that the Assessing Officer has obtained the necessary details and information from M/s. Karvy Commtrade Ltd. (Broker Hyderabad) by issuing notice u/s 133(6) of the I. T. Act and based the said information the Assessing Officer has estimated the income by applying the net profit rate of 8%. The Ld. DR has submitted that in the absence of any contrary fact or material brought on record by assessee, the CIT(A) is justified in confirming the addition on account of cash deposit in bank account and restricting the addition on transactions with ‘Multi Commodity Exchange’ (MCX) by applying the profit rate @ 1%. He has relied upon the orders of the authorities below.”
4. The learned AR of the assessee has produced the copies of the charge-sheet filed by the police against one Shri. Surya Prakash Verma, under sections 419, 420, 467, 468 and 471 IPC. The learned AR has submitted that the assessee was working with the accused persons namely Shri. Om Prakash Verma and Shri. Surya Prakash Verma, who have misused the bank account of the assessee and carried out the transactions in the commodity exchanged through the bank account of the assesse.
5. Thus, the learned AR has submitted that the assessee could not produce these relevant records before the Tribunal due to the Covid-19 Pandemic and assessee being of advanced age could not attend the proceedings in person or through authorized representative. The learned AR has also referred to the order of the Sessions Judge, Sultanpur on the anticipatory bail applications filed by the accused persons Shri. Om Prakash Verma dated 10.07.2020 and in case of Shri. Surya Prakash Verma dated 13.11.2020. Thus, the learned AR has submitted that the assessee has taken the steps by filing the FIR with the police and after investigation, the police has already filed the charge-sheet against the accused persons. He has pleaded that the impugned order in respect of the ground no. 4 to 10 may be recalled for fresh adjudication after considering the relevant facts and evidence in the shape of FIR, charge-sheet and court proceedings against the accused persons.
6. On the other hand, the learned DR has submitted that the Tribunal has passed the impugned order by considering all the relevant facts and evidence available on record. Once the Tribunal has passed the order on merits, the assessee cannot be allowed to furnish new evidence in the proceedings under section 254(2) of the Income Tax Act. Thus, the learned DR has submitted that there is no mistake apparent from record which can be rectified in the proceedings under section 254(2) of the Income Tax Act. The assessee never raised this issue before the AO and the assessment order was passed ex parte under section 144. Though, the assessee raised this issue before the CIT(A) but no supporting evidence was filed by the assessee. Similarly, before the Tribunal, the assessee failed to produce any evidence in support of the claim that the transactions as recorded in the bank account of the assessee were carried out by some other person and not by the assessee. He has opposed to the misc. application.
7. I have considered the rival submissions as well as relevant material on record. The Tribunal has passed the impugned order dated 15.07.2021 by recording the facts as transpired from the record in para 2 of the impugned order as under:-
“2. None appeared on behalf of the assessee till the matter was taken up at the end of board. The hearing of the matter has been adjourned from time to time either due to none representation of the assessee or on the request of the assessee. On last seven occasion, the hearing of the case was adjourned due to non availability of the assessee and request of the assessee through application. On the last date of hearing i.e. 5th July 2021, the hearing was again adjourned at the request of the assessee and last opportunity was granted. Despite the last opportunity granted to the assesse neither anybody appeared on behalf of the assessee nor any adjourned application is filed. Accordingly, the appeal was taken up for hearing and adjudication exparte.”
8. Thus, when the assessee did not appear to argue the appeal despite seven adjournments were granted nor any application for adjournment was filed the Tribunal was left with no option but to hear and adjudicate the case ex parte. Now, in the misc. application, the assessee is seeking recalling of the impugned order in respect of findings on ground no. 4 to 10 in para 6 and 7 of the impugned order which reads as under:-
“6. The ground nos. 4 to 10 are regarding addition made by Assessing Officer on account of cash deposit made in the bank account by assessee as well as the estimation of income on the transactions carried out with the ‘Multi Commodity Exchange’ (MCX). The assessee has not appeared before the Assessing Officer during the assessment proceedings and the assessment was completed u/s 147 r.w.s. 144 of the Act. The Assessing Officer has issued various notice u/s 142(1) calling the assessee to furnish the requisite details and record however, the assessee did not comply with the notice issued by Assessing Officer. The Assessing Officer then sought information by issuing notice u/s 133(6) of the Act to M/s. Karvy Commtrade Ltd. (Broker Hyderabad) through which the assessee has carried out the transaction on ‘Multi Commodity Exchange’ (MCX). The Assessing Officer has also obtained the bank account statement of the assessee from HDFC Bank and then come to the conclusion that the assessee has made cash deposit in bank account to the tune of Rs.42,29,985/-. The details of the cash deposit made on various dates has been given by Assessing Officer at page no. 3 and 4 of the assessment order. The assessee has not disputed the dates and amount of deposits extracted in the table reproduced by Assessing Officer in the assessment order. In the absence of any explanation regarding source of these deposits, the Assessing Officer has rightly made the addition of the said amount while completing exparte assessment. Even before the CIT(A) as well as before this Tribunal, the assessee has not furnished any details or explanation regarding the source of these deposits. Hence, I do not find any error or irregularity in the orders of the authorities below on the issue of addition made on account of cash deposit in the bank account.
7. As regards the addition made by Assessing Officer on account of income from transactions carried out on ‘Multi Commodity Exchange’ (MCX) it is noted that the CIT(A) has restricted the said addition by applying profit rate @ 1% as against 8% applied by Assessing Office. The CIT(A) has sustained the addition on this account only to the extent of Rs.19,667/- as against Rs.1,57,335/- estimated by Assessing Officer. The assessee has not filed any details or record to controvert the fact that he has carried out the transactions on ‘Multi Commodity Exchange’ (MCX). The estimation of income by CIT(A) by applying net profit at 1% is just and proper. Accordingly, I do not find any reason to interfere with the order of the CIT(A) on this issue.”
9. The Tribunal has upheld the order of the CIT(A) when there was no explanation regarding the source of the bank account of the assessee. Now, the assessee has referred the FIR filed against the accused persons and thereafter the police has also filed the charge-sheet against one Shri. Surya Prakash Verma under sections 419, 420, 467, 468 and 471 IPC. These facts are in public domain and could not be considered by the Tribunal at the time of passing of the impugned order because the same were not brought to the notice of the Tribunal. The facts, now brought to the notice of the Tribunal are relevant and very crucial for deciding the issue under consideration. Accordingly, in the facts and circumstances of the case and in the interest of justice, the impugned order dated 15.7.2021 is recalled to the extent of deciding the ground no.4 to 10 in para 6 and 7 reproduced above to be decided afresh after considering the relevant fact and record on this issue which is an independent evidence in the shape of FIR and charge-sheet filed by the police. The appeal of the assessee is directed to be re-fixed for fresh hearing and adjudication of ground no. 4 to 10.
10. In the result, the misc. application filed by the assessee is allowed. Order pronounced in the open Court on 14.10.2022.
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