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TMI Blog2023 (12) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A), NFAC, Delhi has erred in law and on fact to pass ex-parte appeal order without providing adequate opportunity of being heard as well as to decide the appeal only on statement of fact and grounds of appeal raised in appeal Memo. 2. Ld. CIT(A),NFAC, Delhi has erred in law and on fact to upheld AO's action for initiation proceedings u/s 148 of the Act when ITR was filed u/s 139 and there was no cogent reason for reopening of assessment. 3. Ld CIT(A), NFAC, Delhi has erred in law and on fact to confirm AO's assessment u/s 143(3) r.w.s.147 of the Act. Without rebutting appellant objection and without passing speaking order as required under the law and as per the guidelines of Hon'ble Supreme Court in the case of GNK DRIVESHAFT. 4. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to uphold total addition of Rs. 29,09,512/- / and / or AO's addition u/s 69A at Rs. 28,76,000/- ignoring the fact that the said amount is a gross receipts and not the income chargeable to tax. 5. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to direct the AO to give telescoping effect of cash withdrawal against cash deposit during the year under appeal. He further erred in direct in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to ease compliances to be made by taxpayers during this difficult time, reliefs are being provided through Notifications nos. 74/2021 & 75/2021 dated 25th June, 2021 Circular no.12/2021 dated 25th June, 2021." Honourable Supreme Court of India has also granted substantial relief w.r.t. filing of appeals, petitions, various proceedings under different laws, compliances, reply to notices, assessment proceedings etc. Last of such orders is in MA No.21/2022 whereby period from 15.03.2020 to 28.02.2022 stands extended. Further 90-days period is allowed w.e.f. 01.03.2022 (i.e., upto 31.05.2022) vide their order dated 10.01.2022. Ld. CIT(A), NFAC, Delhi has decided my appeal on 15-03-2022 (i.e. during Covid-19 effected period) ex-parte on the ground of nonappearance/ non-filing of supporting documentary evidences in response to his notices u/s 250 of the Act dated 09.12.2021, 20.12.2021 and 02.03.2022, which was neither in my knowledge nor in the knowledge of my CA Shri Jignesh Sha, who has filed appeal for me. 4- Thereafter, my family members have put strict restriction upon me for going outside the home. My auto consulting business was also closed in those days. Even they are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 10.01.2022. 6. The Ld. Counsel further stated that balance delay in filing both the appeals are on medical ground. The ld Counsel explained that due to severe illness suffered by assessee and the assessee was treated in hospital and in fact Form No.36 (appeal memo) was signed by the assessee in hospital while sleeping on bed itself. Therefore, considering the severe illness, the balance delay in filing the appeal may be condoned. 7. On the other hand, Ld. Sr-DR for the Revenue submitted that only part delay was covered by the judgment of Hon'ble Supreme Court in suo motu Writ Petition in MA No.21/2022 and the balance delay in filing both the appeals have not been explained by the assessee in a satisfactory manner. Therefore, delay should not be condoned and both the appeals of assessee should be dismissed. 8. I have heard both the parties on this preliminary issue. I note that Hon'ble Supreme Court of India has granted substantial relief w.r.t. filing of appeals, petitions, various proceedings under different laws, compliances, reply to notices, assessment proceedings etc. Last of such orders is in MA No.21/2022 whereby period from 15.03.2020 to 28.02.2022 stands extended. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erspective to the obtaining fact-situation. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis. (iv) No presumption can be attached to deliberate cause of delay but, gross negligence on the part of the counsel or litigant is to be taken note of. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behavior and attitude of a party relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act was issued on 28.03.2017 which was duly served upon the assessee on 31.03.2017. In response, the assessee, vide his letter dated 12.07.2017 stated that return of income originally filed for A.Y. 2010-11, on 31.03.2011 may treated as return filed in response to notice issued u/s 148 of the Act. Further notice u/s 143(2) of the Act has been issued on 18.08.2017 and duly served and reasons recorded for reopening of assessment has been provided to the assessee vide letter dated 18.08.2017. 14. On verification of bank statement, it was noticed by the Assessing Officer that during the relevant A.Y. 2010-11, the assessee has deposited following amount in his above said bank accounts: Sl.No. Name of bank Account No. Amount of cash deposited Amount other than cash deposited 1 HDFC Bank Vapi 01701000054723 14,55,300/- 7,21,200/- 2 Bank of Baroda, Fansa Br. 10050100007221 1,42,000/- 3 Dena Bank, Fansa Br. SB-3745 53,250/- 4 ICICI Bank 017901501413 5,04,250/- 21,54,800/- 7,21,200/- During the course of assessment proceedings, the assessee was asked to explain the source of the said amount deposited in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-, whereas the amount deposited in the bank account by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the Assessing Officer. 18. Shri Rajesh Upadhyay further stated that in the reasons recorded, the Assessing Officer stated that assessee has filed the return of income showing total income of Rs. 1,62,500/-. However, in fact, the assessee has filed his return of income showing total income to the tune of Rs. 1,43,560/-, hence reasons were recorded based on arbitrary basis. The Ld. Counsel also stated that during assessment stage assessee requested Assessing Officer that reopening of assessment is not valid and assessee objected the reopening of assessment, despite of this, the Assessing Office did not dispose of the objection raised by the assessee in respect of reopening of assessment u/s 147 r.w.s. 148 of the Act. Therefore, it is against the judgment of Hon'ble Supreme Corut in the case of GKN Driveshafts (India) Ltd. vs. ITO And Ors. in Civil Appeal No.7731 of 2002 dated 25.11.2002. Since the Assessing Officer without disposing of the objections raised by the assessee, framed the re-assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B') 21. I have observed that above objections raised by the assessee during the assessment stage have not been disposed of by the Assessing Officer. I note that the proper course of action for the notice u/s 147/148 is to file return of income and if assessee so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the assessee`s case, the Assessing Officer has not disposed of the objections raised by the assessee by passing a speaking order, therefore reassessment proceedings u/s 147/148 of the Act are void, for that reliance can be placed on the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra), wherein it was held as follows: "We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays that he may be allowed one more opportunity of being heard. 4. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to uphold total addition u/s 69A of Rs. 6,85,838/- ignoring the fact that the said amount is a gross receipts out of appellant's auto consultation business and not the income chargeable to tax. 5. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to direct the AO to give telescoping effect of cash withdrawal against cash deposit during the year under appeal. He further erred in directing in the AO to apply percentage of profit on gross receipts appearing in the appellant record. 6. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to uphold AO's addition for bank interest at Rs. 983/-. Further the appellant is also eligible for deduction u/s 80C and 24b of the Act, which may be directed to be allowed to the appellant." 27. At the outset, Ld. Counsel for the assessee informs the Bench that assessee does not wish to press ground No.1, therefore, I dismiss ground No.1, as 'not pressed'. 28. Succinct facts qua the issue are that during the assessment proceedings, on verification of bank statement of bank account No.01701000054723 maintained with HDFC bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the money, so deposited in the bank. 33. I have heard the rival arguments made by both the sides and perused the material available on record. Admittedly, the Assessing Officer during the assessment proceedings made addition on account of cash deposited aggregating to Rs. 2,64,500/-, as well as amount deposited by cheques is to the tune of Rs. 4,20,355/-. The amount deposited by way of cheques in the bank account is out of known sources, hence addition should not be made in the hands of the assessee, hence addition to the tune of Rs. 4,20,355/- is hereby deleted. 34. So far cash deposit of Rs. 2,64,500/- is concerned, I note that issue under consideration is longer res integra and Co-ordinate Bench of this Tribunal in the case of Mukesh K. Lakahni v. ITO, in ITA No.20/SRT/2023 A.Y 2010-11, order dated 04.09.2023 wherein it was held that ad hoc addition at the rate of 5% of cash deposited in the bank account, is fair addition in the hands of the small assessee considering the smallness of the amount. The findings of the Tribunal are reproduced as follows: "11. I note that the total credit in the bank statement, after eliminating contra-entries, comes to Rs. 23,24,831/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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