9911796707
TMI Blog2025 (5) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... OVID-19, resulting in non-appearance and non-compliance with hearing notices. 2. That the Ld. CIT(A) did not verify whether the notices were duly served to the appellant but proceeded to dismiss the appeal in an arbitrary manner. 3. That the Ld. CIT(A) failed to consider that the appellant is a senior citizen with limited knowledge of tax matters and that the delay in compliance was due to genuine and reasonable causes beyond his control. 4. That the Ld. CIT(A) ought to have adjudicated the case on merits instead of passing an ex-parte order dismissing the appeal. 5. The Ld. CIT(A) have erred in law and on facts by holding that the appellant has concealed income of Rs. 1,50,558/- received as pension and Rs. 64,065 received as interest income while the same was duly explained during the assessment proceedings. 6. The Ld. CIT(A) and the Ld AO have erred in law and on facts holding that the appellant has concealed income of Rs. 60,958/- whereas the same was duly explained during the assessment proceedings. 7. The Ld. CIT(A) and Ld AO have erred in law and on facts by treating amount of Rs. 10,00,000/- unexplained income, without taking into consideration the same was prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court and various High Courts have held that liberal interpretation should be applied while condoning the delay in genuine cases. 9. That the appellant has a strong prima facie case on merits and is likely to succeed in appeal. If the delay is not condoned, the appellant will suffer irreparable loss and hardship. Prayer: In view of the above facts and circumstances, the appellant most humbly prays that the Hon'ble Tribunal may kindly condone the delay in filing the appeal and admit the same in the interest of justice. 4. During the course of hearing, the ld. DR stated that reasons advanced are not sufficient to condone the delay of as many as 378 days in the present case. However, prayed that the bench may decide the issue as deem fit in the interest of justice. 5. Heard the parties and perused the materials available on record. The bench noted that counsel of the assessee who was handling the appeal work of the assessee was passed away in the covid-19 pandemic and therefore, there is a merit in the reasons advanced and we concur with the submission of the assessee. Thus the delay of 378 days in filing the appeal by the assessee is condoned in view of the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by son and given to the assessee which was deposited by the assessee himself in his account was also not considered because his son was also assessed to tax and having his own bank account. The cash deposited was converted into FDRs and therefore, the explanation of the assessee was considered as baseless. Ld. AO also considered the fact that those FDRs were ultimately given to his sons does not explain the source of cash deposit. Therefore, cash deposit to the extent of Rs. 10,00,000/- was considered as unexplained cash credits and was added as income of the assessee. Ld. AO also added interest income of Rs. 64,065/- and Rs. 60,958/- as unexplained credits and thereby against salary head income of Rs. 1,50,558/- income was determined at Rs. 12,75,581/-. 7. Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: "3.4. I have perused the grounds of appeal, statement of facts and the assessment order. From the assessment order it can be seen that the AO has followed the due procedure laid down in the I.T. Act, 1961 after recording reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and made an addition of Rs 10,00,000/- on this account. The relevant portion of the assessment order is reproduced below for ready reference: 7.3 The submission given by the AR is considered but not found verifiable on the following reasons:- i) That no supporting documentary evidences have been filed in regard to claim. ii) The claim of assessee regarding receipts of a huge amount as marriage gift is not acceptable considering the facts of the case and in absence of the any documentary evidences. iii) Further, the claim that the amount was received by son and given to the assessee which was deposited by assessee himself in his account, is not acceptable facts considering that the son was also assessed to tax and was having is own bank account (iv) It is very surprising facts that the cash receipts claim to be marriage gift was utilized by the assessee in making FDRs. This fact is clearly evident that in both the instance, the assessee has deposited the entire cash for making FDRs. v) As, the assessee was not having any fund other than the cash gift as claimed, therefore claim regarding purchase of FDRs from the cash gifts, is totally baseless because it is not possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limits throughout the period, hence, he was not well versed with the provisions of the Income Tax Act, 1961. 3. The appellant was issued notice under section 148 of the Income Tax Act on 30/03/2017 by Ld. AO for charging income tax on the escaped assessed income within the meaning of section 147 of the Income Tax Act for the assessment year 2012-13. On 12/09/2017, notice under section 142(1) of the Income Tax Act, 1961 was issued to produce a Source of income, copy of IT return filed with Computation of total income, copy of audit report with all enclosures, evidence regarding Deduction claims under Chapter VI of the Income Tax Act, 1961, Copy of all Bank statements for the relevant period, and Source of Cash deposited and Credit entries. The assessee complied with the aforesaid notice under section 142(1) of the Income Tax Act, 1961 through an Authorized Representative (AR), CA K.L. Sharma. 4. The Show Cause notice was issued under section 144 of the Income Tax Act 1961 for AY2012-13, ex parte assessment on 26.10.2017 by stating that the last opportunity given to produce the details, documents, books of accounts and explanations with supporting evidence on cash deposit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial to controvert the findings of the Ld. AO. No evidence was furnished during appellate proceeding and despite several opportunities being provided. The CIT (A) order also stated that the appellant is not interested in pursuing his appeal so have no reason to interfere with the findings of the Ld. AO. The appeal is dismissed. 9. The appellant could not participate in the appellate proceedings due to a Bonafide reason (death of the appellant's authorized representative) and as the mail id on which the notices were sent also belonged to the A/R of the appellant. 10. It was only when notice dated 16.01.2025 under section 274 r.w.s. 271(1)(c) was served upon the appellant on his registered address, upon which he consulted to a Tax Consultant, and came to know about the order of the Ld. CIT (A). 11. Upon verification of the Income Tax login of the appellant, it was seen that the notices were served upon the mail id of the A/R and as the faceless proceedings were carried out, the appellant had no clue about the proceedings being undertaken. 12. Being aggrieved by the order of the Ld. CIT (Appeals), this appeal is filed before this Honorable Bench of ITAT. Grounds of Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair opportunity of hearing is not justified. The Hon'ble Supreme Court and various High Courts have consistently held that the right to be heard is a fundamental aspect of justice. The appellant respectfully submits that the Ld. Commissioner of Income Tax (Appeals) [CIT (A)] erred in dismissing the appeal without verifying whether the hearing notices were duly served upon the appellant. This action amounts to a violation of the principles of natural justice. The Ld. CIT (A) arbitrarily dismissed the appeal without ascertaining whether the notices were properly delivered to the appellant. The appellant was deprived of an opportunity to present its case due to this procedural lapse. It is a settled principle that any order passed without ensuring proper service of notice is unsustainable in law. The Hon'ble Supreme Court and various High Courts have held that failure to serve notice properly vitiates the entire proceedings. The present appeal has been filed against the order of the Learned Commissioner of Income Tax (Appeals) [CIT(A)] dated 21.11.2023 vide Letter No. ITBA/NFAC/S/250/2023-4/1058106844(1) wherein the appellant's claim has been unjustly rejected without due conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o file a return of income only if the total income after deductions exceeds the maximum amount not chargeable to tax. Since the appellant's income was below this threshold, there was no legal requirement to file a return. The entire income was derived from disclosed sources, namely pension and Bank interest, which are traceable through Banking channels. Therefore, the finding of concealment is completely unjustified. The Ld. CIT(A) erred in holding that the appellant concealed income without considering the fact that the appellant had no taxable income requiring the filing of a return. The addition made is arbitrary and against the settled principles of taxation. Our Submissions on the Ground 6 The present appeal has been filed against the order of the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], wherein it has been erroneously held that the appellant has concealed income of Rs. 60,958, whereas the same was duly explained during the assessment proceedings. The appellant is a senior citizen who is responsible to manage the household expenses to support his whole family and hence it was decided by the appellant's son to transfer his certain monthly receipts around Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him. 2) The amount was deposited in the bank account out of the cash gifts received on the occasion of his son's marriage and that the same was explained to the Ld AO during the assessment proceedings. 3) The amount deposited in the bank account did not represent any income to him at all, further this amount on maturity, was transferred to his son through RTGS on 29.04.2016, as also examined and confirmed to the Ld AO. 4) The receipt of cash gifts during the time of marriage is a common custom in Indian society and should not be treated as income. The same was to be repaid to his son, evidencing its non-income nature. 5) The amount was received from various persons, mostly belonging to the Sindhi community, which is an influential community in Jaipur. The system of giving cash gifts as shagun is a prevailing customary practice, being practiced all over India. 6) It is apparent that the pension holder having old age without any working capacity, retired from a very lower cadre with a pension of Rs. 12,500, otherwise also, how he can earn so much of heavy amount on a particular day. Hence, the Ld. AO grossly erred to treat the amount deposited in Bank Account as unexpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The additions made are arbitrary, unjustified, and contrary to the principles of natural justice. As the Ld AO has made the addition on the basis of mere suspicion, we would like to rely on the judgment passed by the Honorable Supreme Court in the following cases: In the case of Dhakeswari Cotton Mills Ltd. the Hon'ble Supreme Court has held that the AO cannot complete the assessment purely on guess and without any reference to evidence or any material at all. Also, in the case of Umacharan Shaw & Brothers (supra), the Apex Court has held that AO cannot complete the assessment merely on suspicion which cannot take the place of proof in these matters. Further, in support of our argument, we are also relying on the order of the Honorable Coordinate Bench in the following referred cases: 1. Sunil Kothari Versus Dcit, Circle (Intl. Tax.), Jaipur. (2022 (8) Tmi 1072 - Itat Jaipur) 2. Abhilasha Jain Vs Dcit (2022 (8) Tmi 303 - Itat Jaipur) Hence, in view of the above facts, it is requested that your kind Honors to kindly delete the addition of Rs. 10,00,000 and allow the appeal of the appellant." 9. The contention raised in the written submission were supported by the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed also filed an affidavit that the sources of money for an amount of Rs. 5,00,000/- contended before the ld. AO was sourced from the money received at the time of marriage ceremony of his Son Sh. Samir Chugh younger son of the assessee who got married. The assessee in support of that contention and in furtherance to the contention so raised before Assessing Officer filed an affidavit given names of all the parties who are relative to the assessee given marriage gift for an amount of Rs. 5,17,040/- and out of that money, the assessee has deposited cash, so the contention raised before Assessing Officer is further supported by gift deed and affidavit and therefore, looking to this record which are not additional evidence but in furtherance to the contentions already on record and considering the age of the assessee and in the interest of substantial justice the contention of the assessee be considered at this stage. The assessee was a government employee and deposit of cash of Rs. 10,00,000/- stand explained and considering the interest of substantial justice and looking to the age of the assessee the matter may be decided based on this evidence. 11. Per contra, ld. DR relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r furnished any computation of total income. Based on that set of facts ld. AO considered the pension income and interest income as undisclosed income in the hands of the assessee. Considering the overall material facts of the case since the assessee is retired government employee his pension income cannot be considered as unexplained income and thereby even the interest income also so far as the principal amount is not disputed. Therefore, we direct the ld. AO to tax that income regular income of the assessee. Based on this observation ground no. 5 raised by the assessee is allowed. Vide ground no. 6 the assessee challenges the addition of Rs. 60,958/-. The brief facts related to that dispute are that a sum of Rs. 60,958/- claimed to be received as rent from the son's property. The money has been credited every month in the bank account of the assessee. The ld. AO has treated that amount as unexplained cash credits in the absence of evidence. Records also reveal that verification of record were called for from Shri Ravi Kumar Chugh and he has replied by giving his ITR. The ld. AO added that amount only on ground that the ITR does not shows income, how income which is received by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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