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Judgment
PER AMITABH SHUKLA, AM,
This appeal filed by the assessee is against order dated 11.06.2025 of the Learned Addl./JCIT(A)-2, Visakhapatnam, [hereinafter referred to as ‘ld. CIT(A)] arising out of rectification order dated 27.07.2022 passed 154 of the Income Tax Act, 1961 pertaining to Assessment Year 2018-19. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.That Leaned Assessing Officer (here in after referred as LAO) has arbitrary passed the order u/s 143(3) read with section 144B dated 10/09/2021 and rectification order dated 27.07.2022 imposing heavy Addition of Rs. 36,91,18,961/- and demand is Rs 40,49,08,535\-I have demanded personal hearing on Video Conferencing but the AO not fixed date and time and passed the order arbitrary. This is completely in brazen, flagrant and violation of principal of natural justice, without providing the opportunity of being heard to me for presenting my case. Difference between date of show cause notice and date of order is very less. I and my professional were suffering from corona diseases. This was clearly violation of basic principle of Audi Alteram Partem. Hence, the addition should be deleted.
2.That LAO has passed the order u/s 143(3) read with 144B dated 10.09.2021 and issue rectification order dated 27.07.2022 without taking into consideration the modus- operandi of my business. I have filed my ITR from the last three to four years as a commission agent on the actual commission basis under the head income from business or profession. The same is never been objected by the IT department. LAO has not considered the rule of consistency before issued this useless assessment order and blindly park Rs 36,91,90,481\- as additional income under the head Income from other sources and impose heavy demand Rs 40,49,08,535/-and make addition without any base recorded in the assessment order using his arbitrary power. Hence, the addition should be deleted.
3.LAO has passed the order u/s 69A read with section 115BBE. I am very sorry to say this LAO has lack of knowledge of income tax and he has inappropriately applied section 69A of the IT Act. Facts of the case are completely different and scope and area of 69A are different. Hence addition must be deleted.
Before proceeding further, we deem it appropriate to briefly recapitulate the facts of the present case. The Return of income declaring Rs.71,520/- was filed by the assessee on 13.08.2018. Subsequently, scrutiny proceedings were initiated. The ld. AO noted that the assessee had deposited cash of Rs.36,91,18,961/- and for which no explanations for coming forward from the assessee. The ld. AO proceeded to add the amount of Rs.36,91,18,961/- under section 69A of the Act, vide his order under section 143(3) r.w.s. 144B dated 10.09.2021. Subsequently, the ld. AO noted that the assessee ought to have been taxed at a special rate of 60% along with surcharge @25% on the impugned Rs.36,91,18,961/- under section 115BBE of the Act. Consequently, through order under section 154 r.w.s. 143(3) dated 27.07.2022. The assessee contested the said order dated 27.07.2022 before the ld. CIT(A), who dismissed the assessee’s appeal through his order dated 11.06.2025.
The ld. Counsel for the assessee before us vehemently argued against the order of ld. CIT(A) stating that the same is against law and deserves to be quashed. The ld. Counsel submitted that the cash deposited in assessee’s bank account was having genuine sources and that it is integral to the line of business persuade by the assessee. It was submitted that the assessee earns minor amount of commission on the said cash.
The ld. CIT-DR, Shri Mahesh Kumar, fiercely argued in favour of the order of ld. CIT(A). Reference was invited to grounds of appeal raised before the ld. CIT(A). It was submitted that the impugned grounds were qua merits of the addition did not have any connection with the appeal of the assessee made to contest AO’s order under section 154 r.w.s. 143(3) dated 27.07.2022. The ld. DR submitted that invocation of taxing at a special rate of 60% along with surcharge @25% on the impugned Rs.36,91,18,961/- under section 115BBE of the Act was a mandatory statutory provision. Non-invocation section 115BBE of the Act in the original assessment order dated 10.09.2021 was a mistake apparent from record amenable to correction under section 154 of the Act. The AO was thus not at fault. It was argued that the assessee in his appeal before the ld. CIT(A) qua invocation of section 115BBE did not raise any ground as to the impermissibility of the order under section 154 of the Act. The ld. DR submitted that the assessee was at liberty to contest the merits of the addition before the ld. First Appellate Authority in respect of order under section 143(3) dated 10.09.2021.
We have heard the rival submissions in the light of material placed on record. We have noted from the grounds of appeal raised before the ld. CIT(A) and which have been extracted on para-3 of his order dated 11.06.2025 that the assessee had not taken any ground regarding the impermissibility of the order under section 154 of the Act. It was seen that it had merely contested the addition of Rs.36,91,18,961/- made by the ld. AO through his order under section 143(3) dated 10.09.2021. As per the contemporary statutory provisions covering the subject both orders u/s 143(3) and u/s 154 are separately appealable u/s 250 before the Ld. CIT(A). The doctrine of merger doesn’t operate in such cases. Accordingly, we do not find any need to interfere with the order of Ld. CIT(A) at this stage. The appeal of the assessee is therefore dismissed.
In the result appeal of the assessee is dismissed.