Mahinder Parkash vs The A.C.I.T.

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-

This appeal by the Revenue is preferred against the order of the NFAC, Delhi dated 19.01.2024 pertaining to A.Y. 2017-18.

There is a delay of 42 days. The assessee has filed an application alongwith an affidavit to substantiate the fact that all the notices sent to him remained undelivered as he was not in India during last few years. Having perused the affidavit, we find the reasons stated by the ld. counsel for the assessee in the affidavit to be plausible. We, therefore, condone the delay.

Briefly stated, the facts of the case are that the assessee, Mahinder Parkash, was running his proprietorship business in the name of Shree Balaji Enterprises (India). The assessee was the whole seller of E-rickshaw and its parts which was his family business. During the demonetization period in A.Y 2017-18, cash of Rs. 26,46,000/- was deposited in different banks accounts owned by him. Further total amount credited in different bank accounts including above cash deposited, amounted to Rs 7,38,29,227/-.

During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has not furnished his return of income and since the assessee is the owner of the credits made in his bank accounts for which no explanation was furnished and as per the SOPs followed while completing assessment proceedings relating to demonetization cases, the Assessing Officer made addition of Rs. 7,38,29,230/-u/s 68 of the Act in the hands of the assessee.

When the assessee went in appeal before the ld. CIT(A), the ld. CIT(A) upheld the order of the Assessing Officer.

Aggrieved further, the assessee is in appeal before us.

Before us, the ld. counsel for the assessee stated that everything was running good till March-April 2017. However, from May 2017 onwards, business started incurring losses. The assessee failed to meet his loan commitment also. Due to this, his property was seized and recovery proceedings were initiated against him and which is going on. Due to the above facts, the assessee defaulted in filing his return of income. The ld AR stated that there was huge financial crisis and assessee was also not able to file appeal within the stipulated time.

Per contra, the ld. DR relied on the orders of the Assessing Officer and the ld. CIT(A).

We have heard the rival submissions and have perused the relevant material on record. We find that the AO has completed the assessment u/s 144 on account of the fact that the assessee did not submit any response in the e-filing portal for online verification of the cash deposit during the demonetization period. The CIT(A) also confirmed the addition in absence of any response coming from the assessee.

10 We find that due to the assessee’s absence from India and seizure of assessee’s premises by the Lending Institutions, the notices issued by the AO and the CIT(A) remained unserved and not responded to. We find force in the contentions of the ld. counsel for the assessee that in such circumstances, the assessee may be given an opportunity to explain its case. We are therefore, of the considered view that in the interest of justice and fair play, the issue of substantive addition on account of cash deposit, be restored to the file of the Assessing Officer to adjudicate the matter de-novo. The Assessing Officer is directed to rehear the appeal after affording reasonable and adequate opportunity of being heard to the assessee. The assessee is directed to furnish all necessary documents/evidences called for by the Assessing Officer. The grounds of the assessee are allowed for statistical purposes.

In the result, appeal of the assessee in ITA No. 2097/DEL/2024 is allowed for statistical purposes.