AI Structured Summary
Not yet generated for this judgment
Judgment
Per Kavitha Rajagopal, J M:
This appeal is filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act', for short), pertaining to the Assessment Year (‘A.Y.s’ for short) 2020-21.
The assessee has raised the following grounds of appeal:-
“1.That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has grossly erred both in law and, on facts in upholding the determination of income made by the learned Assessment Unit, Income Tax Department of the appellant at Rs.6,49,89,703/- as against declared income at Rs. 30,28,420/- in an order of assessment dated 2.9.2022 u/s 143(3)/144B of the Act.
2 . That learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in not admitting the additional evidence filed by the appellant under Rule 46A of Income Tax Rules’ 1962 (“Rules”)
2.1That the finding that “I am not satisfied that the appellant was prevented by sufficient cause from producing the evidence before the AO. The appellant had ample opportunities to file the documents during the assessment proceedings failed to do so. The reasons cited by the appellant are vague and unsubstantiated. Accordingly, the application for admission of additional evidence is hereby rejected” is factually incorrect, legally misconceived, untenable and infact contradictory.
2.2That without prejudice and in the alternative the learned Commissioner of Income Tax (Appeals) ought to have admitted the additional evidence by invoking section 250(4) of the Act
3.That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has grossly erred both in law and, on facts in sustaining an addition of Rs. 2,30,38,383/- on account of alleged difference in capital account by invoking section 68 of the Act
3.1That while confirming the above addition, the learned Commissioner of income Tax (Appeals) has failed to appreciate that the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.
3.2That finding of the learned Commissioner of Income Tax (Appeals) that “submission that the amount was received from M/s Khatana Wine is not supported by any documentary evidence on record. The appellant did not file any ledger account, bank statements, or confirmation from M/s Khatana Wine during the assessment proceedings” is factually incorrect, legally misconceived and wholly untenable.
3.3That even the conclusion of the learned Commissioner of Income Tax (Appeals) that “the difference is on account of persona/friendly loans is contradictory to his earlier submission that the amount was received from M/s Khatana Wine. This shows that the appellant is changing his stand to suit his convenience” is not based on correct appreciation of facts and circumstances of the case of the appellant.
4.That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in sustaining an addition of Rs. 3,89,22,900/-representing alleged sum received as alleged unexplained unsecured loan by invoking section 68 of the Act
4.1That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.
4.2That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that sum of Rs.3,89,22,900/-received by the appellant had been fully substantiated by documentary evidence placed on record in the course of appellate/assessment proceedings and, therefore such sum could not in law or on fact be held to be unexplained cash credit u/s 68 of the Act.
4.3That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that sum of Rs.3,89,22,900/- had been received through banking channels and as such, addition so sustained is not in accordance with law and untenable.
4.4That finding of the learned Commissioner of Income Tax (Appeals) that “the appellant again changed his stand and stated that the amount includes old unsecured loans of Rs.3,43,22,900/- and new loans of Rs.73,00,000/-. However, no such details were provided during assessment proceedings” is not based on correct appreciation of facts and circumstances of the case of the appellant and therefore unsustainable.
4.5That further finding of the learned Commissioner of Income Tax (Appeals) that “the appellant is not being truthful and is trying to create an explanation to suit his convenience” is factually incorrect and legally misconceived.
4.6That conclusion of the learned Commissioner of Income Tax (Appeals) that “the appellant was given an opportunity of video conferencing on 17.8.2022 to explain the unsecured loans. However, the appellant failed to avail this opportunity This shows that the appellant had no satisfactory explanation to offer” is also factually incorrect and legally misconceived.
4.7That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that even otherwise on account of lack of enquiry by the learned Assistant Commissioner of Income Tax and as such, addition so sustained is not in accordance with law and untenable.
5.That the learned Commissioner of Income Tax (Appeals) has erred both in law an on facts in recording various adverse inferences which are contrary to the facts on record, material placed on record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted.
6.That without prejudice to the above and in the alternative, even otherwise, the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts m holding that sum received by the appellant is taxable as income under section 68 of the Act and thereafter computed the demand in accordance with the rates specified m section 115BBE of the Act as amended by Taxation Laws (Second Amendment) Act, 2016.
7.That since the order of assessment dated 2.9.2022 u/s 143(3)/144B of the Act framed by the learned Assessment Unit, Income Tax Department is without jurisdiction and deserves to be quashed as such.
7.1That the learned Commissioner of Income Tax(AppeaIs), National Faceless Appeal Centre (NFAC) has failed to appreciate that personal hearing is a mandatory requirement to be satisfied u/s 144B of the Act and non-grant thereof vitiates the assessment and therefore the same is a nullity.
7.2That even otherwise the learned Commissioner of Income Tax (Appeals) passed the order without granting sufficient proper opportunity to the appellant and therefore the same is contrary to principle of natural justice and hence vitiated.
8.That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs.13,77 801 u/s 234A of the Act, interest of Rs.1,37,78,010/- u/s 234B of the Act and interest of Rs.1,83,045/- which are not leviable on the facts of the appellant.
Prayer
It is therefore prayed that the additions made and sustained by the Learned Commissioner of Income Tax (Appeals) along with interest levied be deleted and appeal of the appellant be allowed.”
Brief facts of the case are that the assessee filed his return of income for the year under consideration on 08.01.2021 declaring total income of Rs.30,28,420/-and the assessee’s case was selected for complete scrutiny on the issue of ‘Income from Liquor Business.’ The Ld. AO issued notice u/s 143(2) of the Act on 29.06.2021 and notices u/s 142(1) were also issued from time to time as detailed in the assessment order requesting the assessee to provide all documents as asked for in the detailed questionnaire annexed with the notice. The Ld. AO issued a show-cause notice on 20.12.2021 giving the assessee a final opportunity to show cause as to why assessment proceedings may not be completed ex parte and was given five days to respond. Again notices u/s 142(1) and 144 were issued and the assessee filed reply to pending queries on 13.03.2022. On perusal of the submissions of the assessee and other relevant documents, the Ld. AO proposed two additions, viz., (i) addition u/s 68 for difference in capital proprietor fund – Rs.2,30,38,383/-; and (ii) addition u/s 68 for unexplained unsecured loans – Rs.3,89,22,900/-. The Ld. AO then passed the assessment order dated 02.09.2022 determining the total income at Rs.6,49,89,703/-, after making an addition of Rs.6,19,61,283/- towards unexplained capital and unsecured loan. Penalty proceedings u/s 271AAC(1) were also initiated on the above two additions made u/s 68 of the Act.
Aggrieved, the assessee filed an appeal before the Ld. CIT(A), who vide order dated 06.03.2026, dismissed the appeal filed by the assessee without considering the additional evidence filed by the assessee and confirming the additions made by the Ld. AO since the documents specifically asked for by the ld. AO were not submitted before him at the assessment stage. Aggrieved, the assessee is in appeal before us raising aforementioned grounds of appeal.
We have heard the rival submissions and perused the material available on record. It is observed that the Ld. CIT(A) has dismissed the appeal on the ground inter alia that written submissions were not filed to substantiate his case although various notices were issued by the Ld. CIT(A) calling for the same during the appellate proceedings. Before us, the Ld. AR for the assessee prayed that the assessee be given one more opportunity to present its case before the CIT(A) by filing written submissions, stating that the assessee has got a good case on the merits.
The Ld. DR vehemently opposed to granting the assessee another opportunity for the reason that the assessee has been non-compliant before the first appellate authority.
On the above facts of the case, we deem it fit to extend the assessee with one more opportunity to present his case before the Ld.CIT(A) by adhering to the principles of natural justice and in the interest of justice dispensation. The assessee is directed to strictly comply with the proceedings before the Ld. CIT(A) who is to adjudicate all the grounds raised by the assessee, both legal as well as on the merits, after considering all the evidences filed by the assessee along with additional evidences, if any, in accordance with the provisions of law and on the merits of the case. The grounds of appeal raised by the assessee are hereby allowed for statistical purposes
In the result, the appeal filed by the assessee is allowed for statistical purpose as per the above observation.