2022 (12) TMI 1211 - AT - Income Tax

Addition u/s 69A - receipt of credible information that the assessee and another were indulged in illegal storage and selling of banned noxious tobacco products at the premises of assessee, police authorities reached spot and found certain tobacco in the racks of shop and also cash - assessee did not respond to any of the notices and hence, the AO completed the assessment inter-alia by making an addition - HELD THAT - On categorical enquiry by the Bench from the ld.AR whether he had appeared on behalf the assessee or any other counsel appeared on behalf of the assessee to pursue the matter before the ld.CIT(A). To which, the ld.AR replied that he was not the person who appeared before the ld.CIT(A) and some other counsel represented the matter before the ld.CIT(A). Though, the earlier AR was not the counsel before us, however, no reasons were brought on record, substantiating his absence during the appellate proceedings before the ld.CIT(A). It is a serious misconduct on the part of the earlier ld.AR for which necessary remedial action should be taken by the concerned authority. However, on account of the fault of authorised representative / chartered accountant / advocate of assessee, the assessee should not be made to suffer and more particularly, when the assessee happened to be a senior citizen and is not conversant with the digital communication. Therefore, we deem it appropriate to restore the appeal for afresh adjudication before the ld.CIT(A) and hereby direct the ld.CIT(A) to grant one opportunity only to the assessee. Assessee is also directed to appear for the hearing in time before the ld.CIT(A) for afresh adjudication. The assessee shall file all the documents at the first instance and shall not any adjournment before the ld.CIT(A). In light of the above, the appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Addition of Rs.19,79,950/- u/s 69A of the Income Tax Act for A.Y. 2019-20.

Analysis:
The appeal before the Appellate Tribunal ITAT Hyderabad pertained to the addition of Rs.19,79,950/- under section 69A of the Income Tax Act for the assessment year 2019-20. The case involved the assessee, an individual deriving income from the sale of Pan Masal and Tobacco, who failed to explain the source of cash found during a police raid at his premises. The Assessing Officer treated the unexplained cash as income and made an addition of Rs.19,79,950/- under section 69 of the Act. The Commissioner of Income Tax (Appeals) dismissed the appeal on non-prosecution and merits, leading the assessee to appeal before the ITAT.

The assessee, aged about 70 years and suffering from old age ailments, claimed inability to respond to notices due to health reasons. The authorized representative for the assessee requested another opportunity to participate in the proceedings before the CIT(A). The Departmental Representative opposed the request, citing the assessee's failure to respond despite multiple opportunities granted by the CIT(A). The ITAT noted the absence of the authorized representative during the appellate proceedings before the CIT(A and deemed it a serious misconduct. However, considering the assessee's age, health condition, and lack of familiarity with digital communication, the ITAT directed the CIT(A to grant one opportunity to the assessee for a fresh adjudication.

In conclusion, the ITAT allowed the appeal of the assessee for statistical purposes, emphasizing the need to balance procedural compliance with the assessee's circumstances. The ITAT's decision to grant a fresh opportunity for adjudication before the CIT(A) aimed to ensure fair proceedings while considering the challenges faced by the elderly and their representatives in engaging with the legal process.