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TMI Blog2024 (12) TMI 1425X X X X Extracts X X X X X X X X Extracts X X X X ..... ales; it is only reason to suspect merely for verifying the deposits RTGS credits into bank, there is no live link/ nexus between the "information of deposits into bank" & 'formation of believe' for alleged escaped income of Rs. 4,09,20,476, in absence of pre-requisite condition for assuming jurisdiction u/s147, reopening w/148/147 would be invalid, liable to be quashed; relied on Lakhmani Mewaldas (1976) (SC); Shodiman Investments (P) Ltd (2018) (Bom); Meenakshi Overseas (P) Lad (2017) (Del HC); Smt Sudesh Rani (2023) (Chd-Trib); Jai Prakash Gupta (2021) (Kol-Trib); 2. On the facts and circumstances of the case and in law, reassessment made u/s147 is invalid as there is addition made of Rs. 20,46,924 on count of undisclosed business income (i.c., u/s 28) which is not the issue of the "reasons recorded"; the 'very basis of reopening was 'unverifiable/ unexplained deposits/ credits into bank' (ie, u/s 69A/68) and no addition made on the 'very Issue; addition made on 'independent issue' of 'business income', which is not the part of the "reasons recorded earlier, is not permissible in the eyes of law, reassessment made u/s147 would be invalid & is li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings before the first appellate authority, therefore, the latter was constrained to dismiss the appeal vide an ex-parte order. For the sake of clarity, the observations made by the CIT(A) are culled out as under: "3. The appellant's appeal was fixed for hearing on the following dates: SL. No. DATE OF NOTICE DATE OF HEARING REMARKS 1. 04/08/2023 11/08/2023 No reply 2. 09.11/2023 16/11/2023 No reply 3. 05/01/2024 12/01/2024 No reply 4. 02/02/2024 09/02/2024 No reply 5. 09/02/2024 15/02/2024 No reply There was no compliance to above notices which were sent on the email id, registered under e-fling portal. Despite given repeated opportunities of being heard, there has been no compliance to the notices. It is apparent that the appellant is not interested in pursuing his appeal. In the absence of any submission from the appellant, the grounds of appeal are decided on merits on the basis of facts available on record. 4. Facts of the case: The appellant filed the return of income for AY 2013-14 on 29/11/2013, declaring total income of Rs. 4,94,455/-, which was processed u/s 143(1) of the IT Act. Subsequently, the case was reopened u/s 147 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was reopened u/s. 147 of the I.T. Act for the A.Y.2013-14 by issue of Notice u/s. 148 dated 30.03.2021 after recording the reasons and approval of the Competent Authority. The said Notice was duly served upon the assessee on 30.03.2021 through registered e-mail. The assessee was required to file Return of Income within 30 days from the date of service of Notice. However, the assessee had not filed Return of income in response to the Notice. Notice u/s. 142(1) was issued on 26.11.2021 requesting to furnish ITR filed in response to Notice u/s.148 and to explain the sources for credits in bank accounts. The assessee has again not complied with the Notice. 4. The case was transferred to NaFAC under Faceless Assessment Scheme, 2019 The following Notices u/s. 142(1) had been issued along with a Questionnaire calling for information:- Sl No. Date of issue of notice u/s 142(1) Date of Compliance Document Number (DIN) 1 16.12.2021 31.12.2021 ITBA/AST/F/142(1)/2021- 22/1037877934(1) 2 05.01.2022 13.01.2022 ITBA/AST/F/142(1)/2021 22/1038448158(1) 3 18.01.2022 25.01.2022 ITBA/AST/F/142(1)/2021- 22/1038828084(1) All the Notices were served upon the assessee on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts were credited with an amount of Rs. 4,09,20,476 and followed by total cash withdrawals of Rs 4,01,95,400 during the F.Y. 2012-13 relevant to A.Y.2013-14. The assessee was requested to furnish all bank accounts maintained during the year and was requested to explain the sources for credits made along with documentary evidence. However, the assessee failed to furnish the necessary information in spite of several opportunities vide letters/Notices issued from time to time. The sources for the credits in bank accounts remained unexplained. The assessee is engaged in the business of trading in paddy, rice, other bi-products and transport. There are total credits of Rs. 4,09,20,476 during the year and taking into account the nature of business of the assessee and facts of the case, 5% of total credits of Rs. 4,09,20,476 is held as business income of the assessee which comes to Rs. 20,46,024 and the same is added back to the total income of the assessee for the Assessment Year under consideration. Having regard to the addition made, I am satisfied that the assessee is liable for initiation of penalty proceedings w/s 271(1)(c) of the Income Tax Act for under-reporting of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r rights. This principle is embodied in the well-known dictum, "VIGILANTIBUS NON DORMIENTIBUS JURA SUBVENIUNT". Therefore, the undersigned sees no reason to interfere with the orders of the Assessing Officer. Thus, the appeal raised by appellant is dismissed. 6. Further, sec.250(6) expressly embodies such provision, if an assessee fails to appear before the CIT(A) and fails to submit the relevant documents, the CIT(A) is restricted to the disposals of the appeal based on the merits available in the record. 7. This stand was furthered by the High Court in the following Judgements. i) SHREE BALAJI WOOLLEN MILLS vs. ASSISTANT COMMISSIONER OF INCOME TAX ITAT, DELHI 'G' BENCH. ITA. No. 1238 & 1239/Del/2011; Asst. yr. 2005-06 ii) PRAVEEN KUMAR PRUTHI vs. INCOME TAX OFFICER ITAT, DELHI "F BENCH ITA. No. 478/Del/2011; Asst. yr. 1999-2000 iii) ASSISTANT DIRECTOR OF INCOME TAX vs. WHITE INDUSTRIES AUSTRALIA LTD ITAT, BENCH 'C KOLKATA ITA No. 507/Kol/2010; Asst yr. 1992-93 iv) JAI INTERNATIONAL vs. DEPUTY COMMISSIONER OF INCOME TAX ITAT, JODHPUR BENCH, ITA No. 138/id/2018; Asst. yr. 2012-13 v) RAMESH SHARMA vs. ASSISTANT COMMISSIONER OF INCOME TAX ITAT, DELHI 'F& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is a mere re-production of the assessment order and there is no whisper qua the issue on which the assessee had challenged the addition before him. We, say so, for the reason that the assessee vide ground of appeal no. 2, had specifically assailed the validity of the order passed by the AO u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 26.03.2022 on the ground that the copy of the "reasons to believe" were not made available to him. We are unable to comprehend that now when the assessee had assailed the validity of the assessment order, then why the first appellate authority had refrained from calling for the record and adjudicating the same. Although, we deprecate the lackadaisical conduct of the assessee as can be gathered from the orders of the lower authorities, but at the same time cannot remain oblivion of the fact that the CIT(Appeals) while disposing off the appeal for non-prosecution had failed to apply his mind to the issues which did arise from the impugned order and was assailed by the assessee before him. 9. We are unable to persuade ourselves to accept the manner in which the appeal of the assessee has been disposed off by the CIT(Appeals). In our considered vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act." 10. We, thus, not being able to persuade ourselves to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the CIT(Appeals) shall afford a reasonable opportunity of being heard to the assessee in the course of the de-novo appellate proceedings. 11. As we have restored the matter to the file of the CIT(A) for fresh adjudication, therefore, we refrain from dealing with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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