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TMI Blog2025 (1) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... de para 5 that the income of the assessee is assessed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961. It is prayed that the assessment order may kindly be declared to be illegal and quashed. 2. On the facts and in the circumstances of the case and in law, the Assessment order passed is illegal, bad-in-law and void-ab- initio inasmuch as the assessment proceedings were culminated from notice issued u/s 148 of the Income Tax Act, 1961 dated 30.03.2022 which ought to have been issued by "Faceless Assessing Officer" was in fact issued by "Jurisdictional Assessing Officer" which is violative of and contrary to Notification No. 18/2022 dated 29.03.2022, therefore, it is prayed that the assessment order may kindly be declared to be illegal and quashed. 3. On the facts and in the circumstances of the case, the Learned A.O. has erred on facts and in law in making addition of Rs. 1,01,59,420/- by invoking section 69A of the Income Tax Act, 1961 inasmuch as the conditions precedent for invoking Section 69A are not fulfilled inasmuch as the assessee was not the owner of money aggregating to Rs. 1,01,59,420/- as the assessee is merely a sub-dealer and sum of Rs. 1,01,59,420/- represented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich reads as under: "Additional Ground of appeal No.1. On the facts and in the circumstances of the case, the assessment order passed u/s 144B r.w.s. 144 is illegal, bad-in- law and void-ab-initio inasmuch as the Standard Operating Procedure laid down by the National Faceless Assessment Centre vide file No NaF AC/Delhi CIT- 1/2022-23/112/92 dated 03.08.2022 has not been adhered to as no physical letter at the latest address of the assessee was sent through speed post where the assessee was not responsive as mandated vide Para No. 0.3 on page here of the said Standard Operating Procedures, therefore, the passing of assessment order in disregard to the Standard Operating Procedure renders the assessment order illegal and unsustainable particularly in view of the decision of the Hon'ble Jurisdictional High Court of Chhattisgarh in the case of Deputy Commissioner of Income Tax Vs. Sunita Finlease Ltd. reported in(2011) 330 ITR 491 (Chhattisgarh). It is prayed that the assessment order passed in violation of Standard Operating Procedure laid down by NFAC may kindly be declared as bad-in-law and illegal and consequential enhancement of Rs. 1,02,58,244/- made to the total income ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rame the assessment to the best of his judgment u/s 144 of the Act. The A.O., observed that though the assessee firm had income from multi facet sources, viz., (i) income that had sourced the cash deposits in its bank account with ICICI Bank : Rs. 1,01,59,420/-; and (ii) income received from M/s Bharti Axa General Insurance Company Limited (TAN: BLRB06855C) : 98,824/-, but it had failed to file its return of income. Accordingly, the AO made an addition of both aforementioned amounts, viz., (i) addition u/s 69A of the Act of the unexplained cash deposits in the bank account: Rs. 1,01,59,420/-; and (ii) contract receipts from M/s Bharti Axa General Insurance Company Limited: 98,824/-, and determined the income of the assessee vide his order passed u/s 147 r.w.s. 144B of the Act, dated 03.03.2023 at Rs. 1,02,58,244/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and adjudicate the issues as were raised by the assessee before him vide an ex-parte order. The CIT(A) finding no infirmity in the view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant did not want to adduce evidence as it would expose falsity and non-genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/2011 dated 19.12.2011) has dismissed the appeal for non- attending hearing inferring that the appellant is not effectively pursuing the appeal. 5.2 In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipol vs Union of India, Central Excise Appeal No.62 of 2009 may further be referred to wherein the Hon'ble Court clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, inherently possesses the power to dismiss the case when the appellant does not wish to prosecute the proceedings. Relevant extract of the decision rendered by Hon'ble High Court at Mumbai in the said case is extracted below: "(i) -------------------------------------------------- (ii) While not inclined to depart from the view taken by the two High Courts, reference must be made to Sunderlal vs. Nandramdas AIR 1958 MP 260, where it was observed that though the act does not give any power of dismissal, it is axiomatic that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.1: The ground of appeal is general in nature and therefore requires no adjudication. 6.2 Findings regarding grounds of appeal no.2: From the perusal of the materials available on record and the Assessment Order, I find that the appellant has submitted no explanation/documentary evidences as to how the AO has erred in making the additions. No evidence has been furnished to contravene the findings of the Assessing Officer during appellate proceedings. The onus was on the appellant to explain the cash deposited of Rs. 1,01,59,420/- in its current account in ICICI Bank Limited before the Assessing Officer, which he has failed to do so. Several opportunities at various stages have been provided to the appellant as has been discussed in Para 2 of the assessment order, in response to which the appellant has filed no replies. When the assessee failed to explain the source of the cash deposits in his own bank account to the satisfaction of the Assessing Officer, then it was open to the AO to hold it as income of the appellant. This view is supported by numerous judicial pronouncements In the case of Roshan di Hatti vs CIT (SC) 107 ITR 938 and Kale khan Mohammed Hanif (SC) vs CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach and individual entry on which the mind has to be applied by the taxing authority when an explanation is offered by the assessee. The Calcutta High Court in the case of C. Kant & Co. v. CIT [1980] 126 ITR 63 (Cal.) held that in the case of cash credit entry it is necessary for the assessee to prove not only the identity of the creditors but also to prove the capacity of the creditors to advance the money and the genuineness of the transactions. In view of the above discussion in Para 4,5 and 6, it is clear that the appellant has submitted no documentary evidences to establish as to how the AO has erred in making the additions. No evidence has been furnished to contravene or repudiate the findings of the Assessing Officer during appellate proceedings also. The appellant has further also not submitted any documentary evidences to substantiate the grounds which the appellant has taken in the grounds of appeal. Therefore, in view of the above-mentioned facts and discussions made in Para 4, 5 and 6, I find no reason to interfere with the order of the Assessing Officer. In view of these, the ground of appeal no.2 raised by the Appellant are dismissed. 6.3 Findings regarding gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice, being not less than seven days and but not exceeding thirty days from the date on which such notices is issued, or such time, as may be extended by him on the basis of application in this behalf, as to why a notice u/s 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a). The Ld. AR submitted that the AO in the present case had issued "Show cause notice" (SCN) u/s 148A(b) of the Act, dated 20.03.2022, Page No. 1 & 2 of APB, wherein the assessee firm was called upon to put forth an explanation on or before 26.03.2022 as to why the notice u/s 148 of the Act be not issued to him. The Ld. AR, submitted that contrary to the mandate of section 148A(b) of the Act, which contemplates allowing of a time period of not less than seven days, the A.O. in the case of present assessee had effectively allowed to him a time period of only 5 days to explain that as to why the notice be not issued under clause (b) of section 148A of the Act. The Ld. AR, submitted that as the time period allowed to the assessee firm for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a). Admittedly, as per the mandate of Section 148A(b) of the Act, it is obligatory on the part of the A.O. to allow to the assessee a time period of not less than 7 days from the date on which such notice is issued to explain as to why based on the information shared with him a notice u/s 148 of the Act be not issued to him. However, we find, that in the present case, the A.O vide notice u/s 148A(b) of the Act, dated 20.03.2022 by calling upon the assessee firm to show cause on or before 26.03.2022 that as to why notice u/s 148 of the Act be not issued to him had effectively allowed to him a time period of only 5 days to file his explanation. 12. As stated by the Ld. AR, and rightly so, the notice u/s 148A(b) of the Act, dated 20.03.2022 is not found to be in conformity with the mandate of law. We find, that Hon'ble Jurisdictional High Court of Chhattisgarh in the case of MM Wonder Park Private Limited vs. Union of India & Others, passed in Writ Petition (T) No.172 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as was there before the Hon'ble High Court, therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations quash the order passed by the A.O. u/s 148A(d) of the Act, dated 29.03.2022 and also notice u/s 148 of the Act, dated 29.03.2022, and restore the matter back to the file of the A.O. with a direction to afford a proper opportunity of being heard to the assessee firm as per the mandate of section 148A(b) of the Act, and thereafter, decide the matter afresh in accordance with law. 14. The additional ground of appeal No. 2 is allowed for statistical purposes in terms of our aforesaid observations. 15. As we have set aside the matter to the file of the A.O. with a direction to re- decide the case after affording a reasonable opportunity of hearing to the assessee, therefore, we refrain from dealing with the other grounds of appeal based on which the validity of jurisdiction assumed by the A.O. for framing the assessment as well as the merits of the addition has been assailed by the Ld. A.R before us, which, thus, are left open. 16. The grounds of appeal No. 1 to 6 along with the additional ground of appeal No.1, are disposed of in terms of our af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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