Uttarakhand High Court
2) In Terms Of The Order Dated ... vs 9.2014 on 17 April, 2023
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
THE HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI
AND
THE HON'BLE SRI JUSTICE ALOK KUMAR VERMA
INCOME TAX APPEAL NO. 07 OF 2022
17th APRIL, 2023
Between:
Meetu Bansal ...... Appellant
and
Deputy Commissioner of Income
Tax, Central Circle, Dehradun ...... Respondent
Counsel for the appellant : Mr. Pulak Raj Mullick, learned counsel
Counsel for the respondent : Mr. Hari Mohan Bhatia, learned Standing
Counsel for the respondent / Revenue
The Court made the following:
JUDGMENT: (per Hon'ble The Chief Justice Sri Vipin Sanghi)
Delay Condonation Application (IA No. 2 of 2022)
In view of the fact that the delay in preferring the
present appeal is only 38 days, and since Mr. Bhatia fairly
does not oppose the delay condonation application, the same
is allowed for the reasons given in the application. The
delay, accordingly, stands condoned.
Income Tax Appeal No. 07 of 2022
2) In terms of the order dated 20.05.2022, Mr.
Bhatia has produced the scanned copy of the record. We
have perused the same.
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3) The appellant / assessee has preferred the present
appeal against the order dated 21.09.2021, passed by the
learned Income Tax Appellate Tribunal, in ITA No.
3943/Del/2016: AY 2007-08, Meetu Bansal Vs DCIT, Central
Circle, Dehradun, dismissing the appeal preferred by the
appellant / assessee against the order dated 11.03.2016,
passed by the learned CIT (Appeals), in Appeal No.
343/CIT(A)-1/DDN/14-15, relating to the Assessment Year
2007-08.
4) We have heard learned counsels, and we are of
the opinion, that the following substantial questions of law
arises for our consideration :-
"a) Whether on the facts and circumstances of the case
an in law, the Ld. ITAT committed a manifest error
of judgment, in not appreciating that the Ld. CIT
(Appeals), could not enhance the original
assessment, without issuing a show cause notice /
opportunity of hearing, as mandated u/s 251(2) of
the Income Tax Act, 1961?
b) Whether on the facts and circumstances of the case,
the final Appellate order dated 21.09.2021, passed
by the Ld. ITAT, is perverse (i.e. the assessment
order u/s 153A dated 01.09.2014 and the appellate
order dated 11.03.2016, had merged in the final
appellate order dated 21.09.2021); in upholding
that additions u/s 68 made by the Ld. A.O. and the
enhancement of income additions made by the CIT
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(Appeals); without prior show cause notice /
opportunity of hearing; which both orders were
devoid of any incriminating document / informations
and as such the revenue had failed to discharge
their burden, which squarely fell on their shoulders?"
5) The appellant is engaged in private coaching and
vocational training profession. In the Assessment Year
2007-08, the appellant earned income from business
(profession) and other sources. She filed her income-tax
return for the Assessment Year 2007-08, on 18.03.2008,
declaring an income of Rs.1,18,500/-, earned from private
coaching and vocational training from her residence. Since
the income shown was below Rs. 1.20 lacs, she claimed that
she was not required to maintain books of account. She
declared cash held in business of Rs.1,100/- in column 6,
Part-A of the balance sheet.
6) The Income Tax Department carried out search
and seizure operation on 26.04.2012, in respect of the
appellant's husband, including the residential premises of the
appellant. Notice was issued to the appellant under Section
153A of the Income Tax Act. In response to the said notice,
she submitted her return of income declaring Rs. 1,19,475/-,
which included an income of Rs. 1,18,500/-, earlier declared
by her in her return, i.e., ITR-4, for the Assessment Year
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2007-08. An additional of Rs.975/- was made towards
income from interest earned on savings bank account, which
had earlier not been included in the returned income.
7) Notices were issued to the appellant / assessee
under Section 153A read with Section 143(3) and Section
142(1) of the Income Tax Act. The appellant filed the return
under Section 156A, along with an income statement /
balance sheet, on 31.03.2007. The Assessing Officer, while
accepting the declared income of the appellant, made
addition to the tune of Rs.5,63,500/- by adding: (a) a sum
of Rs. 1.5 lacs, which was the gift received by the assessee
from her father, by treating the same as income under
Section 56(2)(vii), and; (b) difference in cash aggregating to
Rs. 4,13,500/- by considering the same as cash credit under
Section 68. The learned Assessing Officer made addition of
Rs.4,13,500/- by considering the same to be unexplained
cash, credited in the books of account. The grievance of the
appellant is that the same was done without show cause
notice to the assessee, and additions were made under
Section 68 to the tune of Rs.4,13,500/- without any
opportunity to the assessee. Consequently, penalty
proceedings were also initiated with the issuance of notice
under Section 271(1)(c).
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8) The Assessing Officer passed the assessment
order under Section 153A(1)(b) read with Section 143(3) on
01.09.2014. The assessee filed an appeal under Section 249
of the Income Tax Act against the assessment order dated
01.09.2014, before the Commission of Income Tax
(Appeals), Dehradun. He deleted the addition of
Rs.1,50,000/-, being gift received from father, i.e., blood
relative. However, so far as the addition under Section 68 of
the Income Tax Act was concerned, i.e. the net cash in hand
of Rs. 4,13,000/- (Rs.4,66,500 minus Rs. 53,050/-) credited
in the books of the assessee, the Commissioner of Appeals
enlarged the scope of assessment by enhancing the cash in
hand from Rs. 4,13,500/- to Rs. 4,66,500/-, i.e. by adding
the original cash in hand, which was declared in return
furnished under Section 139, without issuing any show cause
notice as mandated under Section 251(2) of the Income Tax
Act. The further appeal to the ITAT failed, and,
consequently, the present appeal has been preferred by the
appellant / assessee.
9) On 20.05.2022, this Court passed an order, the
relevant extract whereof reads as follows:
"Having heard the learned counsel appearing for the
parties, we are of the opinion that prima facie, there has
been a violation of Sub-section (2) of Section 251 of the
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Income Tax Act 1961, as the impugned order does not
reflect it was enhancing the assessment of the appellant
and opportunity was granted to her show cause.
The learned counsel for the revenue, however,
submits that it can only be known from the records and he
is willing to produce the scanned copy of the records of the
learned C.I.T. (Appeals) in appeal No. 343/CIT(A)-
1/DDN/14-15 on the next date.
Let the learned counsel for the revenue to produce the
scanned copy of the records only to satisfy us that a proper
notice to show cause has been given to the appellant."
10) In response to the said order, the scanned record
has been produced by Mr. Bhatia. He fairly states that show
cause notice was not issued to the assessee by the
Commissioner (Appeals), as mandated by Section 251(2) of
the Income Tax Act, before enhancing the cash in hand from
Rs. 4,13,500/- to Rs. 4,66,500/-.
11) We have heard learned counsels.
12) We find merit in the submission of Mr. Mullick that
the appellant / assessee was entitled to put to notice before
enhancing the cash in hand, by the Commissioner (Appeals).
13) We, accordingly, answer the first question in
favour of the assessee, and against the Revenue. The
matter is remanded to the Commissioner (Appeals) for
rehearing of the appeal on the aforesaid issue.
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14) So far as the second question framed aforesaid is
concerned, we do not have the relevant factual position
before us. It appears that when the matter was argued on
20.05.2022, the only issue raised by the appellant was with
regard to violation of Sub-section (2) of Section 251 of the
Income Tax Act. Mr. Bhatia submits that the respondents
were not required to produce the record of the Assessing
Officer.
15) Aforesaid being the position, we leave the second
question of law, as framed, open. Since, the matter is being
remanded back to the Commissioner (Appeals), it shall be
open to the assessee to urge the said issue as well before
the Commissioner (Appeals).
16) The appeal stands disposed of in the aforesaid
terms.
_________________
VIPIN SANGHI, C.J.
_________________
ALOK KUMAR VERMA, J.
Dt: 17th APRIL, 2023
Negi
