The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication as the deletion of addition under Section 68 of the Income Tax Act 1961 Bharat Auto was based on vague, unsubstantiate and cryptic findings.
Assessee company, Bharat Auto Tech Private Limited filed its return of income for A.Y.2018-19 on 14/10/2018 declaring total income. The return was processed under Section 143(1) of the Income Tax Act and the case was selected for scrutiny under CASS. Notice under Section 143(2) of the Income Tax Act was issued on 22/09/2019 and the same was served on the assessee. In this case, the Assessing Officer noticed that the assessee company had made cash deposits with various banks.
Hence, the Assessing Officer issued various notices/letters to the assessee. Thereafter issued penalty proceeding for failure to comply with notices issued under Section 142(1) dated 24/12/2021 under Section 274 read with Section 272A(1)(d) of Income Tax Act dated 04/02/2021 by the assessee. The Assessing Officer also issued notice under Section 133(6) of Income Tax Act to Axis Bank Ltd and HDFC Bank Ltd on 09/02/2021 however, got no reply from the said banks. As no reply was received from the assessee, show cause notice under Section 144 of the Income Tax Act dated 05/04/2021 was issued.
Finally, as the assessee had not substantiated the source of credits in his bank account with documentary evidence, treated the said amount as undisclosed and unexplained income of the assessee and added it to the total income under Section 68, read with Section 115BBE of the Income Tax Act,1961. Thus, the Assessing Officer completed the assessment under Section 144 read with Section 144B of the Income Tax Act and passed the assessment order on 13.05.2021.
K.C. Devdas, appearing on behalf of the assessee submitted that the Revenue had preferred appeal after a delay which was condoned. On merit, it was submitted that the CIT(A) before deleting the major addition had given background for the same, however, the remand report of the Assessing Officer was self-speaking. He further submitted that based on the remand report, the CIT(A) had deleted the addition. It was submitted that the assessee had filed detailed elaborate evidence in support of deletion of addition before the CIT(A) and based on that, the remand report was called for, which forms the basis of deletion of the addition by the CIT(A).
TH Vijaya Lakshmi, on behalf of the revenue submitted that the Tribunal in the case of assessee for A.Y.2018-19 had remanded back the matter to the file of CIT(A) with a direction to decide the issue afresh pertaining to cash deposits. The Assessing Officer had made an addition and as against the above said amount, the CIT(A) had restricted the addition. The above said issue had been sent back to the CIT(A) for fresh adjudication for the remaining amount.
He further submitted that the order passed by the CIT(A) was cryptic, non-speaking and perfunctory as it was conspicuously not discussing the remand report and not made any comments either agree or disagree with the remand report in his order. It was submitted that the CIT(A) had vaguely and unscrupulously granted the partial relief to the assessee and without any reason had deleted the major additions.
The two-member Bench of R.K. Panda, (Vice President) and Laliet Kumar, (Judicial Member) observed that the CIT(A) had merely given a vague and unsubstantiate and cryptic finding on the issue. No reasons were provided by the CIT(A) for deleting the additions which were the subject matter of the appeal as per the mandate provisions under Section 250(6) of the Income TaxAct.
The appeal filed by the revenue was allowed direct readjudication.
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