2024 (10) TMI 1000 - AT - Income Tax

Tribunal Orders Joint Hearing on Rectification & Main Appeals for Fair Adjudication, Ensures Principles of Natural Justice.

Digamber Jain Swadhyay Mandir Trust Soggadh Versus The Dy. CIT, Circle-1, Exmp., Ahmedabad

The Tribunal allowed the Assessee's appeal for statistical purposes, directing that the appeal against the Rectification order under section 154 be ... Rectification u/s 154 - Cash deposits being unexplained to be taxed at 60% u/s 115BBE - CIT(A) erred in not appreciating that invocation of S.115BBE after the assessment order is framed is beyond the scope of Section 154 and therefore he ought to have held it illegal and without jurisdiction - assessee submitted that the Ld. CIT(A) failed to consider that the appeal against the original assessment order passed u/s.143(3) is pending as on today with the E-filing HELD THAT:- Without disposing of the main appeal, Ld. CIT(A) disposed of the present appeal arising out of the rectification order, so the impugned order is liable to be set aside to the file of Ld. NFAC to decide along with the pending appeal. Appeal filed by the Assessee is allowed for statistical purpose. Issues: Delay in filing appeal, Rectification order under section 154 of the Income Tax Act, 1961, Tax liability on unexplained cash deposits, Invocation of Section 115BBE, Invocation of Section 292B, Principles of Natural Justice.Analysis:The appeal was filed against the appellate order dated 16.01.2023 passed by the Commissioner of Income Tax (Appeals) concerning a Rectification order under section 154 of the Income Tax Act, 1961, for the Assessment Year 2016-17. The Assessee sought condonation of a delay of 82 days in filing the appeal, explaining that there was confusion regarding the necessity of a separate appeal against the Rectification order. The delay was condoned based on the explanation provided by the Assessee through a Notarized Affidavit, and the main appeal was taken up for adjudication.The case involved a religious Trust maintaining a Temple, Guest House, and Mess in Gujarat, which had filed its Return of Income declaring Nil income for the Asst. Year 2016-17. The scrutiny assessment was initiated due to unexplained cash deposits in the bank account. The Assessing Officer determined the tax liability on the unexplained cash deposit at 60% under Section 115BBE but initially calculated it at 30% due to an oversight mistake. Subsequently, a show cause notice was issued to levy tax at the correct rate. The Assessee's explanations were not accepted, leading to the revision of the tax demand at 60% under Section 115BBE.The Assessee appealed against the Rectification order, which was dismissed by the Commissioner of Income Tax (Appeals). The Assessee then appealed to the Appellate Tribunal, raising various grounds challenging the Rectification order. The Tribunal, after considering the arguments presented, set aside the appellate order with a direction to decide the appeal along with the main appeal pending before the National Faceless Appeal Centre, ensuring proper opportunity of hearing to the Assessee.The grounds of appeal included contentions regarding the legality of confirming the Rectification order under section 154, the jurisdiction to invoke Section 115BBE post-assessment, the application of Section 292B for curing defects, and alleged breaches of law and Principles of Natural Justice by the lower authorities. The Assessee's representative argued that the appeal against the original assessment order was still pending, and the Rectification order appeal should have been decided along with it. The Revenue supported the lower authorities' orders.Ultimately, the Tribunal allowed the appeal for statistical purposes, emphasizing the need to decide the appeal along with the main appeal pending before the National Faceless Appeal Centre, ensuring a fair opportunity for the Assessee.