Rajpal Yadav, J.M:— The assessee is in appeal before us against the order of Learned CIT (Appeals) dated 29.03.2010 passed for assessment year 2007-2008. The solitary grievance of the assessee is that Learned CIT (Appeals) has erred in confirming the addition of Rs. 14,40,000 and Rs. 9,55,911.
2. The brief facts of the case are that the Assessing Officer had received an information from AIR Wing that assessee had certain transactions in the bank. He had issued notice under sec. 143(2) of the Income-tax Act, 1961. The assessee did not appear before him. He had issued notices under section 271(1)(b) of the Act, for inviting assessee's explanation as to why penalty be not imposed upon him for not attending the proceedings before the Assessing Officer. It emerges out that ultimately the tax-consultant of the assessee Shri SC Jindal appeared before the Assessing Officer. Assessing Officer asked the assessee to explain as to why return of income has not been filed and also explain the cash deposits in the S/B Account with Axis Bank. The assessee submitted that he was carrying civil construction work which was discontinued because of his ill-health. He pointed out that his kidneys have been damaged. The cash was deposited out of this business. According to the Assessing Officer, assessee could not file any explanation exhibiting the source of cash deposited in the bank. He made an addition of Rs. 14,40,000 under section 69 of the Act. Assessing Officer further found a number of transactions in the bank account. These transactions were through account payee cheques. He tabulated all those transactions in the assessment order. According to the assessee, he has purchased and sold shares through broker, namely, Liquidated Investment & Finance Services Ltd. and Madhu Stock Broking Pvt. Ltd. Assessing Officer has observed that assessee failed to give any satisfactory explanation with regard to cheque deposited and cheque withdrawn. He has not filed any reconciliation statement. The peak amount available in these transactions during the year at Rs. 9,55,911 has been added. The assessment order has been passed under sec. 143(3) read with section 144 of the Income-tax Act, 1961.
3. Appeal to the learned CIT (Appeals) did not bring any relief to the assessee.
4. We find that Learned CIT (Appeals) has reproduced the show-cause notice issued by the Assessing Officer and reproduced at page Nos. 2 to 4 of the assessment order. Thereafter, Learned First Appellate Authority has recorded the following findings:—
“7. The A.O has pointed out that the appellant failed to offer any explanation in response to the queries raised. Even during appellate proceedings, the appellant has failed to file any evidence regarding the source from which deposits have been made in his bank account. In view of these facts, the appellant's claim that the deposits were from previous years' saving etc. has remained unsubstantiated. Therefore, the additions made in the assessment order do not call for any interference. In view of the above, the grounds are dismissed”.
5. The learned counsel for the assessee has filed an application for permission to lead additional evidence. He has placed on record copy of the bank statement and a ledger exhibiting the share transactions. He pointed out that both the kidneys of the assessee were damaged. He was not keeping good health and, therefore, could not prosecute the income-tax proceedings properly. His tax-consultant has not guided him properly. He prayed that these documents be taken on record and issue be remitted back to the file of the Assessing Officer for reinvestigation. Learned DR on the other hand submitted that sufficient opportunities were granted by the Assessing Officer as well as by the Learned CIT (Appeals). The assessee failed to submit any such details before the learned revenue authorities. Assessing Officer has asked the assessee to submit papers relating to his ill-health but assessee did not file any such evidence. Thus, there is no evidence on the record which can throw any light about his ill health. He also submitted that assessee has not filed any affidavit. He has filed an application with the Registrar and termed it as an affidavit.
6. We have duly considered the rival contentions and gone through the record carefully. Assessing Officer has asked the assessee to submit requisite details for explaining the source of deposit in the bank as well as cheque transactions exhibiting the dealing in shares. The assessee failed to submit those details. One of his contentions is that his kidneys were damaged and he was not keeping his good health. This contention was raised even before the Assessing Officer. From the record, it reveals that assessee was a negligent in dealing with his income-tax proceedings but we find this negligence at the end of assessee as well as his tax-consultant before the ITO leads to a tax liability on an income of Rs. 23,95,911. Keeping in view the statement made by the learned counsel for the assessee at the bar that he was not keeping good health, we are of the view that the punishment in the shape of tax-liability is disproportionate to the negligence committed by the assessee. He has filed an application for leading additional evidence and placed on record ledger account. Considering these documents, we deem it appropriate that ends of justice would meet if we grant him one more opportunity to explain his case before the Assessing Officer. On account of his negligent conduct, we impose a cost of Rs. 10,000 upon the assessee. The assessee shall deposit a sum of Rs. 10,000 in the government treasury within three months from the receipt of this order and furnish the evidence of payment to the Assessing Officer. If he fails to make such payment then his appeal would be deemed to be dismissed. It is needless to say that the observations made by us will not impair or injure the case of A.O or would not cause any prejudice to the defence/explanation of the assessee. The assessee will be at liberty to furnish any evidence in support of his explanation. Assessing Officer shall grant due opportunity of hearing to the assessee.
7. In the result, the appeal of the assessee is allowed for statistical purposes.