Appeal allowed as assessee was illiterate, did not get good legal advice on proper grounds

Appeal allowed as assessee was illiterate, did not get good legal advice. Even proper and appropriate grounds could not be raised before CIT(A)

ABCAUS Case Law Citation:
ABCAUS 3253 (2020) (02) ITAT

In the instant case, appeal was filed by the assessee against the order of the CIT(A) in upholding the addition for cash deposits in bank u/s 69 of the Income Tax Act, 1961 (the Act) and not giving claim for deduction u/s 80C against investment in ULIP.

The assessee was engaged in the trading business of Kirana items. The assessee was asked to explain cash deposits in his bank account.

The assessee submitted that he was trading in Kiryana items and has income from sale of agricultural produce along with milk and Ghee and there are some cash receipts from his real brother.

Before the CIT(A), the assessee stated that he was an illiterate person and a farmer and running of Kiryana shop in own house and had no knowledge to keep bills for the purchase/sale of Kiryana items for which he made payments in cash.

He also stated that during the year, a Canteen holder who was supplying foods in the factories for Labour had join with him to purchase Kiryana items and he had made the payment through cheque on various intervals of time.

According to the assessee, to supply the Kiryana items to the said canteen holder, he required Cash for the purchase of Kiryana items, as he was not able to procure goods on credit.

He explained that in view of the opportunity to increase the business by supply Kiryana items to Canteen Holder, the assesee took cash from his brother to purchase and when the Canteen holder gave him the cheque he withdrew it from the bank and paid it to his brother at various intervals of time.

Apart from that the assessee had taken a ULIP from Insurance Company for which deduction u/s 80C was claimed.

Considering the submission of the assessee, part relief was granted by the CIT(A) on account of withdrawals from bank account. However, the addition was sustained in part for lack of evidence.

Before the Tribunal, the Revenue pointed out that before the CIT(A), no specific ground qua 80C deduction was raised by the assessee.

The Tribunal observed that however the CIT(A) in his order had mentioned that the assessee had submitted that under Chapter VI-A regarding deduction u/s 80C for ULIP cheque payments had been debited in his account.

On a consideration of the material available on record, the Tribunal opined that the assessee claimed to be illiterate and the fact that he did not have the best of legal advice available, was glaring on the record as even proper and appropriate grounds could not be raised.

The Tribunal stated that the aim of the statute is to collect just and due taxes for the State and not encash the ignorance of the tax payers.

The Tribunal found that the representation of the assessee before the CIT(A) was not proper.

Accordingly, the issues were set aside to the file of CIT(A) with the direction to decide the same afresh in accordance with law by way of speaking order after giving the assessee a proper opportunity of being heard.

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