2017 (1) TMI 850 - AT - Income Tax

Addition as unexplained deposit in the savings bank account - Assessment Order u/s.144 - agricultural income - Held that - On the basis of AIR information notice u/s.142(1) was issued to the assessee. However there was noncompliance for which the Assessing Officer issued another notice calling for certain details. Still there was no compliance for which the Assessing Officer passed the order u/s. 144 making addition of 14 lakhs as unexplained deposit in the savings bank account. The Assessing Officer has also did not allow the basic exemption limit while completing the assessment u/s.144 of the I.T. Act. Thus find in appeal in absence of any satisfactory explanation given by the assessee regarding the source of deposit the CIT(A) upheld the addition made by the Assessing Officer. It is the submission of the assessee that the entire deposit of 14 lakhs in the bank account is out of agricultural income of the family of the assessee which has been deposited in her bank account. It is also the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to explain the source of deposit of 14 lakhs. Considering the totality of the facts of the case and in the interest of justice I deem it proper to restore the matter back to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate her case. - Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
1. Assessment barred by limitation
2. Violation of principles of natural justice in exparte assessment
3. Addition of cash deposits in bank account
4. Levy of interest u/s 234A, 234B, and 234C

Assessment Barred by Limitation:
The appellant contended that the assessment was not finalized by the last day of the limitation period and argued that it was handed over to the Postal Authority after the deadline. However, the appellant did not press this ground during the proceedings, and it was dismissed as "not pressed."

Violation of Principles of Natural Justice in Exparte Assessment:
The appellant challenged the exparte assessment completed by the Assessing Officer under Section 144 of the Act, alleging a violation of natural justice principles. Despite the appellant's arguments, the CIT(A) confirmed the assessment. The Tribunal dismissed this ground as "not pressed" since the appellant did not pursue it during the proceedings.

Addition of Cash Deposits in Bank Account:
The Assessing Officer made an addition of ?14 lakhs as unexplained investment based on cash deposits in the appellant's savings bank account, sourced from agricultural income. The CIT(A) upheld this addition, leading to the appellant's appeal before the Tribunal. The appellant argued that the entire deposit was from agricultural income, but failed to provide satisfactory evidence to support this claim. The Tribunal decided to give the appellant another opportunity to substantiate the source of the deposit and directed the Assessing Officer to reevaluate the case after considering the evidence provided by the appellant.

Levy of Interest u/s 234A, 234B, and 234C:
The appellant disputed the levy of interest under Sections 234A, 234B, and 234C. The Tribunal, after hearing both sides, concluded that the levy of interest under these sections is mandatory and consequential, dismissing the appellant's argument. The Tribunal also dismissed a general ground of appeal. Consequently, the appeal was partly allowed for statistical purposes, with the order pronounced on 09-11-2016.

This detailed analysis covers the issues raised in the judgment, outlining the arguments presented by both parties and the Tribunal's decisions on each matter.