2020 (11) TMI 557 - AT - Income Tax

Unexplained term deposit and cash deposit in the bank account - Admission of additional evidence - HELD THAT - From bank account of the assessee it is clear that prior to the term deposit and cash deposit the assessee has made various withdrawals which is around ₹ 5,00,000/-.Considering this withdrawal of the assessee from the bank account about ₹ 5,00,000/- and further, a sum of ₹ 5,00,000/- received under the development agreement out of which ₹ 2,49,000/- received in cash prima facie support the case of the assessee. These two documents being a registered agreement and bank account are beyond the scope of any manipulation by the assessee and details of the bank account was very much available with the AO being the basis of this addition - Assessee has also filed an affidavit to explain the reasons for source as well as not furnishing the documentary evidence before the authority below. From documents filed by the assessee as additional evidence we find that though the assessee could not produce these documents before the authorities below however, these documents were very much in existence at the time of assessment and there is no scope of any manipulation - we admit the additional evidence filed by the assessee and set aside the matter to the record of the AO to adjudicate the same afresh after verification and examination of the additional evidence filed by the assessee as well as giving an opportunity of hearing to the assessee - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Validity of reopening of assessment
2. Ex-parte impugned order by CIT(A) and condonation of delay in filing the appeal
3. Addition of unexplained income by AO and CIT(A)
4. Charging of interest under sections 234A, 234B, and 234C

Issue 1: Validity of reopening of assessment
The appeal challenged the order of the ld. CIT(A) for the assessment year 2011-12. The assessee raised concerns about the action taken under section 147 r/w 148, claiming it to be without jurisdiction and void-ab-initio. However, during the hearing, the assessee did not press this ground, leading to its dismissal.

Issue 2: Ex-parte impugned order and condonation of delay
Grounds 2 and 3 of the appeal addressed the ex-parte order by the ld. CIT(A) and the condonation of a 20-day delay in filing the appeal. The assessee, a 72-year-old widow, cited difficulties in submitting relevant documents due to age and living circumstances. The AR argued for condonation based on a development agreement and bank statements supporting the source of income. The ld. CIT(A) initially dismissed the appeal due to the delay but later acknowledged the genuine reasons, condoning the delay and admitting additional evidence.

Issue 3: Addition of unexplained income
The AO had made additions totaling ?9,05,000 on account of unexplained income from time deposits and cash deposits. The ld. CIT(A) upheld these additions. The AR presented a development agreement and bank statements to explain the sources of income, which were not initially submitted but were found to be genuine and relevant. The Tribunal admitted the additional evidence and set aside the matter for fresh adjudication by the AO.

Issue 4: Charging of interest under sections 234A, 234B, and 234C
The appeal contested the charging of interest under sections 234A, 234B, and 234C, denying liability. The Tribunal did not specifically address this issue in the detailed analysis but mentioned that the appeal was allowed for statistical purposes, indicating a favorable decision for the assessee without specific mention of interest charges.

In conclusion, the Tribunal allowed the appeal for statistical purposes, primarily focusing on the validity of reopening the assessment, condonation of delay, and the addition of unexplained income. The decision highlighted the importance of genuine reasons for delay, admission of additional evidence, and the need for a fresh examination by the AO based on the new evidence presented.