2021 (2) TMI 60 - AT - Income Tax

Rectification of mistake - Reopening of assessment - unexplained cash deposited in the saving bank account maintained with the ICICI Bank - before the ld. CIT(A) the assessee has completely changed the facts of her own claim made before the Assessing Officer stating that the said bank account in the ICICI bank was not opened by her and it was opened by a travel agent and all the transactions with the bank were also made by him - HELD THAT - ITAT highest fact finding authority after verification of the paper book filed by the assessee had noticed that assessee has declared and owned up the said saving bank account in the return of income filed by her. The assessee has failed to produce any material to substantiate her contradictory claim made before the ld. CIT(A). Further the altogether different claim made before the ld. CIT(A) that the bank account was not belonged to her found to be false claim. Considering these specific facts which are distinguishable from the cases referred by the assessee, the ITAT has not found any infirmity in the decision of ld. CIT(A). ITAT confirmed that assessee has herself reported under her signature in her income tax return filed after replying the notices from the assessing officer that the impugned bank account with the ICICI Bank was pertained to her. In the light of the above facts and circumstances, we consider that the assessee has failed to substantiate the source of cash deposit detected in the saving bank account, It was a very long adjudicated order passed after taking into consideration actual facts distinguishable from the facts in the case laws referred by the assessee. Keeping in view the above facts and circumstances, we consider that the power of rectification u/s. 254(2) of the Act can be exercised only when the mistake which is subject to be rectified is an obvious patent mistake, which is apparent from record and not a mistake which is required to be established by argument and long drawn process of reasoning on points on which there may conceivably be two opinion. In the light of facts and circumstances, we do not find any merit in the Miscellaneous Application of the assessee and the same is dismissed.

Summary

Issues involved:
1. Re-assessment proceedings based on non-filing of income tax return within the prescribed time.
2. Claim of cash deposits in a saving bank account being business receipts.
3. Discrepancies in the claims made by the assessee regarding ownership of the bank account.
4. Failure to substantiate the source of cash deposits.
5. Validity of the decision of the ld. CIT(A) in upholding the reopening of assessment.
6. Application of rectification under section 254(2) of the Act.

Issue 1: Re-assessment proceedings based on non-filing of income tax return within the prescribed time:
The assessee filed a Miscellaneous Application challenging the ITAT order dated 28th Jan, 2020, arguing that judicial decisions were not considered during the appeal. The Assessing Officer issued notices regarding non-filing of income tax return within the time limit. Despite specific information on cash deposits in the bank account, the assessee failed to respond to notices and provide supporting evidence. The ITAT upheld the reopening of assessment, stating that the assessee did not comply with the notices and failed to substantiate claims.

Issue 2: Claim of cash deposits in a saving bank account being business receipts:
The assessee claimed that cash deposits in the bank account were from the business of trading in iron and steel. However, the Assessing Officer found inconsistencies in the provided ledger account and lack of substantiating evidence. The assessee later changed the claim before the ld. CIT(A), stating that the bank account was not owned by her. Despite contradictory claims, the ITAT confirmed that the bank account belonged to the assessee based on evidence and dismissed the appeal.

Issue 3: Discrepancies in the claims made by the assessee regarding ownership of the bank account:
The assessee initially claimed the bank account was related to her business transactions but later denied ownership, attributing it to a travel agent. However, the ITAT found that the assessee had declared and owned up the bank account in the income tax return, contradicting her later claims. The ITAT dismissed the appeal due to the lack of substantiating evidence for the new claim.

Issue 4: Failure to substantiate the source of cash deposits:
The Assessing Officer established that the assessee could not substantiate the source of cash deposits in the bank account with relevant supporting evidence. Despite attempts to link the cash to business transactions, the assessee failed to provide conclusive evidence, leading to the dismissal of the appeal by the ITAT.

Issue 5: Validity of the decision of the ld. CIT(A) in upholding the reopening of assessment:
The ITAT found no infirmity in the decision of the ld. CIT(A) in justifying the action of the Assessing Officer in reopening the assessment. The ITAT upheld the reopening based on the assessee's non-compliance with notices and failure to substantiate claims, distinguishing the case from previous references.

Issue 6: Application of rectification under section 254(2) of the Act:
The ITAT concluded that rectification under section 254(2) could only be exercised for obvious patent mistakes apparent from the record, not requiring lengthy reasoning. In this case, the ITAT found no merit in the Miscellaneous Application of the assessee and dismissed it based on the facts and circumstances presented.

This comprehensive analysis of the judgment highlights the key issues addressed, the arguments presented, and the final decisions made by the ITAT in the context of the legal proceedings.