2022 (5) TMI 833 - AT - Income Tax

Reopening of assessment u/s 147 - Unexplained cash deposits - HELD THAT - Assessee has not filed return of income under section 139(1) of the Act. However, based on the AIR, the AO has found cash deposits in the bank account by the assessee, and non-filing of return by the assessee made the AO to invoke section 147 of the Act by issuance of notice under section 148 of the Act. As rightly stated by the ld.DR, we do not find any infirmity in the reason recorded by the AO in the issuance of notice under section 148 of the Act Valid service of 148 notice - The assessee in its written submissions has clearly admitted that assessee had received notice from Income Tax Officer, Ward-2, Patna . Further, copy of the notice produced in the additional documents clearly showed that this notice has been received by the assessee s wife by subscribing her signature as well as cell-phone number. Further, 148-notice was issued on the same address as shown in the Form no.35 and 36 filed by the assessee. Therefore, the assesee s claim that notice remained unserved on him is without any basis, and the same is rejected and the additional ground raised by the assessee, in this regard, are hereby dismissed. Unexplained cash deposits in the bank account - contention of the assessee that two saving bank accounts in HDFC bank did not belong to the assessee is not acceptable. Two accounts found to be jointly held by the assessee and his wife. In response to the summons, the Bank Manager furnished visible photo of the account holder, which prima facie establish that account holder was present at the time of opening of the bank account, and it is crystal clear that the assessee is the same person, who is holding two bank accounts jointly with his wife. Furthermore, even assuming for a moment that SB account does not belong to the assessee, the assessee has not filed any FIR against the so-called forged bank account. Further, in the order-sheet dated 16.12.2015, the assessee s representative has accepted that the bank accounts wherein cash deposited, which are nothing but belongs to the assessee only. Therefore, the contention of the assessee that the bank account are not belongs to him is not proved with proper evidence. Therefore, this ground is also required to be rejected. Assessee appeal dismissed.

Issues Involved:
1. Validity of reassessment under section 147 of the Income Tax Act.
2. Addition of unexplained cash deposits.
3. Enhancement of assessment by the Commissioner of Income-tax (Appeals).
4. Service of notice under section 148.
5. Interest charged under sections 234A, 234B, and 234C.
6. Initiation of penalty under section 271(1)(c).

Issue-wise Detailed Analysis:

1. Validity of Reassessment under Section 147:
The assessee challenged the reassessment on the grounds that it was bad in law. The Tribunal found that the assessee had not filed a return of income for the relevant assessment year, and based on the Annual Information Return (AIR), the Assessing Officer (AO) had reason to believe that income had escaped assessment. The Tribunal upheld the validity of the reassessment, stating that the AO's reasons for reopening the assessment were justified and there was no infirmity in the issuance of the notice under section 148.

2. Addition of Unexplained Cash Deposits:
The AO added Rs. 71,86,890/- as unexplained cash deposits in the assessee's bank accounts. The assessee argued that the bank accounts did not belong to him. The Tribunal, after considering the evidence, including KYC forms and photographs provided by the bank, concluded that the bank accounts indeed belonged to the assessee. The Tribunal upheld the addition made by the AO, stating that the assessee failed to provide any evidence to disprove the ownership of the bank accounts or the source of the cash deposits.

3. Enhancement of Assessment by CIT(A):
The CIT(A) enhanced the assessment by adding Rs. 71,00,000/- as unexplained credits received through cheques. The Tribunal noted that the assessee failed to provide necessary details such as the identity and creditworthiness of the depositors and the genuineness of the transactions. The Tribunal upheld the enhancement made by the CIT(A), stating that the assessee did not discharge the onus of proving the source of the deposits.

4. Service of Notice under Section 148:
The assessee contended that the notice under section 148 was not properly served as it was received by his wife. The Tribunal rejected this argument, noting that the notice was served at the address provided by the assessee in his appeal forms and was received by an adult member of his family. The Tribunal held that the service of notice was valid and in accordance with the law.

5. Interest Charged under Sections 234A, 234B, and 234C:
The Tribunal upheld the interest charged under sections 234A, 234B, and 234C, as the assessee failed to file the return of income and did not respond to the statutory notices issued by the AO.

6. Initiation of Penalty under Section 271(1)(c):
The Tribunal upheld the initiation of penalty proceedings under section 271(1)(c) for concealment of income, as the assessee failed to explain the source of the cash deposits and the credits in the bank accounts.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, upholding the reassessment, the additions made by the AO and CIT(A), the validity of the service of notice under section 148, the interest charged under sections 234A, 234B, and 234C, and the initiation of penalty proceedings under section 271(1)(c). The Tribunal found that the assessee failed to provide any credible evidence to support his claims and did not respond to the statutory notices issued by the AO.

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