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2022 (10) TMI 761 - AT - Income Tax


Issues Involved:
1. Confirmation of income assessment by CIT(A) despite adjournment request.
2. Prevention from compliance due to COVID-19 and technical issues.
3. Non-acceptance of agricultural income evidence.
4. Non-mentioning of cultivation evidence by CIT(A).
5. Non-application of CBDT Instruction No. 03/2017 for cash deposits during demonetization.
6. Treatment of bank deposits as deemed income under Section 69A and application of Section 115BBE.

Detailed Analysis:

Issue 1: Confirmation of Income Assessment by CIT(A) Despite Adjournment Request
The appellant argued that the CIT(A) erred in confirming the Assessing Officer's (AO) action of assessing the income at Rs. 10,65,000 + 3,00,000, despite the appellant's request for adjournment until June 30, 2022, due to the submission of an adjournment letter on May 30, 2022. The Tribunal noted that the CIT(A) upheld the AO's order without considering the adjournment request.

Issue 2: Prevention from Compliance Due to COVID-19 and Technical Issues
The appellant contended that they were prevented from complying with the requirements due to sufficient and reasonable causes, including COVID-19 and the husband's illness, as well as technical glitches with the new e-portal. The Tribunal acknowledged these reasons but focused on the evidence provided for the cash deposits.

Issue 3: Non-Acceptance of Agricultural Income Evidence
The appellant claimed that the amount deposited in the bank account was from agricultural income, supported by Jamabandi and Girdawari documents. The CIT(A) did not accept this evidence, stating that the appellant only owned 6 acres of agricultural land, not 12.5 acres as claimed, and lacked evidence of crop sales. The Tribunal reviewed the evidence and found that the appellant had provided sufficient documentation to explain the source of cash deposits.

Issue 4: Non-Mentioning of Cultivation Evidence by CIT(A)
The appellant argued that the CIT(A) failed to mention the evidence of land cultivation submitted in the form of Girdawari. The Tribunal found that the appellant had indeed submitted the necessary evidence, which was overlooked by the CIT(A).

Issue 5: Non-Application of CBDT Instruction No. 03/2017 for Cash Deposits During Demonetization
The appellant contended that the CIT(A) did not apply the CBDT Instruction No. 03/2017, which allows individuals to retain cash deposits up to Rs. 2,50,000 during the demonetization period without verification. The Tribunal agreed with the appellant, noting that the instruction was binding on all government officers under the CBDT's charge.

Issue 6: Treatment of Bank Deposits as Deemed Income Under Section 69A and Application of Section 115BBE
The appellant challenged the AO's treatment of Rs. 10,65,000 as deemed income under Section 69A and the application of Section 115BBE for charging tax. The Tribunal referenced the ITAT Chandigarh's decision in Gandhi Ram Vs. PCIT, emphasizing that the applicability of deeming provisions must be clearly established with specific findings. The Tribunal concluded that the AO and CIT(A) did not provide sufficient justification for invoking Section 69A and Section 115BBE.

Conclusion:
The Tribunal allowed the appellant's grounds 1, 3, 4, 5, and 6, quashing the addition of Rs. 10,65,000. The appeal was allowed, and the order was pronounced in the open court on October 12, 2022.

 

 

 

 

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