2022 (12) TMI 339 - AT - Income Tax

Reopening of assessment u/s 147 - Unexplained investment u/s 69A - income of assessee to the extent of cash deposit has escaped assessment - As argued not allowing reasonable opportunity to the assessee - HELD THAT - The assessee failed to show or substantiate about the alleged denial of reasonable opportunity. Failed to appreciate that despite giving more than reasonable opportunity and fixing the appeal for more than eight times, the assessee is casual in making appearance. Not a single document is filed to substantiate such grounds of appeal or to disclose reasonable cause as to how the sufficient opportunity was not granted or any submission was filed before the ld. CIT(A)/NFAC. Thus, in absence of any submission written or oral, find no merit in the grounds of appeal raised by assessee and dismiss the same. In the result, grounds No. 1 and 2 of the appeal are dismissed. Addition of interest income and addition of cash deposit in the bank account - HELD THAT - We find that the assessee neither before the Assessing officer nor before the First Appellate Authority or before the Tribunal has filed even a single document to substantiate the source of cash deposit or whether interest earned from Punjab National Bank was offered to tax. In absence of any documentary evidence or any submission oral or writing, no reason to deviate from the orders of the lower authorities. Accordingly, grounds No. 3 and 4 of the appeal are dismissed. Period of limitation to issue notice for reopening - A.Y. 2012-13 - HELD THAT - As find that the assessment was re-opened on 27.03.2018. The assessment order was passed on 27.08.2019, thus, the assessment order was passed well in time period prescribed under the Act, i.e. nine months from the end of financial year when notice under section 148 was served. Therefore, no merit on this ground as well, which was dismissed. In the result, all the grounds of appeal raised by the assessee are dismissed. Both these appeals of the assessee are dismissed.

Summary

Issues:
1. Reopening of assessment and addition of income based on cash deposits and interest income.
2. Denial of reasonable opportunity to the assessee.
3. Failure to substantiate source of cash deposits and taxation of interest income.

Analysis:

Issue 1: Reopening of assessment and addition of income based on cash deposits and interest income:
The appellant's appeals were directed against separate orders of the National Faceless Appeal Centre and the Commissioner of Income Tax for the assessment years 2011-12 and 2012-13. The appellant challenged the addition of interest income and unexplained cash deposits. The Assessing Officer reopened the case under Section 147 due to unfiled income tax returns and cash deposits in the bank. Despite multiple opportunities, the appellant failed to provide explanations or evidence regarding the source of cash deposits or the taxation of interest income. The Commissioner upheld the additions, citing lack of information from the appellant. The Tribunal affirmed the lower authorities' decisions, dismissing the appeals due to the appellant's failure to substantiate their claims.

Issue 2: Denial of reasonable opportunity to the assessee:
The appellant contended that they were not afforded a reasonable opportunity to present their case. However, the Tribunal noted that the appellant failed to demonstrate any denial of opportunity despite multiple chances provided. The Tribunal found no merit in the appellant's claims of inadequate opportunity, as no supporting evidence was presented to support this assertion. Consequently, the Tribunal dismissed the grounds related to the denial of a reasonable opportunity.

Issue 3: Failure to substantiate source of cash deposits and taxation of interest income:
The appellant raised grounds challenging the addition of interest income and unexplained cash deposits. However, the appellant did not provide any documentation or submissions to prove the source of the cash deposits or the taxation status of the interest income. The Tribunal emphasized the lack of evidence from the appellant before any authority, leading to the dismissal of these grounds. The Tribunal upheld the additions made by the lower authorities due to the appellant's failure to substantiate their claims. Additionally, the Tribunal dismissed the grounds related to the time period for passing the assessment under section 153(2) of the Income Tax Act, as the assessment was completed within the prescribed timeframe.

In conclusion, the Tribunal dismissed both appeals of the assessee, upholding the additions of interest income and unexplained cash deposits due to the lack of substantiating evidence provided by the appellant throughout the proceedings.