2023 (8) TMI 220 - AT - Income Tax

Addition of cash deposits in bank account u/s 69A - HELD THAT - Assessee has filed copy of bank statement of the bank account on the basis of which the impugned addition has been made. From the bank account statement it is transpired that the assessee had deposited in cash and there were withdrawals out of the cash deposits. There were substantial withdrawals and deposits, the lower authorities have not given set off of the cash withdrawals made by the assessee at different intervals, find that there were cash withdrawals as well before making deposits. Therefore, it can be assumed that the deposits were also from the withdrawals made by the assessee on earlier occasions. Hence, it would be fair and reasonable to restrict the addition made by the authorities below to the extent of 20%. Decided partly in favour of assessee.

Summary

Issues Involved:
The issues involved in the judgment are the addition made by the Assessing Officer under section 144/147, denial of opportunity to be heard, and condonation of delay in filing the appeal before the Tribunal.

Addition Made by Assessing Officer u/s 144/147:
The appeal was filed against the order of the Commissioner of Income-tax (Appeals) upholding the addition of Rs. 11,89,500 made by the Assessing Officer under section 144/147. The appellant contended that the impugned reasons provided by the AO for using Section 69A were reasons to suspect, not reasons to believe, which is impermissible in the eyes of the law. The appellant denied liability to be assessed on an income of Rs. 13,88,150, as against the total income of Rs. 1,98,650 returned by her. The appellant raised objections to being assessed under section 144 r.w.s. 147, stating that mandatory conditions for assumption of jurisdiction under section 144 of the Act were not complied with. The appellant argued that she did not have a real opportunity to be heard before any of the Assessment/Appellate authorities.

Denial of Opportunity to be Heard:
The appellant denied having a real opportunity of being heard before any of the Assessment/Appellate authorities. Despite filing a written submission during the appellate proceedings, the appellant failed to provide evidence or material on record to prove the source of cash deposits. The assessing authority and the Commissioner of Income-tax (Appeals) upheld the addition as the appellant did not substantiate her claims with evidence. The appellant's failure to attend the assessment proceedings and lack of evidence led to the denial of the appeal.

Condonation of Delay in Filing Appeal:
The appellant filed an application for condonation of delay in filing the appeal before the Tribunal, which was granted after considering the averments made in the application. The delay was condoned, and the appeal was taken up for hearing. The Tribunal, after hearing the arguments, partially allowed the appeal by restricting the addition made by the lower authorities to 20% of the originally assessed amount. The appellant received partial relief based on the totality of facts presented.