2024 (3) TMI 95 - AT - Income Tax

Revision u/s 263 - unexplained cash deposits - onus to prove - HELD THAT - AO has simply accepted the explanation of the assessee without bringing any evidence on record to prove that the entire cash deposits were out of the business receipts as explained by the assessee s son. As apparent from the return of income filed by the assessee, the assessee has disclosed turnover and admitted total income @ 8% of the turnover. It is also noticed from the order of the Ld. Pr. CIT that though the assessee claimed that the assessee had received cash from various parties towards sale proceeds of Tomotos and deposited the cash in the bank account, the assessee did not produce any details of purchasers of Tomotos and transactions made with them. The onus is on the assessee to prove the genuineness of source for cash deposits along with the documentary evidence. It is also apparent from the order of the Ld. AO that the Ld. AO had not thoroughly examined the above details nor obtained the relevant details / information / evidence from the assessee before accepting the explanation of assessee's son as well as the claim made by the assessee. We also observed that even before the revisionary proceedings, the assessee did not furnish any documentary evidence in support of his claim. Under these circumstances, we find merit in the observation of the Ld. Pr. CIT that the Ld. AO has passed the assessment order without making inquiries or verification which should have been done when the case is selected for scrutiny on the issue. CIT has rightly invoked the provisions of section 263 and thereby setting aside the assessment order passed by the AO with a direction to re-do the assessment in accordance with law after making all enquiries and verification of the issues mentioned in his order passed U/s. 263 of the Act after providing a reasonable opportunity of being heard to the assessee. Accordingly, we hereby sustain the order passed by the Ld. Pr. CIT. Decided against assessee.

Summary

Issues:
The issues involved in this judgment are the condonation of delay in filing the appeal before the Tribunal and the validity of the order passed by the Ld. Pr. CIT U/s. 263 of the Act.

Condonation of Delay:
The appeal filed by the assessee was delayed by 337 days, and the assessee provided a detailed explanation for the delay, stating that she was not aware of the appealable nature of the order passed U/s. 263 of the Act. The Tribunal found the cause presented by the assessee to be reasonable and sufficient, thus condoning the delay and proceeding to adjudicate the appeal on merits.

Validity of Order U/s. 263 of the Act:
The case involved an individual engaged in the business of perishable vegetables, specifically tomatoes on a commission basis. The Ld. Pr. CIT, after examining the assessment record, found the assessment order passed by the Ld. AO to be erroneous and prejudicial to the interests of the Revenue. The Ld. Pr. CIT directed the Ld. AO to re-do the assessment after making necessary inquiries and verifications. The assessee challenged this order on various grounds, arguing that the Ld. AO's order was not erroneous and that the assessment order itself was invalid due to being in the name of a deceased person.

The Ld. AR contended that the Ld. Pr. CIT's order was not in accordance with the law, as the Ld. AO had considered and verified the submissions and evidences provided by the Legal Representative of the assessee. However, the Ld. Pr. CIT found discrepancies in the information provided by the assessee and concluded that the Ld. AO had not thoroughly examined the details before accepting the explanations. The Ld. DR supported the decision of the Ld. Pr. CIT, emphasizing the lack of evidence to support the cash deposits claimed by the assessee.

After hearing both sides and examining the material, the Tribunal upheld the decision of the Ld. Pr. CIT, stating that the Ld. AO had failed to conduct proper inquiries and verifications before accepting the explanations provided. The Tribunal also noted that the assessment order being in the name of a deceased person did not invalidate the proceedings, citing a relevant Supreme Court decision. Therefore, the Tribunal dismissed all grounds raised by the assessee and upheld the order passed by the Ld. Pr. CIT.

In conclusion, the appeal of the assessee was dismissed by the Tribunal, and the decision was pronounced in open court on 28th February 2024.