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2024 (11) TMI 863 - AT - Income TaxUndisclosed investments u/s 69 and undisclosed investment in purchase of agriculture land - no explanation regarding the source of this investment provided - HELD THAT - Firstly, it may be mentioned that payment of the sale consideration in cash to the vendors for purchase of immovable property was clearly in violation of provisions of the Act. Secondly, there is no evidence from the assessee-appellant to suggest that she had received cash from her mother in law and paid the said cash amount to the vendors. Contrary to it, the submission put forth by AR for the appellant is that Smt. Yashoda Devi had withdrawn the abovesaid amount and paid the same in cash to the co-owners. This version was never put forth by the assessee at any stage of the proceedings before the AO or before Learned CIT(A). Thirdly, the assessee did not disclose said income in the Income tax return for the year under consideration. Same adversely affects the case of the assessee, particularly, when, admittedly, she has not been maintaining any books of accounts. In the given situation, self serving confirmation by Smt. Yashoda Devi, mother in law of the appellant, does not come to the help of the assessee-appellant. Nowever, taking into consideration income of the assessee during the F.Y. 2016-17 i.e. of Rs. 3,66,224.00 - Rs. 54,000.00 paid to Mohan Broker Agency during said year, we restrict the addition to Rs. 9,08,376 (i.e. Rs. 12,20,600.00 - Rs. 3,12,224.00, source of which she failed to establish, despite reasonable opportunity, before the Assessing Officer and before Ld. CIT(A). Validity of impugned assessment order as no DIN Number was generated as regards the assessment order - Record reveals that while challenging the impugned assessment order before Learned CIT(A), no such ground/objection on behalf of the assessee-appellant was raised. Even though this is a legal ground and can be raised before the Appellate Tribunal, it was for the assessee-appellant to prove to the satisfaction of this Tribunal if any prejudice has been caused to the assessee-appellant due to non mentioning of DIN number. Instructions issued by Central Board of Direct Taxes are meant for compliance by the Income Tax Authorities. When the instructions were issued that such communications without DIN number shall be treated as non-est , and shall be deemed to have never been issued, can safely be said to have been issued to ensure and lay emphasis on their compliance by the Income tax authorities, without fail. It is not the allegation of the appellant that no assessment proceedings were conducted by the Assessing Officer or that the impugned assessment order is a made up or forged and fabricated document. In absence of any such plea or material to suggest that any prejudice was caused to the assessee-appellant, we do not find any merit in the contention raised on behalf of the assessee-appellant that because of non mentioning of DIN number. in the impugned assessment order, the same deserves to be set aside. Impugned assessment order not digitally signed-its impact - Instruction No.1/18 dated 12.2.2018 issued by Central Board of Direct Taxes has also been relied on in the written submissions to submit that all departmental orders/notices/communications issued to the assessee through e-proceedings are to be digitally signed by the AO. As already noticed above, instructions issued by Central Board of Direct Taxes are meant for compliance by the Income Tax Authorities. Same can safely be said to have been issued to ensure compliance and lay emphasis on their compliance by the Income tax authorities, without fail. It is not the allegation of the appellant that no assessment proceedings were conducted by the Assessing Officer or that the impugned assessment order is a made up or forged and fabricated document. Ld. AR for the appellant has not been able to satisfy if any prejudice was caused to the assessee-appellant for want of digital signatures on the impugned assessment order. Accordingly, we do not find any merit in the contention raised on behalf of the appellant. Prior approval u/s 153D of the Act, whether the same was granted mechanically? - Significant to note that after having raised abovesaid inconsistent grounds as regards the approval, in the common paper book-II dated 29.08.2024 presented on behalf of the assessee-appellant on 17.09.2024, the very first document made available at page No. 23 (as assigned by the Ld. AR for the appellant), is the copy of approval u/s 153D of the Act, accorded by Additional Commissioner of Income Tax, Central Range, Udaipur, vide its letter dated 31.12.2019.The impugned assessment order is dated 30.12.2019. It is available from the abovesaid letter dated 31.12.2019 that on receipt of letter dated 30.12.2019 from the office of DCIT, Central Circle, forwarding therewith draft assessment orders, mentioned therein, for approval u/s 153D of the Act, Additional Commissioner of Income Tax went through the contents of draft assessment orders and accorded approval u/s 153D of the Act. In view of the said document submitted by the appellant, there is no merit in the contention raised on behalf of the assessee-appellant.
Issues Involved:
1. Addition of Rs. 54,000/- as unexplained investment under Section 69 of the Income Tax Act. 2. Addition of Rs. 12,20,600/- due to undisclosed investment in immovable property. 3. Validity of the assessment order due to non-generation of Document Identification Number (DIN). 4. Impact of the assessment order not being digitally signed. 5. Whether prior approval under Section 153D was obtained mechanically. Detailed Analysis: 1. Addition of Rs. 54,000/- as Unexplained Investment: The assessee's appeal challenged the addition of Rs. 54,000/- made by the Assessing Officer (AO) under Section 69 of the Income Tax Act, claiming it was an unexplained investment. The AO observed that the assessee credited this amount in the account of M/s Mohan Broker Agency, a concern of her husband, without explaining the source. The assessee contended that this amount was a repayment of a loan taken from M/s Mohan Broker Agency, supported by bank statements showing repayments via account payee cheques. The Tribunal found that the AO did not consider the material evidence provided by the assessee, including bank statements and balance sheets, which indicated the repayment of the loan. Consequently, the Tribunal set aside the addition of Rs. 54,000/-. 2. Addition of Rs. 12,20,600/- Due to Undisclosed Investment: The AO added Rs. 12,20,600/- to the assessee's income, citing undisclosed investment in the purchase of a plot in Suwana. The assessee claimed that the purchase was financed through a loan from her mother-in-law, Smt. Yashoda Devi, who withdrew funds from her bank account. However, the CIT(A) found no evidence of cash transfer from Smt. Yashoda Devi to the assessee. The Tribunal noted the absence of supporting evidence for the cash payment and the violation of the Act's provisions regarding cash transactions. Given the lack of disclosure in the income tax return and the absence of maintained books of accounts, the Tribunal partially upheld the addition, restricting it to Rs. 9,08,376/- after considering the assessee's income for the financial year. 3. Validity of Assessment Order Due to Non-Generation of DIN: The assessee argued that the assessment order was a nullity due to the absence of a DIN, as mandated by CBDT instructions. The Tribunal noted that while the issue was sub judice before the Supreme Court, there was no evidence of prejudice caused to the assessee due to the non-mentioning of the DIN. The Tribunal emphasized that the instructions were for compliance by the tax authorities and found no merit in the assessee's contention to set aside the order on this ground. 4. Impact of Assessment Order Not Being Digitally Signed: The assessee contended that the assessment order, manually signed, should be set aside for not being digitally signed as required. The Tribunal found no merit in this argument, as the appellant did not demonstrate any prejudice caused by the lack of digital signatures. The Tribunal reiterated that instructions for digital signatures are meant for compliance by tax authorities, and the absence of digital signatures did not invalidate the assessment order. 5. Whether Prior Approval Under Section 153D Was Obtained Mechanically: The assessee challenged the jurisdiction of the assessment order, claiming no prior approval under Section 153D was obtained or was granted mechanically. The Tribunal noted the approval dated 31.12.2019 by the Additional Commissioner of Income Tax, which was in accordance with the law. The Tribunal found no merit in the contention that the approval was mechanical, as the document indicated a thorough review of the draft assessment orders. Conclusion: The appeal was partly allowed. The Tribunal set aside the addition of Rs. 54,000/- and restricted the addition of Rs. 12,20,600/- to Rs. 9,08,376/-. The Tribunal found no merit in the contentions regarding the absence of a DIN, the lack of digital signatures, and the mechanical grant of approval under Section 153D.
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