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TMI Blog2013 (11) TMI 1730X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 69 - No valid reason as to why he kept so much cash with him for over a period of one year when he was holding a bank account. - HELD THAT - In the present case the assessee has failed to prove the source of deposit with valid reasons and proper evidence. In this view of the matter, we do not find any infirmity in the order of the CIT (A) in sustaining the addition of ₹ 6,50,000/-. Accordingly, ITAT upheld the order of the CIT (A) by dismissing the ground raised by the assessee. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER Mohd. Afzal for the Appellant. Smt. Suman Mallika for the Respondent. ORDER PER SAKTIJIT DEY, J.M: Saktijit Dey, Judicial Member This appeal by the assessee is directed against the order dated 27-8-2009 of CIT (A)-IV, Hyderabad passed in appeal No. ITA No.166/ITO6(3)/CIT(A)-IV/2007-08 pertaining to the assessment year 2005-06. 2. The assessee has raised 5 grounds of appeal. Ground Nos. 1 and 5 being general grounds are not required to be adjudicated upon. In ground No.3, the assessee has raised a legal issue pertaining to the validity of the assessment order passed in pursuance to a notice issued u/s 142(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge the validity of the notice issued u/s 142(1) during the appeal proceedings. The CIT (A) further relied upon a decision of Hon'ble Supreme Court in case of CIT v. S.Raman Chettiar [1965] 55 ITR 630 and Hon'ble Calcutta High Court in their decision in Indian Tube Co. Ltd. v. ITO [2005] 272 ITR 439 held that in a return submitted by an assessee pursuant to an invalid notice, cannot be ignored or disregarded by the ITO. On consideration of the above, the CIT (A) held that the assessment made by the Assessing Officer is valid. So far as merit is concerned, the CIT (A) confirmed the addition by holding that the assessee had failed to substantiate his claim that the deposit was made out of the earlier withdrawals. 5. The learned AR taking us through the provisions of section 142(1) of the Act as applicable to the relevant assessment year submitted before us that the amendment made by the Finance Act, 2006 u/s 142(1) by inserting the proviso is clarificatory in nature since there is no time limit for issuance of notice u/s 142(1) of the Act. He submitted that as per the meaning of the said proviso, the Assessing Officer can issue a notice u/s 142(1) of the Act after the end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub-section . On a plain reading of the provision contained u/s 142(1) of the Act along with the proviso introduced by Finance Act, 2006 with retrospective effect from 1-4-1990, it would be clear that the Assessing Officer is empowered under the Act to issue notice u/s 142(1) of the Act after the end of the relevant assessment year to a person within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year and any such notice issued to the assessee shall be deemed to have been served in accordance with the provisions of section 142(1) of the Act. Thus, it is very much clear that the Assessing Officer can issue a notice u/s 142(1) of the Act at time after the end of the relevant assessment year. There is absolutely no restriction on the part of the Assessing Officer to issue notice u/s 142(1) before expiry of one year from the end of the relevant assessment year as has been held by the CIT (A). The provisions of section 142(1) of the Act, in our view, do not provide any such restriction, after the insertion of the proviso to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued after end of one year from the relevant assessment year is barred by limitation or not. At this stage, it is necessary to look into the provisions contained u/s 142(1) of the Act. 142 (1) For the Purpose of making an assessment under this Act, the AO may serve on any person who has made a return (under section 115WD or section 139 (or in whose caswe the time allowed under sub-section (1) of section 139 for furnishing the return has expired a notice requiring, on a date to be therein specified- (i) Where such person has not made a return (within the time allowed under sub-section (1) of section 139 (or before the end of the relevant assessment year] to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the learned AR is of no help to the assessee as it was rendered prior to the insertion of proviso to section 142(1) of the Act. We are therefore of the view that the CIT (A) was not correct in holding the issuance of notice u/s 142(1) to be ab initio void. Since the CIT (A) has decided the appeal on technical issue without going into merits of the case, we think it proper to set aside the matter to the file of the CIT (A) and direct him to dispose of the appeal on merits in accordance with law after affording a reasonable opportunity of being heard to the assessee.' 9. The Hon'ble Delhi High Court in case of DIT v. KLM Royal Dutch Airlines (supra) also expressed the same view while considering the identical issue of issuance of notice Therefore, respectfully following the decisions of Income-tax Appellate Tribunal, Hyderabad Bench as well as the Hon'ble Delhi High Court as referred to herein above, we hold that the notice issued u/s 142(1) of the Act in the instant case is valid and consequently the assessment order passed cannot be held to be invalid in law. 10. In aforesaid view of the matter, we are unable to accept the learned authorised representative for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard the submissions of both the parties and perused the material on record as well as the orders passed by the revenue authorities. Undisputedly as revealed from the bank account, the assessee has made cash deposit of ₹ 6,50,000/- on 8-9-2004. It is the contention of the assessee that the aforesaid deposits were out of the cash available with him from withdrawals made by him earlier from the SBI from February, 2002 to September, 2003. However, such explanation of the assessee is against human probability and totally unbelievable. When the assessee is having a bank account, it is beyond human probability and totally incomprehensible that the assessee would keep quite a substantial amount of ₹ 6,50,000/- in cash with him for a period of over one year without depositing into the bank account. The assessee has also not shown any valid reason as to why he kept so much cash with him for over a period of one year when he was holding a bank account. In the absence of any cogent reason backed by sufficient evidence, the explanation of the assessee is only a make believe story and hence cannot be accepted. The decisions relied upon by the learned AR will also be of no he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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