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TMI Blog2022 (8) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... nd withdrawal. These facts available on record support the claim that the assessee was engaged in some small scale business trading activity. As observed, we find that no contrary fact or evidence has been referred by the ld. PCIT to show that the claim was incorrectly accepted by the AO. The assessee is stated to be currently engaged as a farm labourer and is stated to have overtly engaged in the business to gain financial legitimacy. The efforts in the unorganized sector even if sporadic in order to gain a credible financial legitimacy should be encouraged and not allowed to be stunted by the administrative brunt. The enterprise and efforts of a farm labourer to have a footprint in financial sector by engaging in trade in cloth etc, from house to house/village mart on a cart should be given due consideration. There is a rising India which inhabits the unorganized sector having aspirations to rise on their own steam and courage. On a perusal of the facts on record and the impugned order we find that no fact or evidence has been referred to by the ld. PCIT to show that the assessee was engaged in any nefarious activity from which the amounts were deposited and withdrawn. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2021 wherein the Hon'ble Supreme Court has held as under:- 8. Therefore, we dispose of the M.A. No. 665 of 2021 with the following directions:- I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021. II. In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply. III. X X X X X X X IV. X X X X X X X 3.1 Reliance was also placed upon the decision of the jurisdictional High Court as clarified vide order/Clarification No.30/RG/Spl.Misc. dated 09.07.2020 as under : 'it is clarified for information of the learned Advocates, Litigants and General Public that the limitation for fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y) and termination of proceedings. 2. The registry of this Hon'ble High Court and the Subordinate Courts in the States of Punjab, Haryana and Union Territory, Chandigarh shall comply with the aforesaid directions for computation of period of limitation strictly. 3.2 Accordingly, it was his submission that the present appeal filed by the assessee may be treated as having been filed within time. 3.3 The ld. CIT-DR considering the facts and the content of the application agreed that the delay can be condoned as it is covered by the decisions in the pandemic period. 4. We have heard the rival submissions and perused the material available on record. Taking into consideration the position of law as settled by the Apex Court and considering the limitation period available to the assessee under the Statute, the delay stands addressed and is condoned. Ordered accordingly. 5. The parties, accordingly, were directed to argue the appeal on merits. 6. The ld. AR inviting attention to the record submitted that the Revisionary Powers have been exercised arbitrarily and contrary to law. Hence, it was his prayer that the order be quashed. 6.1 Referring to the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a CA attended the proceedings on behalf of the assessee. It has been submitted by the AR of the assessee that during the year under consideration the assessee was doing the trading of cloth and the amount deposited in cash was sale proceeds of the business which have, been declared in the return u/s 44AD 2 After discussion and keeping in view the information filed by the assessee the returned income of Rs.2,08,806/- is accepted. The assessee had taxable income during the period under consideration but neither the assessee filed return of income nor taxes were paid by him. The assessee filed the return after issue of notice u/s 148 by the department. Therefore, I am satisfied that the assessee has concealed the particular of income. Hence Penalty proceedings u/s 271(l)(c) of the I.T Act are initiated separately. 6.4 Inviting attention to the synopsis filed and the responses of the assessee made to the queries raised by the AO alongwith the copy of the bank passbook available to the AO as well as the ld. PCIT and also filed before the ITAT, it was submitted, that pages 38-39 are copies of the notices issued to the assessee. The reasons recorded for initiating proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity on a cart (phayri) from door to door or weekly market etc. It was his submission that this business activity in the unorganized sector was a regular seasonal business of the assessee for a few years at that point of time. It was elaborated that infact he deposited this money in the bank and withdrew through bank because he was informed that in order to take a housing loan which he was interested of availing, he was informed that he needed to show some activity in the bank. Acting on this so called advice or information, this entire exercise has resulted. It was further submitted that had the assessee opened a CC Account and carried out his business activity therefrom the deposits and withdrawals would not have been questioned by the tax authorities. The whole situation has arisen as being an ill informed person, he proceeded to undertake this activity through his SB Account in order to justify that he had a financial presence for getting a housing loan. Now the said business in the unorganized sector has completely stopped by the assessee and he is engaged as a farm labourer. 6.8 It was his submission that all these facts in regard to the deposits in the bank account tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng evidence has been filed regarding the business activity, therefore, all the cash deposits of Rs.24,79,000/-should have been considered as unexplained cash deposits from undisclosed sources and the assessing officer was required to add all the cash deposits to the income of the assessee. In view of the facts discussed above it is clear that the assessment order to this extent is erroneous and prejudicial to the interest of revenue. The A.O. should conduct detailed enquiries on the above issues. The nature of business being conducted by the assessee should be examined on the basis of documentary evidences. The purchase and sales should also be examined since the assessee has claimed that the cash deposits were out of business receipts. In case no satisfactory explanation is found after inquiry the entire deposits should be added back to the income of the assessee. 6.11 Addressing para 4 it was his submission that the reliance placed on the legal position as set out in the case of Malabar Industrial Co. Ltd. Vs CIT 243 ITR 83 (S.C) it was submitted, was not disputed. Infact the assessee is also relying on it. In the facts of the present case, it was submitted, the order has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Krypton Datamatics Ltd. V. DCIT, Central Circle, Patiala, (65 taxmann.com 324)(Chandigarh -Trib.) and Amritsar Bench of the Tribunal in Principal Commissioner of Income-tax, Bathinda v. Jiwan Kumar (2017) 82 taxmann.com 221 . Reliance was also placed upon Narain Singia v. Principal Commissioner of Income-tax, (Central) Ludhiana (2015) 62 taxmann.com 255 and Pawan Kumar Vs. ITAT (2015) 62 taxmann.com 260 (Chandigarh). Relying upon the position of law and the facts on record, it was his submission that the impugned order may be quashed. 7. The ld. CIT-DR on the other hand relying upon the impugned order submitted that no facts or evidences have been taken into consideration by the AO to accept that the assessee was in the business of trading in cloth. It was his submission that the assessee has not filed any return u/s 139 and has merely claimed that his income is covered u/s 44AD. This fact has been accepted by the AO without enquiring into the issue. It was his submission that it is a mere story to cover up the deposits in the bank account of the assessee which is required to be looked into specifically since the assessee was a non filer of return. 8. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are erroneous in so far as prejudicial to the interest of the revenue in terms of provisions of section 263 of the Act including Explanation 2 inserted by the Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, the assessment order passed by the AO on 28.11.2018under section 143(3) r.w.s.147 of the Act for the A.Y. 2011-12 is cancelled with the direction to pass an order afresh in accordance with law keeping in view the observations made in the above paras and after affording reasonable opportunity of being heard to the assessee. 9.1 A perusal of the order shows that reliance has been placed upon decision of the Apex Court in the case of Malabar Industrial Co.Ltd. Vs CIT 243 ITR 83 (S.C), Ram Pyari Devi Sarogi V CIT 67 ITR 84 (S.C) and Tara Devi Aggarwal Vs CIT 88 ITR 323 (S.C) Before addressing the legal position, it is necessary to first address the facts available on record which were available to the ld. PCIT. It is seen that the reply of the assessee alongwith copy of the bank account of the assessee and explanation in regard to the deposits was available to the ld. PCIT. It has already been extracted in the earlier part of this order. On a perusal of the same, it is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the claim of the assessee. 10. Before parting, we deem it appropriate to note that we have taken into consideration the decisions relied upon by the ld. PCIT. Specific mention may be made to the decision rendered by the Apex Court in the case of Rampyari Devi Sarogi Vs CIT 67 ITR 84 (S.C) on which the ld. PCIT has relied upon. In it is seen that in the facts of the said case, it is seen that the assessee was found to have manipulated her name and address so as to ensure that her case came up before a specific AO. The assessee's name starting with R would have gone to a specific AO. Considering the facts, it was held that the AO before whom the return was filed was the AO who had jurisdiction over the alphabetical letter S to Z . It was also noticed that she had also given incorrect address in order to ensure that her return was filed before the ITO, D' Ward, Howrah. The Hon'ble Apex Court took notice of paragraph 9 of the decision of the Hon'ble High Court wherein it had been held that it had been ascertained that the ITO, D' Ward, Howrah had no jurisdiction over the assessee and hence, all the assessments made by him were held to be ab-initio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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