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TMI Blog2023 (8) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... reason therein. In absence of any notice issued under sub-section (2) of section 143 after receipt of fresh return submitted by the assessee in response to notice under section 148, the entire procedure adopted for escaped assessment, shall not be valid. Reassessment order passed by AO u/s 143(3) r.w.s. 147 quashed - Appeal of the assessee allowed. - Shri Dr. A. L. Saini, Accountant Member For the Assessee : Ms Anchal Poddar, Advocate, Dr. Avinash Poddar, Advocate and Vijeta Choudhary, CA For the Respondent : Shri Vinod Kumar, Sr. DR ORDER PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Surat [in short the ld. CIT(A) ], National Faceless Appeal Centre (in short the NFAC ), Delhi, dated 27.03.2023, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ), dated 20.12.2019. 2. The grounds of appeal raised by the assessee are as follows: 1. That the Ld. CIT(A) has erred in dismissing the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows. The assessee before us is a senior citizen and engaged in agricultural activities. As per the provisions of section 139 of the Income Tax Act, 1961, the assessee had not filed his return of income for the assessment year (AY).2012-13. It was noticed by the assessing officer from the AIR/CIB/26AS information on the ITD that assessee has made cash deposit of Rs. 10,01,100/- in his bank account maintained with the Varachha Co-op. Bank Ltd and has received interest on fixed deposits during the year under consideration. Therefore, Assessment Proceedings u/s 147 of the Income Tax Act, 1961 were initiated in assessee`s case for A.Y. 2012-13 by issuing notice u/s 148 of the Income Tax Act, 1961 to the assessee on 31/03/2019 after obtaining necessary approval from competent authorities requesting him to deliver his return of income within 30 days from the receipt of the notice. 5. In response to the above notice, the assessee has furnished return of his income declaring total income at Rs. 740/- and agriculture income to the tune of Rs. 3,15,850/- on 29.04.2019. Thereafter, notice u/s 142(1) of the Income Tax Act, 1961 was issued to the assessee on 14.09.2019 requesting assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding the details in case of Shri Mohanbhai Raghavbhai Beladiya as asked by good self. In this context we are submitting you the following details: - The Source and details related to opening balance of Cash: Rs. 18,82,815/- 1. Agriculture cultivation activity: The assessee is engaged in agriculture after getting maturity i.e. 22 Years and the age of assessee to the year of assessment is 73 years. Hence it appears that the assessee is engaged in agriculture cultivation since 51 years. The assessee is earning agriculture income and it is exempt from income tax and hence income tax return was not been filed by assessee. The agriculture land was also inherited from his father and other were been purchased by assessee. 2. Agriculture bills 1997-98 to 2009-10: We here by produce available agriculture bills from 1997-98 to 2009-10 and copy of pass book of Sayan Sahakari Mandli from 2005- 06 to 2011-12. Which shows that the assessee is enaged in agriclture acvivity and receiving income in cash for that years and the assesee has opned bank accounts in the F.Y. 2011-12 so the accumulated savings were been deposited to bank for purcahse of land. 3. Gift Received From Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hardly remain much for accumulated savings as claimed by the assessee. 9. In respect of gifts received in cash from family members, the assessing officer observed that assessee has furnished two gift deeds on stamp paper in support of his claim. In respect of gift received from Mrs. Champaben Babubhai Gadhiya, it was submitted that she is elder sister of assessee and has gifted Rs. 2,00,000/- on 30.03.2006 to the assessee. However, on perusal of gift deed, it was noticed by the assessing officer that Champaben is not his elder sister but daughter of the assessee. Further, bank account statement or copy of return of income (ROI) filed by Mrs Champaben Babubhai Gadhiya has not been furnished. Therefore, creditworthiness of the donor is not proved. This gets support from the gift-deed itself wherein it is written that Champaben has given the gift from her savings from the 'Majuri karri' i.e. labour work. 10. In respect of gift of Rs. 5,51,000/- received from brother Shri Ganeshbhai Beladiya, a copy of gift-deed dated 08.08.2008 and 7/12 of agricultural land held by him was furnished before the assessing officer. However, no any other proof showing accumulated savings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has claimed that the source of the cash balance is agricultural income. However, this claim of the assessee is not acceptable as the net agricultural income of the assessee is only Rs. 1,28,000/- from Kaiyanpur land and further, the assessee had purchased the lands at Gothan during F.Y. 2006-07 2007-08 for Rs. 1,78,000/-. It is further noticed from above that assessee has purchased diamonds worth Rs. 3,50,000/- in FY 2004-05 and Rs. 3,75,000/- in FY 2007-08. However, these savings from the agricultural produce is not acceptable. Considering that the assessee also had the social responsibilities such like marriage of children, other social - religious ceremonies of his family and would have met expenses of medical treatment/sickness in a family member with his savings. Hence, after deducting house hold expenses, social responsibilities and other expenses there would hardly remain much for accumulate savings as claimed by the assessee. Further, with regard to the Gift deed of Rs. 5,51,000/- of his elder brother (Mr. Ganeshbhai Mohanbhai Beladiya) the assessee has not produced any other proof showing accumulated savings of Rs. 5,51,000/-. Merely, holding agricultural land and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural income, therefore the opening cash balance is out of gift received and the agricultural income. 17. Ms. Poddar, also argued that assessee is not maintaining books of accounts, therefore addition made by the Assessing Officer under section 68 of the Act is factual incorrect because section 68 of the Act says if any amount found credited in the books of account , therefore, addition made by the assessing officer under section 68 of the Act is not acceptable. The Learned Counsel also submitted that the opening cash balance is not a credit in the books of account as it is coming from the previous year, therefore the Assessing Officer should not have made addition under section 68 of the Act. 18. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue, pleaded that the agricultural bills and documents submitted by the assessee does not contain the relevant details. The cotton bills and sugar cane bills submitted by assessee are self-made bills and vouchers and therefore should not be relied on these factitious documents. The Ld. Sr. DR also submitted that the daughter of the assessee, who is doing labour job and she is in a poor cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice u/s 143(2) of the Act, which goes to the root of the matter needs to be admitted. Hence, I hereby allow the assessee to raise additional ground of appeal. Since this ground raises question about the assumption of jurisdiction and validity of assessment order itself, therefore, I thought it appropriate to take up and decide this additional ground first. 21. On verification of records it is clear that assessing officer has not issued notice under section 143(2) of the Act. However, ld DR for the Revenue, invited our attention towards section 292BB of the Act and stated that assessee has participated in the assessment proceedings, therefore this additional ground cannot be adjudicated at this stage. I do not agree with the arguments advanced by ld DR for the Revenue, as it is a settled position of law that an assessee can raise legal ground at any stage of proceedings. I note that Hon`ble Supreme Court in the case of ACIT v. Hotel Blue Moon 321 ITR 362(SC), held that it is necessary to issue notice under section 143(2) of the Act. I have noted the argument of the Ld. Counsel for the Assessee that assessing officer has not followed the mandatory procedure of assessment laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X
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