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TMI Blog2024 (6) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the totality of the facts and considering the fact that assessee has filed the returns of income for A.Ys. 2012-13 to 2014-15 by offering income from proprietary concern namely, M/s. Sri Sai Consultancy and that returns for A.Y. 2012-13 to 2014-15 were also filed before the completion of assessment for the impugned year, we are of the considered opinion that adoption of net profit rate of 15% on the total deposits will meet the ends of justice. We therefore direct the AO to restrict the disallowance to 15% of the total cash deposits in the bank accounts of assessee as her business income, to be taxed at normal rate - The balance addition is directed to be deleted. Accordingly, the appeal of the assessee is partly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the cash deposited is income of the assessee without having any tangible material in possession of the AO. Therefore, the notice u/s 148 and the subsequent order u/s 147 r.w.s 144 are to be held as null and void. 3. In the PAN data the assessee's email ID is available therefore, the learned Assessing officer ought to have served the notice u/s 148 by email instead of serving by affixture at the vacated premises of the assessee, therefore, notice u/s 148 is not served and the order u/s 144 made by not serving the notice is an invalid order. 4. Even the service by affixture is not as per the manner, as provide under the code of civil procedure 1908 for the purpose of service of summons, therefore, therefore, notice u/s 148 is not served and the order u/s 144 made by not serving the notice is an invalid order." 3. The brief facts of the case are that as per the information available, it is noticed that the assessee has deposited cash to the tune of Rs. 1,22,19,500/- in her three saving accounts viz. (1) Rs. 63,54,500/- in HDFC Bank, East Marredpally Branch, Secunderabad (A/c. No.12931930003091), (ii) Rs. 41,01,000/- in HDFC Bank, East Marredpally Branch, Secunderab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and obtained permission from the Range JCIT to issue notice u/s 148 of the IT Act and issued the notice. Subsequently, the assessee filed her returns of income for the assessment year 2012-13 to 2016-17 and the return of income for the subject assessment year i.e. 2013-14 was filed on 27.08.2016, in the business circle. It is pertinent to mention here that considering the nature of activity and residential address the computer automatically selects the jurisdiction of the Assessing Officer, therefore, the returns were uploaded to the Assessing Officer Ward-10(4), Hyderabad. Considering the objections raised the learned CIT sought remand report from the Assessing Officer. The remand report which is reproduced at page 4,5 and 6 of the CIT(A) order. According to the remand report (Para 4) as the assessee is having business income, therefore, the ITO Ward-12(2), Hyderabad, which is a salary ward has transferred the file with transfer proforma dt: 09.10.20 17 to the Income Tax Officer having territorial jurisdiction over the assessee i.e. to the ITO Ward-4(3), Hyderabad, mentioning the reasons that assessee is deriving income from business and other sources, therefore, the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een served through IT portal, to email address instead of resorting to substitute service. V. Without prejudice to the above submissions the receipts are from business under taken by the assessee trader and also as a canvassing agent. In respect of subsequent years the learned Assessing Officer Ward-10(4) where the returns were filed has accepted the income admitted by the assessee, therefore, the income admitted in the subject assessment year also may kindly be accepted." 7. On the other hand, in support of its case, the ld. DR filed the written submissions, which are to the following effect : 1. Most respectfully submitted that the assessee has filed an appeal against the order of CIT(A) who had upheld the validity of notice u/s 148 as well as treating the cash deposits as unexplained u/s 69A. The facts in brief are that the AO was in receipt of information that the assessee has deposited a sum of Rs. 1.22 cr in her three SB accounts. The assessee had not filed her ROI. Since the return was not filed, the AU issued notice u/s 148 on 21.06.2016. The notice could not be served therefore the same was again served by way of affixture. Subsequent notices were also affixed. As t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2016-17 on 16/09/2016 with address as H. No. 2-2-7-2/1,2,3, B Lane, Flat no. 202, 2nd Floor, The Legend Apartment, Shivam X Road, DD colony, Hyderabad. - Both the returns filed a few days apart have different addresses. - AO issue notice u/s 143(2) dated 16/05/2017 on the address given in the return filed in response to notice u/s 148. This also remained unserved, therefore was served again by affixture. - The AC) noticed the source of income and transferred the case to territorial ITO Wd 4(3), Hyderabad having jurisdiction over business income vide transfer memo dated 09/10/2017. The assessee showed income from other sources and business. - For AY 2017-18 the assessee filed her ROI on 21/08/2017 in ITR-1 Sahaj with address at 3-27 Vikrampuri, Street No. 4, Habsiguda, Hyderabad. Since the income offered was under the head Salary, the AO transferred the case to jurisdictional AO, ITO Wd 12(2), Hyderabad vide transfer memo dated 02/11/2017. - The AO issued final show cause notice on 05/12/2017 u/s 144. This was served via e-mail on [email protected] and also by way of post at the address 10-3-1/14, Sy No 19, Flat no 202 Laxmi Residency Apts, East Marredp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenge the jurisdiction within 1 month after receipt of notice u/s 142(1), 143(2) and / or 148 of the I.T. Act. The relevant extract is as under - "Jurisdiction of Assessing Officers. 124.(1) ...... (2) ........ (3) No person shall be entitled to call in question the Jurisdiction f an Assessing Officer - (a) where he has made a return under sub-section (1) of section 115 WI) or under sub-section (0 of section 139, after the expiry of one month from the date on which he was served with ci notice under sub-section (1) of section 142 or sub-section (2) of section / /5 WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (1) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115 WI) or sub-section (1) of section /42 or under sub-section (1) of section .115 WH or under section / 48 for the making the return or by the notice under the first proviso to section 115 WE or under the first proviso to section 144 to show cause why the assessment should not he completed to the best of the Judgment of the Assessing Officer, whichever is earlier; (c) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 124 states that the Assessing Officer would have jurisdiction over the area in terms of any direction or order issued under sub-section (1) or sub-section (2) to Section 120 of the Act. Jurisdiction would depend upon the place where the person carries on business or profession or the area in which he is residing. Sub-section (3) clearly states that no person can call in question jurisdiction of an Assessing Officer in case of non-compliance and/or after the period stipulated in clauses (a) and (b), which as observed in S.S. Ahluwalia (supra) would negate and reject arguments predicated on lack of subject matter jurisdiction. Where an assessee questions jurisdiction of the Assessing Officer within the time limit and in terms of sub-section (3), and the Assessing Officer is not satisfied with the correctness of the claim, he is required to refer the matter for determination under sub-section (2) before the assessment is made. Reference of matter under sub-section (2) would not be required when Assessing Officer accepts the claim of the assessee and transfers the case to another Assessing Officer in view of the objection by the assessee. (In terms of sub-section (3) to Section 124 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n duly served upon her and such assessee is now precluded from taking any objection that the notice was not served or served in improper manner. 6. In view of the above, it is submitted that the ITO Wd 12(2) has correctly assumed the jurisdiction. The notice has been properly served. In the absence of any supporting evidence of cash deposit, the entire cash receipts have been correctly taxed as unexplained money. It is therefore prayed that the order of the AO and CIT(A) may be upheld." 7.1. In support of its case, ld. DR relied upon the decision of hon'ble Delhi High Court in the case of Abhishek Jain Vs. ITO, Ward-55(1), New Delhi reported in (2018) 94 taxmann.com 355. 8. We have heard the rival arguments made by both sides, perused the orders of Assessing Officer and ld.CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by both sides. We find that the Assessing Officer in the instant case made an addition of Rs. 1,22,19,500/- being the cash deposited in three savings accounts by assessee during the Financial Year 2012-13 as an unexplained money u/s 69A of the Act on the ground that assessee failed to comply wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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