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TMI Blog2024 (7) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of the subject cash deposit in her bank account further inspires confidence as regards the veracity of her claim that the same was, inter alia, sourced out of her accumulated cash savings. Also, the assessee's claim for having kept the aforesaid substantial amount of her past accumulated cash savings in the bank locker and not depositing the same in her bank account is supported in the backdrop of the reason given by her. Apropos the assessee s claim that the cash deposit of Rs. 10 lac in her bank account on 16.11.2016 i.e during the demonetization period was, inter alia, sourced from the cash withdrawals made by her from her bank accounts, we find substance in the same. On a scrutiny of the bank accounts of the assessee, a/w her consolidated cash flow statement, we find that as per the assessee s version (ignoring the Op. balance of C.I.H of Rs. 18.92 lac) net of cash deposits/withdrawals of Rs. 4,11,000/- was available with her on 16.11.2016, i.e. the date on which cash was deposited by her in the bank account during the demonetization period. Although part of the cash withdrawals made in tranches over the year would not be fully available with the assessee on the subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is time-barred by 37 days. Elaborating on the reasons leading to the delay, the Ld. AR had drawn my attention to an application dated 09.04.2024 seeking condonation of delay a/w. an affidavit of the assessee dated 10.04.2024. It was submitted by the Ld. AR, viz. (i) that all the communications regarding income tax matter were sent to the e-mail address [email protected] ; (ii) that when a show cause notice u/s.271AAC(1) of the Act was received from email address donotreply @incometax.gov.in , the assessee remained under a bonafide belief that no further action was required from her side against those emails as do not reply was mentioned in the sender's email address; (iii) the assessee being a septuagenarian was not computer savvy and her email account was created by an acquaintance; (iv) that the assessee had forgotten the password of her email address; (v) the assessee's husband expired in the year 1997 and thereafter within a short span of two years i.e 2002 2003, five of her close relatives expired and she was survived by only a daughter who was married. (vi) the assessee has resided alone since last more than 20 years; (vii) the assessee had never faced any li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f her email id and since the email account is never logged out from the mobile, the email id was being accessed. The assessee's husband expired in the year 1997 and thereafter in the year 2002 2003, five of her close relatives expired. Thereafter, she was survived by only a daughter, who was also married. Because of these reasons, the assessee, presently of 76 years of age, resides alone since last more than 20 years. Because of advanced age, loneliness, helplessness and circumstances through which she has passed in the last few years, the assessee always felt insecure and is not able to maintain proper frame of mind also. For all the to compliances, she totally depended on her counsel who has been assisting her since a very very long time. Under the above circumstances, due to confusion and the assessee never having faced any litigation all along in her life, the appellate order could not be landed over/ forwarded to her counsel timely because of which the appeal 'could not be filed timely. The assessee does not understand various procedures under the Income Tax law and whatever emails bearing the sender's ID Income Tax were received, she simply forwarded it to her cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of the institution of courts. A justifiably liberal approach has to be adopted on principal. Such liberal approach is adopted because ordinarily litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in meritorious matter being thrown out at very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. When substantial justice and technological consideration are pitted against each other, the cause of substantial justice deserves to be preferred. There is no presumption that delay is deliberate. The above case has been followed/ referred in a number of decisions of different High Courts, including the ones reported in (2010) 325 ITR 243 (All.), (2015) 375 ITR 15 (Mad.). 4. The reason for delay in filing appeal is thus beyond control of assessee. The assessee was prevented by sufficient reasonable cause in not filing the appeal within the prescribed time and the delay is not attributable to any intentional conduct of the assessee. Hence, it is most humbly and respectfully submitted that the delay in filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lained money u/s.69A of the Act. Accordingly, the A.O. vide his order passed u/s.143(3) of the Act dated 05.12.2019 determined the income of the assessee at Rs. 19,18,850/-. 7. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: 4.1 Ground No. 1 3: These grounds relate to the addition u/s. 69A of Rs. 10 lakh made by the AO on account of unexplained cash deposit in bank account during demonetization period. The appellant has derived income from salary and other sources. During the course of assessment proceedings, the appellant explained the source of cash deposit as withdrawal from bank and cash in hand. The AO in the order observed that though the appellant has claimed huge cash in hand, no evidence in respect therefor was produced. Not being satisfied with submission of the appellant, the AO made an addition of Rs. 10 lakh u/s 69A. The submission of the appellant has been perused, which has been reiterated thrice in ad verbatim manner. Her contention is that deposits were made from the cash in hand of Rs. 18,92,325/- as on 31.03.2016 and Rs 22,62,325 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble ITAT Hyderabad Bench, while dealing the identical issue in the case of Mir Basheeruddin Ali Khan vs Income Tax Officer, Ward-6(3), Hyderabad [2014] 42 taxmann.com 69 has categorically held that the assessee has to demonstrate sufficient reasons to explain as to why such huge cash was kept when the assessee was in possession of bank accounts. The relevant portion of the said decision is reproduced herein as under: Section 69 of the Income Tax Act, 1961-Unexplained Investments [Cash Deposit) Assessment Year 2005-06- Assessee had made cash deposit of Rs. 6.50 lakh in his saving bank account on 08/09/2004- He submitted that cash deposit was out of amount. withdrawn earlier from bank over a period from February, 2002 to September, 2003 and kept with him-Assessing Office rejected explanation and treated cash deposit of Rs. 6.50 lakhs as unexplained investments under section 69-Assessee had not shown any valid reason as to why he kept so much with him for over a period of one year when he was holding a bank account- Whether Assessing Officer was justified in treating amount of Rs. 6.50 lakhs as unexplained investments under section 69- Held, yes. Thus, the appellant has not fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 253/Viz/2020. The said. case law has been considered but the same is found quite distinguishable from the factual matrix of the present case. In the said case, the main question before the Tribunal was whether the cash receipts found during the course of survey action represent sales or not. The Hon ble ITAT after considering the financial statements held that there was sufficient stock to affect the sales and therefore, the cash receipts found during the course of survey action represent the sale which was already included in its financial statements. Therefore, no further addition is called for on account of such cash receipts. It is clear from the decision of the Hon ble, ITAT that the tribunal on the basis of the financial statements. concluded that there was sufficient sale reported in return of income and stock which could have affected such huge cash Sales. However, in the instant case, there is no such basis which could have substantiated such huge cash generation/cash position. Ground No. 4. : In this ground, the appellant has raised the issue that tax as per section 115BBE is computed as per tax rate substituted w.e.f. 01.04.2017, and therefore, the tax has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as is the case here, it can only apply to the assessment made in 2018- 2019 (Assessment Year) of the income accrued for the previous financial year; which is 2017-2018. The learned Counsel would seek to draw a distinction insofar as a modification of the rate as brought out in the Finance Act and a substantive provision altering accrued rights or creating new liabilities, on the 1st of April of a year. In the former, it could apply to the assessments of the previous year, made in that financial year, but a substantive amendment not relating to the rates, could only be applied to the assessments of that financial year and not of the previous year. Reliance is placed on the Constitution Bench decision of the Hon'ble Supreme Court in C.I.T Vs. Vatika Township Private Ltd. (2015) 1 SCC 1. The learned Counsel would also place before us a number of decisions of the Hon'ble Supreme Court in Kesoram Industries v. Commissioner of Wealth Tax, [AIR 1966 SC 13851, Guffic Chem P. Ltd v. C.I.T [2011(4) SCC 245/ C.I.T v. Sarkar Builders [(2015) 375 /TR 392 (SC)/, Shiv Raj Gupta v. C./. T [(2020) 425 ITR 420(SC) and State of Kera/a v. Alex Geor9-4.(2004) 271 /TR 290(SC), to further buttres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred Section 155BBE provided for 30% 68, 69, 69B, 69C and 69D. The same was amended by the 2nd Amendment, w.e.f. 01.04.2017, enhancing the rate to 60%. Hence there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that year. The enhanced rate applies from the commencement of the assessment year, which relates to the previous financial year. 14. Likewise it was by Chapter II with heading 'Rates of Income Tax, as provided in the Finance Act 2016, that a surcharge was introduced by way of the 3rd proviso of Section 2(9) of that Finance Act. This comes into effect from the Financial Year 2016-17; which is the year in which the subject seizures were occasioned. The proviso refers to various provisions where the advanced tax computed under er the fir first proviso stands increased by a surcharge for the purpose of the Union. Section 115BBE is one of the provisions referred to in the 3rd proviso and in the case of individuals the surcharge was @ 15% where the total income exceeds one crore, as on 01.04.2016. By the 2nd Amendment Act Section 2 of the Finance Act, 2016 stood amended by which 115BBE was omitted fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial addition to taxes on income imposed in. September 1931. It was held so in paragraph 7 and 8 7. The above legislative history of the Finance Acts, as also the practice, would appear to indicate that the term Income tax as employed in Section 2 includes surcharge as also the special and the additional surcharge whenever provided which are also surcharges within the meaning of Article 271 of the Constitution. The phraseology employed in the Finance Acts of 1940 and 1941 showed that only the rates of income tax and super tax were to be increased by a surcharge for the purpose of the. Central Government. In the Finance Act of 1958, the language used showed that income tax which was to be increased by a surcharge for the purpose of the Unio he word surcharge has thus been used to either increase the rates. of income tax and super tax or to increase these taxes. The scheme of the Finance Act of 1971 appears to leave no room for doubt that the term Income Tax as used in section 2 includes surcharge. 17. According to Article 271 notwithstanding anything in Article 269 and 270 Parliament may at any time increase any of the duties or taxes referred to in those Articles by a surcharge for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule 29 of the Income Tax Appellate Tribunal Rules, 1963. The Ld. AR had drawn my attention to the documents filed before me as additional evidence, which comprises of, viz. (i) a copy of the certificate dated 12.04.2024 issued by the bank; (ii) copies of returns of income of the assessee for the past 5 years; (iii) copies of the acknowledgments of the income-tax returns; and (iv) copy of medical certificates. The Ld. A.R submitted that the aforesaid documents have a strong bearing for adjudication of the issue involved in the present appeal and were not there before the lower authorities, therefore, the same in all fairness be admitted U/rule 29 of the Appellate Tribunal Rules, 1963. The ld. A.R on being queried as to why the said documents were not produced before the lower authorities, submitted, that the assessee had obtained the same after passing of the assessment and appellate orders, therefore, the same could not be submitted before the AO/CIT(Appeals). 10. The Ld. DR objected to the admission of the additional evidence filed by the assessee at the stage of proceedings before the Tribunal. 11. I have given thoughtful consideration and concur with the ld. A.R that as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, pension of her husband, and interest on deposits, considered in the backdrop of her old age and ill health, do not inspire any confidence in the A.O s observation that the cash deposit of Rs. 10 lac in her bank account was sourced from her undisclosed sources. My aforesaid conviction is guided by the principle of preponderance of human probabilities as had been emphasized by the Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT 214 ITR 801 (SC). 15. Also, my aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of CIT vs. Smt. P.K. Noorjahan (1999) 237 ITR 570 (SC). The facts before the Hon'ble Supreme Court were that a lady aged 20 years, had during the A.Y. 1968-69 and A.Y. 1969-70 purchased certain pieces of land on November 27, 1968, for Rs. 25,902/- and on November 15, 1969, for Rs. 34,628/-. The assessee on being queried about the source of the aforesaid investments, had stated before the A.O. that the same were sourced from savings from the income of the properties which were left by her mother's first husband. The A.O. rejected the aforesaid explanation and held the respective investments as having been made by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business income, no further verification is required to be made if the total cash deposit during the demonetization period is up to Rs. 5 lacs. It is further stated in the instruction that the source of such amount can be either household savings/savings from past income or amounts claimed to have been received from any of the sources therein mentioned, i.e. exempt income, cash withdrawals from bank, cash received from identifiable persons (with PAN/without PAN), and amount received from un-identifiable persons. Instruction No.03/2017 (supra) further states that the cash deposits above the aforesaid cut-off amount, i.e. Rs. 5 lacs may require verification to ascertain whether the same is explained or not. Also, it is stated in Instruction No. 03/2017 (supra) that the basis for verification can be income earned during past years and its source, filing of return of income and income therein shown, cash withdrawals from accounts, etc. For the sake of clarity, the CBDT Instruction No.03/2017 dated 21.02.2017 is culled out as under (relevant extract) 1.1 In case of an individual (either than minors) not having any business income, no further verification required to be made if total cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the said persons household savings/savings from past income, then, it can be concluded that the assessee in the backdrop of substantial income that was returned by her in the preceding years would be having substantially higher accumulated past savings. The Ld. A.R on being queried about the cash deposits of Rs. 10 lacs in the bank account with State Bank of India, Branch: Kutchery, submitted that the assessee due to certain family reasons was constrained to keep her accumulated cash savings in her locker with the said bank. Elaborating on the reason for keeping a substantial amount of cash in her bank locker, the Ld. AR submitted that the same was for the reason that as her youngest son-in-law was consistently pressing her hard for money, therefore, she had intentionally kept the money in her locker instead of bringing the said amount to his knowledge by depositing the same in her bank account. The Ld. AR had drawn my attention to the application filed by the assessee for admission of additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, wherein she had stated the reasons for keeping the cash in her bank locker, which reads as under: However, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -in-hand available with her out of the cash withdrawals made from her bank accounts during the year under consideration. The fact that the assessee had operated her bank locker no. 305 with State Bank of India, Branch: Kutchery on 16.11.2016 (as certified by the bank), i.e. the date of the subject cash deposit in her bank account further inspires confidence as regards the veracity of her claim that the same was, inter alia, sourced out of her accumulated cash savings. Also, the assessee's claim for having kept the aforesaid substantial amount of her past accumulated cash savings in the bank locker and not depositing the same in her bank account is supported in the backdrop of the reason given by her. 21. Apropos the assessee s claim that the cash deposit of Rs. 10 lac in her bank account on 16.11.2016 i.e during the demonetization period was, inter alia, sourced from the cash withdrawals made by her from her bank accounts, I find substance in the same. On a scrutiny of the bank accounts of the assessee, Pages 108 to 129 of APB read a/w her consolidated cash flow statement, Page, I07 of APB, I find that as per the assessee s version (ignoring the Op. balance of C.I.H of Rs. 18.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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