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TMI Blog2024 (9) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... he books so produced. Therefore, we feel that in the case of the assessee additions should be sustained instead partly [Rs. 50,886.08/-] - Appeal of the assessee is partly allowed. - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. Sarwan Kumar Gupta (Adv.) For the Revenue : Smt. Monisha Choudhary (Addl.CIT) ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. This appeal is filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi [ for short NFAC/ CIT(A) ] for the assessment year 2012-13 dated 15.12.2023, which in turn arises from the order passed by the ITO, Ward-5(1), Jaipur passed under Section 143(3) r.w.s. 147 of the Income tax Act, 1961 (in short 'Act') dated 21.10.2019. 2. The assessee has taken following grounds in this appeal; 1. The impugned order u/s 147 rws 143(3) of the I.T. Act, 1961 dated 21.10.2019 as well as the notice u/s 148 and action or proceedings u/s 147/148 are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned. As on being asked it has come to know that this email id was the counsel's old email id and he is not using this email id and has been escaped to be seen or was not in the habit to check this old email id regularly that is why later on the email id has been changed on the e-portal and in the returns filed by the assessee for the later years, the assessee has given its email id which is neelkamal [email protected] and this email id available with the department. Further that is why in the form 35 also the counsel had given his new email id [email protected], thus while issuing the notices and orders these both new email id was available with the CIT(A) and department. And no notices or orders were received on these neelkamal [email protected] and [email protected]. despite the order was sent on old email id. As the counsel at whose email id the notices or order were sent has not seen the email or escaped from him due to above reasons and the counsel is now Sr. citizen and not felling well. Thus the assessee has never come earlier about the orders, recently when the assessee asked to the other counsel who filed the appeal submission about the status of the appeal, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83(All), N. Balakrishnan v/s M. Krishanmurthy 7 SSC123. 7. The Hon'ble Jaipur Bench of ITAT has also condoned the dealy in the case of Ganesh Himalaya Pvt.Ltd. v. ACIT 22 Tax World 415 (Jp) where the filing was delayed because the son of the Managing Director had become victim of some misdeeds committed by the Holigans, particularly when on the similar points in the earlier four years, the appeals were filed in time. In the instant case also, the appeal could not be filed in time because of the above reasons which were bonafide and was a sufficient cause and there was no melafide intention. 8. Recent Decision of Apex Court: in a recent decision, the apex court have again reiterated that the expression sufficient cause should receive a liberal construction. The Hon'ble court have also held that advancing of substantial justice should be of prime importance. Kindly refer Vedbai vs. Shantaram Baburam Patil Others 253 ITR 798 (SC). Prayer: In view of above facts and circumstances and with the sympathy and settled legal position, the delay so caused may kindly be condoned. 4. The ld. AR of the assessee in addition submitted that the reasons of late filling is on account of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 148, the assessee e-filed his return of income at Rs. 1,78,880/- for A.Y. 2012-13 on 11.06.2019. Notices u/s 143(2)/142(1) of the IT Act issued and served upon the assessee through speed post. In response to this, the assessee filed information/details, which was examined by ld. AO. 8. During the assessment proceedings, the assessee was asked to file evidence/details regarding cash deposited of Rs. 3,80,000/- vide Notice u/s 142(1) of the IT Act dated 27.08.2019. The case was fixed for 31.07.2019. On this date the assessee has filed a reply through mail stating that:- Cash deposit in bank is out of cash sale proceedings and realization of new and old credit sale from of debtors and looking to the volume of sales and cash deposited, the cash deposited in bank is self justified. The reply filed by the assessee has been considered but found not tenable by the AO, as the assessee has not filed any documentary evidence to show the source of cash deposited in the bank account. Hence a show cause along with Notice u/s 142(1) of the Act dated 16.09.2019 was issued and served upon the assessee through ITBA Portal fixing the case for hearing on 23.09.2019 and asked why not cash deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons recorded is enclosed(PB3- 6). In response to the notice u/s 148 the assessee has again filed its return of income declaring the same income of Rs. 1,78,881/- on dt. 11.06.2019 (PB7-8). And also asked for providing the reasons recorded. Thereafter the assessee has filed the objection against the initiation the proceedings u/s 147/148 on dt. 09.07.2019(PB11-12) also order sheet (PB14). Thereafter the ld. AO has issue the notice u/s 142(1) and other notices, the assessee has filed the reply and details vide page 1 para 2 of the assessment order. The ld. AO has asked about the sources of cash deposited in the bank account. In response thereto the assessee has submitted that cash deposit in the bank account is out of cash sales proceedings and realization of new and old credit sale from of debtors and looking to the volume of sales and cash deposited, the cash deposited in the bank is self justified. However the ld. AO did not feel satisfy with the reply and alleged that the assessee has not submitted any documentary evidences in support of the cash deposits in the bank account, while the assessee has submitted all the details. The ld. AO has noted that during the course of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings are void ab-initio and liable to be quashed. 1.2.1 On this preposition we would like to draw your kind attention on direct decision Hon ble Gujrat High Court in the case of Mumtaz Hazi Mohamad Memon v/s ITO 408 ITR 268(Guj.) on the very same issue, wherein the Hon ble Court has held that 11. In this context, we have noted that the reasons proceeded on two fundamental grounds. One, that the property in question was sold for a sum of Rs. 1,18,95,000/- and two; that the assessee had not filed the return and that therefore his 1/3rd share out of the sale proceeds was not offered to tax. Both these factual grounds are totally incorrect as is now virtually admitted by the Revenue. It is undisputed that the assessee had actually filed the return of income for the said assessment year and income also offered his share of the declared sale consideration to tax as capital gain. The Assessing Officer may have dispute with respect to computation of such capital gain, he cannot simply dispute the fact that the assessee did file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the case is vitiated given that the assessee has filed her return of income disclosing the transaction of sale of immovable property for the specified consideration and offering the same to tax, there cannot be any reasons to believe that income has escaped assessment for the very same transaction the assumption of jurisdiction u/s 147 cannot be sustained and the subsequent proceedings are hereby directed to be set-aside. Also refer Shri Narain Dutt Sharma vs ITO (ITA No.203/JP/2017 dated 07.02.2018). 1.2.5 Also refer recent decision of Hon ble Delhi High Court in the case of Catchy Prop-Build(P.)Ltd v/s ACIT [2022] 145 taxman.com 510 (Delhi) dt. 17.10.2022. 1.2.6 In the case of Rames Bhojprasad Gupta vs. ITO ITA No. 476/SRT/2019, Feb 7, 2022 (2022) 64 CCH 0090 SuratTrib it has been held That Reassessment Reopening of assessment AO on basis of AIR information noted that assessee made deposit in his bank account in PNB AO recorded that in response to notice under section 148; assessee neither filed return of income nor responded Assessing Officer ultimately by-passing assessment order made addition on account of undisclosed cash deposits PNB' Assessing Officer also disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed without having valid jurisdiction, and therefore, same are bad-in- law and hence, same is quashed CIT(A) estimated income @ 51.84% on account of undisclosed sales Assessee claimed that he has shown book net book profit @ 11.45% and in subsequent year Assessing Officer has made addition @ 10% of net profit in assessment order passed under section 143(3 It is settled law that only profit element embedded in undisclosed sale or purchases is to be added not substantial part of transaction When in subsequent assessment year in AY 2011-12, AO himself made addition only @ 10% of net profit in assessment order passed under section 143(3); book profit shown by assessee @ 11.45% for year under consideration was reasonable and justified Therefore, assessee also succeeded on merit Assessee s appeal allowed. 1.2.7 The Hon ble Jurisdictional Raj. High Court in the case of ABDUL MAJEED vs. INCOME TAX OFFICER in D.B. Civil Writ Petition No. 7853/2022 Jun 29, 2022 (2022) 114 CCH 0245 RajHC (2022) 216 DTR 0305 (Raj), (2022) 327 CTR 0733 (Raj) it has been held Reassessment Issuance of notice under section 148 after proceedings under Section 148A (d) Writ petition seeks to assail correctness and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements showing all debit and credit transactions Total transactions, which have been shown, do not exceed amount as has been stated by petitioner-assessee While considering reply and bank statements, competent authority did not dispute transactions, which were placed before it along with reply filed by petitioner- assessee Therefore, very basis of initiation of proceedings that income exceeding more than Rs. 50,00,000/- had escaped assessment, was factually not correct But then, authority thereafter, without disputing transactions, proceeded to pass an order for issuance of notice under Section 148 Provisions contained in Section 148A (d) referred to hereinabove, clearly show that decision has to be taken on basis of material available on record Material available on record before authority did not disclose any cash deposit or any other transactions which can be said to have escaped assessment, which was more than Rs. 50,00,000 Had it been a case of opening of case within a period of three years having elapsed from end of relevant assessment year, order of authority could be well justified on touch stone of legal requirement as embodied under Section 148A However, in present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceeding on the basis of wrong or incorrect reason and wrong material are illegal and liable to be quashed. 2. No income escaped: further it is submitted that the notice u/s 148 can be issued only when there is any escape of income because S. 147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment for any assessment year, here the assessee has not escaped any income because the assessee has never deposited the undisclosed or unexplained money in the bank account. Which shows that there was no escapement of income by the assessee, as the assessee is having business and trading, the sale proceed has been deposited. Hence if there is neither the escapement of income by the assessee nor proved then the notice issued u/s 148 is invalid. Further only cash deposited in the bank account cannot confer the valid jurisdiction u/s 148 , as there was no nexus between the prima facie inference arrived in reasons recorded and information. The information is restricted only to the cash deposited in the bank account but there is no material tangible, credible, cogent and relevant material to form a reason to believe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to believe that any income chargeable to tax had escaped assessment for the assessment year. Notice issued by AO simply for his own verification and to clear his doubts and suspicions to re-examine the material which were already available on record at time of passing of t earlier assessment orders. The legislature under Section 147 has not clothed AO with such jurisdiction therefore the action could not be upheld in the background of facts of instant case. One more redeeming fact which had direct nexus with the subsequent re-assessment proceedings and ramification of the same had culminated into reassessment orders was the impugned order where AO rejected the objections submitted by Assessees pursuant to notice under Section 147/148. Order passed by AO in this behalf was not a speaking order which could not be sustained. In view of legal infirmity in the notice under Section 147/148 and laconic order of AO while rejecting objections Assessee the consequential assessment Orders were liable to be annulled.(para16). Prayer: Thus in view of the above facts, circumstances and the legal position of law the proceedings so initiated and assessment so passed may kindly be quashed. GOA-2: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Rs. 50,886.08. As he himself admitted that on 15.06.20211 opening balance was of Rs. 1,42,593.92 and cash received on 15.06.2011 of Rs. 6,520/-, thus total comes to Rs. 1,49,113.92 and an amount of Rs. 2,00,000/- was deposited on 15.06.2011 also vide his notice dt. 16.09.2019 (As annexure-A), hence the negative balance according to him was only of Rs. 50,886.08. This at the worst he should have made addition only to this extent. As per the notice, assessment order and the cash book the opening balance of Rs. 1,42,593/- on dt. 15.06.2011 is coming after cash deposits of Rs. 1,00,000/- on dt. 13.04.2011 and Rs. 80,000/-on dt. 10.05.2011 then how the addition of Rs. 1,80,000/- of earlier accepted cash deposits and sources can be added. Although there was no negative balance in support we have filed the summary of cash book vide PB58 which is clearing the entire position. 4.3 Interestingly the ld. CIT(A) has also confirmed the addition and action of the ld. AO without seeing all the above facts, material, evidences, which is clearly appearing from his order at page 13 wherein he only stated that Thus it was imperative on the appellant to explain the source of cash deposit. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness or trading is never doubted. Other side onus lay upon the AO has not discharged with the evidences. Merely raising doubt and suspicion on the recorded transactions cannot be taken a valid basis to disown his claim, which are based on documents/papers and records. Documentary evidences furnished clearly clarifies that on occasion at the time of deposit in bank account, assessee was having cash in hands form and cash sales of cash which is also not disputed. Entire transaction of withdrawal and deposit are duly reflected in the bank account of the assessee and are verifiable from relevant records. The ld. AO has not brought on record the evidence that the assessee has utilized these cash any other assets or any other mode. 8. When source of cash deposit is explained and it is evident that it is the own cash of the assessee from the sales which has been deposited in bank account, then there is no question of making addition under the unexplained money u/s 69A of the IT act 1961. On this preposition kindly refer Krishna Agarwal vs. ITO in ITA No. 53/JODH/2021 dt. Sep 7, 2021 (2021) 63 CCH 0048 Jodh Trib(Supra). 9. Here we would like to submit that while doing a judicious act by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded stated the fact that the assessee has not filed ITR. So far as the merits of the case, assessee has filed the details of the sale made by the assessee, the source of deposit of cash is duly supported by sale and therefore, separate addition of deposit the cash into bank account cannot be made. The ld. AR of the assessee vehemently submitted that utmost the amount of Rs. 50,886.08/- should be added as contended by the ld. AO in para 2 of annexure to the notice dated 16.09.2019. 13. Per contra, the ld. DR relied upon the order of AO as well as of ld. CIT(A). The ld. DR also argued that the addition has been made by the ld. AO after detailed examination of the records so reproduced by the assessee and as it is alternatively pleaded by the Counsel that the addition of Rs. 50,886.08/- be made as the records so produced are not complete and correct and therefore, she supported the order of ld. CIT(A). 14. We have heard the rival contentions and perused the material placed on record. The bench noted that in this case the addition of Rs. 3,80,000/- made. The assessee contended that the deposit of cash is sourced from the sales that has been booked for which the profit is also tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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