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TMI Blog2025 (1) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) has erred in law and on facts of the case in confirming action of the Ld.AO in initiating penalty proceedings u/s.271AAC of the Act. 05. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 06. The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 3. The facts of the case are that the assessee filed return of income on 10.11.2017 declaring total income of Rs.2,09,270/-. The case has been taken up for complete scrutiny by the revenue authorities and addition of Rs.68,50,000/- has been made on account of cash deposits in bank account. 4. Aggrieved, assessee filed an appeal before the Ld.CIT(A), who has affirmed the order of the Assessing Officer (AO) by observing as under: "6.3 I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low statement from the year 2012-13 to 2015-16 to substantiate the cash deposits made during the demonetization period and argued that there has been a closing cash balance of Rs.1,82,11,228/- which has been deposited during the Financial Year (FY) 2016-2017.The cash flow statement prepared by the assessee is as under: FY Opening Cash Balance Cash Inflows Cash Outflows Closing Cash Balance Cash withdrawals from bank Agricultural Income (as per ITR) Other cash inflows Cash deposited in bank Agricultural expense (as per ITR) Other cash outflows 2012-13 2,32,187 3,94,99,941 15,74,800 - 1,51,74,500 5,70,424 73,50,776 1,82,11,228 2013-14 1,82,11,228 14,27,439 19,38,119 13,00,000 3,14,000 7,75,247 2,50,000 2,15,37,539 2014-15 2,15,37,539 23,73,146 24,42,167 7,40,790 89,42,140 9,18,110 10,27,894 1,62,05498 2015-16 1,62,05,498 7,85,000 15,95,066 7,31,000 96,05,650 5,90,330 12,21,998 78,98,586 4,40,85,526 3,40,36,290 7. The Ld.Counsel for the assessee submitted that there has been cash withdrawal from the bank for FY 2012-13 to the tune of Rs.3.94 crores and hence no addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts withdrawn as cash in hand. We have also gone through the bank account for all the years with regard to the cash deposits and withdrawals which pertains to very short period of duration in the year. We have also given consideration to the argument of the Ld.DR to remand the matter to examine the opening balance of the cash in hand perpetually shown by the assessee. The assessee since expired and the case was represented through legal heir. We have given our considerable thought about the entire fact and find that no useful purpose would be served to enquire into the amounts deposited or withdrawn 12 years back. At the same time, the entire cash deposits also cannot be considered as undisclosed income keeping in view the earning of income to the tune of Rs.1.8 crores by the assessee and it is also a fact that the assessee had agricultural income to the tune of Rs.10 lakhs. The assessee has also received cash as part of sale consideration pertaining to the agricultural land. We are not in agreement with the cash flow submitted by the assessee as cash flow for the period from 10.12.2012 to 29.03.2012 cannot be accepted as the same cash was deposited in the year 2016 in the un-reb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stwhile rate of tax 30% only is applicable. But the contention of the revenue is that the amendment was with effect from 01.04.2017 and hence the same is applicable for the financial year 2016-2017 and the assessment year 2017-2018. Further the amendment to section 115BBE is directly related to demonetization which would be evident from objects and reasons for such amendment. In order to consider the same, the objects and reasons of Taxation Laws (Second Amendment) Bill 2016 is extracted hereunder: Press Information Bureau Government of India Ministry of Finance 28-November-2016 15:56 IST Taxation Laws (Second Amendment) Bill, 2016 introduced in Lok Sabha; A scheme namely, Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) proposed in the Bill. Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes of existing series of denomination of the value of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er assets TAX (Section 115BBE) Flat rate of tax @30% surcharge + cess (No expense, deductions, allowed) set-off is TAX (Section 115BBE) + Flat rate of tax @60% surcharge @25% of tax (i.e 15% of such income). So total incidence of tax is 75% approx. (No expense, deductions, setoff is allowed). PENALTY (Section 271AAC) If Assessing Officer determines income referred to in section 115BBE, penalty @10% of tax payable in addition to tax (including surcharge) of 75%. Penalty for search seizure cases Penalty (271AAB) (i) 10% of income, if admitted. returned and taxes are paid (ii)20% of income, if not admitted but returned and taxes are paid (iii)60% of income in any other case Penalty (271AAB) (i) 30% of income, if admitted, returned and taxes are paid not (ii) 60% of income in any other Taxation Investment Regime and for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) New Taxation and Investment Regime Undisclosed income in the form of cash & bank deposit can be declared: (A) Tax, Surcharge, Penalty payable Tax @ 30% of Income declared Surcharge @33% of Penalty @10% of Income declared Total @ 50% of Income (approx.) (B) Deposit 25% of dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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