ANISH KUMAR JAISWAL,DEWAS V. INCOME TAX OFFICER , DEWAS

ITA 686/IND/2024

AI Insights

The case involves Anish Kumar Jaiswal, the appellant, who contested the legality of a notice issued under Section 148 of the Income Tax Act, which led to a reassessment of his income for the Assessment Year 2010-11. The Income Tax Officer (ITO) had assessed Jaiswal's income at Rs. 22,18,408, citing non-compliance with previous inquiries about unexplained cash deposits. Jaiswal appealed against the reassessment order, which was upheld by the CIT(A). Subsequently, he approached the Income Tax Appellate Tribunal, arguing that the reassessment was based on incorrect assumptions and that he had indeed filed his tax return for the relevant year, which was acknowledged by the department through a refund.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 303011 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORTHEREVENUESTATEDTHATSINCETHETWOLETTERS; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIRAM GILDA; VIRTUEOFWHICHTHEASSESSEEWAS
• Keywords: Set aside; Reassessment proceedings; Reason to believe
• Section: 148; 144; 250; 13; 246A

Judgement Text

"Page 1 of 13 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER ITA No.686/Ind/2024 (AY: 2011-12) Anish Kumar Jaiswal, Main Road, Double Chowki, Dewas (PAN: AGXPJ7448N) बनाम/ Vs. ITO, NFAC, Delhi (Appellant) (Respondent) Assessee by Shri Ram Gilda, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 08.04.2025 Date of Pronouncement 23.04.2025 आदेश/ O R D E R Per Paresh M Joshi, J.M.: This is an appeal filed by the assessee Under Section 253 of the Income Tax Act (hereinafter referred to as the “Act” for sake of brevity) before this Tribunal. The assessee is aggrieved by order bearing Number ITBA/NFAC/S/250/2024-25/ 1068026051(1) dated 27.08.2024 of Ld. CIT(A) passed u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2010-11 and the corresponding previous year period is from 01.04.2009 to 31.03.2010. Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 2 of 13 2. FACTUAL MATRIX 2.1 That as and by way of order dated 13.11.2017 the income of the assessee was computed at Rs.22,18,408/- in terms of Section 144 of the Act for Assessment Year 2010-11. The said order dated 13.11.2017 is hereinafter referred to as the “Impugned Assessment order”. 2.2 That the assessee being aggrieved by the “impugned assessment order” preferred a first appeal before Ld. CIT(A) in terms of Section 246A of the Act and who by the “Impugned Order” has dismissed the appeal of the assessee on the grounds specified therein. 2.3 That the assessee being aggrieved by the “Impugned Order” has preferred this second appeal before this Tribunal against the “Impugned Order” and has raised following grounds of appeal against the “Impugned Order” in Form No.36 which are as under:- “1. That the notice issued u/s 148 of the Act is illegal, wrong, without Jurisdiction and authority of law. 2. That the order passed u/s 144 of the Act is illegal, wrong and bad-in- law. 3. That the addition made of Rs.22,18,408/- is illegal, wrong and bad- in-law. Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 3 of 13 4. That the appellant craves to add, alter, amend and/or withdraw any ground of appeal on or before the hearing of appeal.” 3. Recording of Hearing 3.1 The hearing in the matter took place before this Tribunal on 08.04.2025 when Ld. AR for and on behalf of the assessee interalia contended before us that the “Impugned order” is illegal, bad in law and not proper. It was prayed that the same should be set aside by this Tribunal in exercise of its appellate power conferred upon them under the Act. 3.2 At the outset and threshold while maintaining the fact that the “Impugned Assessment Order” is u/s 144 of the Act but the notice u/s 148 of the Act which triggered the Reassessment proceeding in the instant case was indeed illegal, wrong, without jurisdiction and the authority of law. The Ld. AR invited our attention to page-4 of the paper book which contains “Reasons to believe” that income chargeable to tax has escaped assessment. The Ld. AR then read out whole of page 4 of the paper book and contended that in the “reasons to believe” it is recorded that :- Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 4 of 13 (i) Assessee did not file his return of income in the Year 2010-11. (ii) That information available shows that the assessee had deposited cash in the saving bank account amounting to Rs.22,18,408/- during the Financial Year 2009-2010 relevant to Assessment Year 2010- 2011. (iii) That the department made a prior enquiry too by sending letters dated 15.05.2016 and 16.01.2017 to the assessee by virtue of which the assessee was asked to furnish the information with regard to source of cash deposits made in the saving bank account. That the assessee made no compliance in response to the aforesaid letters and therefore Ld. Assessing Officer was satisfied that the assessee has no explanation to offer and on account of such failures the assessee has failed to offer the income for taxation to the extent of Rs.22,18,408/- which has escaped assessment. Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 5 of 13 3.3 Basis above reasons on page 4 of paper book it was also contended by the Ld. AR that though the database of the department showed information but department never carried out any verification of the same from respective bank of the assessee which verification was must to arrive at a satisfaction that indeed income had escaped assessment to the above extent (supra). It was therefore submitted that the Ld. A.O has proceeded wrongly basis some information which was not verified by the Ld. A.O while these arguments were canvassed by Ld. AR, the Ld. DR for the Revenue stated that since the two letters issued to the assessee (supra) were not replied to the Ld. A.O his satisfaction is reasonable just and fair. It cannot thus be faulted with at all. The Ld. A.O therefore has met the requirement of law u/s 147/148 of the Act. The Ld. AR during the course of the hearing contended that while framing the “Impugned Assessment Order” the return of income for Assessment Year 2010-11 which is at page 1 to 3 of the paper book along with computation of income was completely overlooked/ignored. The Ld. AR therefore contended that in the impugned assessment order the returned income details are just not appearing at all. Hence both reasons Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 6 of 13 recorded and impugned assessment order are all wrong illegal and not proper. It was also contended that the assessee was in the business of distribution of sim and recharge vouchers on behalf of IDEA Cellular during the year under consideration. The returned income was accepted by the department and even refund of taxes paid were made to the assessee on 22.01.2011. In so far as merits of the case is concerned where there is addition of Rs.22,18,408/- which was cash deposited in Narmada Jhabua Gramin Bank, it was contended that amount deposited was in small lots. This small lots of amounts deposited are nothing but collection of “Sim sale and recharge vouchers”. Payments to IDEA Cellular has been made from this account. The maximum balance during the year under consideration is only Rs.1,23,130/- on 19.03.2010 and that total income declared during the year under consideration is Rs.2,84,674/- (ROI). The reliance is placed on page 8 to 11 of paper book where bank account of Narmada Jhabua Gramin Bank Account statement is enclosed. It is stated that in so far as Axis Bank Account is concerned the same was opened on 02.10.2010 whose copy are at page 13 to 18 of paper book filed. It was stated that on Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 7 of 13 27.04.2009 bank account with Narmada Jhabua Gramin Bank was opened with cash deposit of Rs.1000/-. The grand total of Rs.23,89,364/- appears at page 11 of bank statement and by balance is of Rs.5,196/-. The total withdrawal is Rs.23,84,168/-. The withdrawal is made by DD as payment made to IDEA Cellular. Deposit is on account of sale of Sim & Recharge Voucher the business of the assessee. Per contra Ld. DR contended that the bank statement simply shows “DD” and to whom this amount is paid is not at all stated in the bank account and a presumption cannot be made that payments have gone to IDEA Cellular. In brief he contended that source of cash remains undisclosed and so also payment as and by way of DD. Concluding Ld. DR stated that “Impugned Assessment Order” is rightly upheld by “Impugned Order” of Ld. CIT(A). Impugned order is reasonable, fair and just. It is based on material on record. In rejoinder the Ld. AR contended that the bank account is in Narmada Jhabua Gramin Bank which is a rural bank where accounts are maintained manually and same is in rural set up. Minute details of DD as to whom it was paid are not stated. Over all Ld. AR contended that a decision should be taken by this Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 8 of 13 Tribunal as Assessment Year is 2010-11 and long time has elapsed and suggestion of DR to remand matter back to Ld. AO or CIT(A) would not serve any useful purpose as assessee is a small businessman. Hearing was thereafter concluded with reliance being placed on judgments in paper book which Ld. DR contended that same are on different set of facts then the instant facts of the case and hence distinguishable. Ld. DR has fully supported order of CIT(A) whereas by placing reliance on assessment order dated 30.12.2013 for Assessment Year 2011-12 Ld. AR has attempted to draw mileage with regard to business of assessee of sale of sim card and recharge vouchers. 4. Observations,findings & conclusions. 4.1 We now have to decide the legality, validity and proprietary of the “Impugned Order” basis records of the case and contentions canvassed before us. 4.2 We have minutely perused records of the case and have heard the rival submissions. 4.3 We observe that Ld. AR has attempted to argue legal points as well as merits of the case. We therefore examine legal point Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 9 of 13 first which is that notice issued u/s 148 of the Act is illegal, wrong, without jurisdiction and authority of law. The reasons are as under as per paper book on page 4 which we reproduce below:- “Reasons to believe that income chargeable to tax bus escaped form assessment 1. Name and address of the assessee Anish, S/o Champalal Jaiswal, Double Choki, Dist. Dewas 2. Permanant Account Number (PAN) -- 3. Assessment Year 2010-11 The assessee did not file his return of income for the assessment year 2010-11. The AIR information available shows that the assessee had deposited amounting to Rs. 2218408/- during the financial year 2009-10 relevant to the A.Y 2010-11. Vide this office letter dated 15/09/2016 and 16/01/2017 assessee was asked to furnish information mentioned therein and explain the source of cash deposited account. No compliance was made by the assesses in response to the aforementioned letters. Considering that the assessee has nothing to say in the matter in order to explain the source of cash deposited in his saving bank account, I am satisfied that the assesse had failed to offer the income for taxation to the above extent. In view of the above, I have reason to believe that the income of Rs.2218408/- chargeable to tax has escaped from assessment within the meaning of 147 of the Income Tax Act, 1961. Accordingly, notice u/s 148 is to be issued for reopening the case u/s 147 after obtaining approval u/s 151 from the Pr. Commissioner of Income Tax, Ujjain. Sd/- Income Tax Officer-I Dewas Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 10 of 13 4.4 Basis above reasons we notice that it is wrongly stated that assessee has not filed return of income for Assessment Year 2010-11, whereas the assessee has placed on record of this Tribunal photo copy of return for Assessment Year 2010-11 on page 1 to 3 of paper book of the assessee wherein gross total income is Rs.2,84,674/- and total income is Rs.1,84,670/-, it is dated 04.08.2010. This fact of filing of return is not disputed by Ld. DR in any manner whatsoever. We therefore hold that by virtue of page 1 of paper book there is indeed a return of income for Assessment Year 2010-11, on record Ack No:- 146892260040810. We further observe and hold that basis such return of income bearing above Ack No. on 22.01.2011 a refund has been paid to the assessee page 7 of paper book under Ack No.:- 146892260040810. In view of this factual matrix which is totally undisputed. It is absolutely wrong and incorrect to state in the “reasons” that the assessee did not file his return of income for the Assessment Year 2010-11. Moreover department has paid refund on this return of income. There is thus total non application of mind in recording reasons for purposes of Section 148 of the Act. It is also pertinent to mention that in the Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 11 of 13 “Impugned Assessment Order” dated 13.11.2017 there is not even a whisper about return of income (supra). The entire cash deposit of Rs.22,18,408/- is added without taking into consideration ROI filed. We therefore have no hesitation to hold that “Reasons” and so also “Impugned Assessment Order” dated 13.11.2017 are illegal and bad in law. Since foundational grounds of reasons and impugned assessment order perse are held by us to be illegal and bad in law we are of the considered view that there is no need to further examine other legal grounds and so also merits of the case as once the foundational facts are wrong, illegal and bad in law subsequent proceedings topples down. The Ld. AR has raised a grievance and Ld. DR has no answer to ground raised by Ld. AR. Under these circumstances at the outset and threshold the assessee succeeds. We accordingly set aside the impugned order as on foundational ground canvassed by Ld. AR, the impugned order has no legs to stand. Needless to state that “Reasons” basis which Reassessment proceedings commenced have been held by us to be perse wrong we hold that Reassessment proceeding triggered are all wrong and illegal. Assessee thus succeeds on this limited Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 12 of 13 ground as reasons recorded for triggering proceedings u/s 147/148 itself is bad and shows complete non application of mind on part of Ld. A.O. The assumption of jurisdiction to initiate proceedings u/s 144/148 itself is wrong and illegal as held by us (supra). We have no hesitation to hold that Ld. A.O has not applied his mind to the facts of the case in hand and basis AIR has shot off notice u/s 148 without even caring to verify whether ROI is filed or not. We hold exercise of such quasi judicial power to be wholly without jurisdiction and/or in irregular exercise of jurisdiction consequently Null and Void abinitio. 5. Order 5.1 In the premises we set aside the Impugned Order. 5.2 In result Appeal of the assessee is allowed. Order pronounced in open court on 23.04.2025. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक/ Dated : 23/04/2025 Dev/Sr. PS Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11 Page 13 of 13 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "