OLIVIA MIRANDA, MOODBIDRI V. Income Tax Officer, Ward-2(2), Mangaluru

ITA 1151/BANG/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 0146 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 22-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 10-06-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R. GHALE; STANDING COUNSEL
• Assessee Lawyers: SRIRAM V. RAO
• Section: 144; 142(1); 69A; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.1151/Bang/2024 Assessment year : 2017-18 Mrs. Olivia Miranda, 2-48A, Karnalgudde Mantrady, Mantrady Post, Moodbidre – 574 236. PAN : CRZPM 1742B Vs. The Income Tax Officer, Ward 2(2), Mangalore. APPELLANT RESPONDENT Appellant by : Shri Sriram V. Rao, CA Respondent by : Shri Ganesh R. Ghale, Standing Counsel. Date of hearing : 23.08.2024 Date of Pronouncement : 03.09.2024 O R D E R Per Laxmi Prasad Sahu, Accountant Member This appeal is filed by the assessee against order dated 19.03.2024Na of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18. 2. The sole and substantive issue raised by the assessee in grounds is related to the addition made u/s. 69A on cash deposits during the demonetisation period as per section 115BBE of the Act. ITA No.1151/Bang/2024. Page 2 of 7 3. Briefly stated the facts of the case are that as per information available the assessee deposited cash of Rs.12,50,000 in her bank account held with Syndicate Bank, Naravi Branch, Belthangady during the demonetisation period between 08.11.2016 to 30.12.2016. The assessee did not file return of income. Notice u/s. 142(1) was issued to the assessee on 09.03.2018 and 18.04.2018 for filing return of income and assessee filed return of income on 01.05.2019. The AO held that return of income filed in response to notice u/s. 142(1) of the Act is invalid and considered as non est. 4. The assessee filed letter dated 27.09.2019 stating that she has gross agricultural receipt of Rs.10,56,321 out of 4.4 acres of land owned in Mantrady village, D.K. and furnished RTC copies, quantitative details of yield. No books of accounts are maintained and the return is filed on presumptive basis. With regard to cash deposits she offered explanation that cash savings of entire life is Rs.7,85,000 and current year agricultural income till 10.11.2016 is Rs.4,65,000. It was submitted that she is living in an area where banking facility is not available. The AO issued show cause notice for assessment u/s. 144 and called for details of agricultural income during the previous years and assessee stated that she has not maintained any details. The AO noted that assessee is not able to substantiate the source of cash deposits of SBNs of value of Rs.12,50,000 and hence treated as unexplained money u/s. 69A and taxed as per section 115BBE of the Act in the assessment u/s. 144 of the Act. Aggrieved from the above ITA No.1151/Bang/2024. Page 3 of 7 order, the assessee filed appeal before the First Appellate Authority (FAA). 5. The ld. FAA dismissed the legal ground raised by the assessee and on merits he noted that the cash deposits during the demonetisation period was not supported by any corroborative evidence and assessee has not maintained books of accounts. Accordingly he dismissed the appeal. Aggrieved, the assessee is in appeal before the ITAT. 6. At the outset, there is a delay of 24 days in fling the appeal before the ITAT for which the assessee has stated the reason as negligence on the part of tax practitioner. She is a senior citizen aged about 72 years now and not well versed with the income tax proceedings. On going through the reasons for condoning the delay, we note that there are sufficient reasons for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the Tribunal is condoned. 7. The ld. AR submitted that the AO was not justified in completing the assessment u/s. 144 of the Act. The assessee filed return in ITR-2 on 1.5.2019 online and it was specifically mentioned that the return was filed in response to notice dated 9.3.2018 u/s. 142(1) and therefore the return was a legitimate return. The online portal has accepted the return and the CPC received it on 5.5.2019. Therefore the order passed u/s. 144 treating the return as non est is not sustainable. ITA No.1151/Bang/2024. Page 4 of 7 8. The ld. AR further submitted that the during the course of assessment proceedings, the documents of RTC regarding agricultural land ownership was given to the AO and it is clear that there was sales realisation from agricultural produce. The AO has simply stated that the assessee has not substantiated the agricultural income. The ld. AR submitted that in the case of assessee compulsory maintenance of books of account are not applicable. If the AO had any doubts regarding crops as declared in the RTC, he could have rejected the document. He further submitted that the assessee is a 70 years old lady (72 now) and there is no banking facility, therefore the previous years sales and net profit from agricultural activity were kept in cash. Her husband demised in 2011 and since then she is managing the entire agricultural activity. The agricultural crops grown are coconut, arecanut, banana and pepper and the details were submitted during assessment proceedings and placed at pages 50-55 of PB. Reply was also submitted by the assessee against the final show cause notice issued by the AO. 9. On the other hand, the ld. DR relied on the orders of lower authorities and submitted that the assessee has not filed return of income within the due date specified in the notice u/s. 142(1) and time was granted to the assessee upto 30.4.2019. It is discretionary power of AO for granting time u/s. 142(1) in the notice itself. Therefore the AO has not issued any notice granting time. However the assessee fled the return on 1.5.2019. Therefore the return is non est in the eyes of law. In respect of agricultural income of Rs.7,85,000 the assessee has ITA No.1151/Bang/2024. Page 5 of 7 not given any single piece of evidence and only written submissions and RTC were filed. Therefore it cannot be said that assessee had sufficient cash for deposit during the demonetisation period with cogent material. 10. Considering the rival submissions, we note that notice u/s. 142(1) was issued to the assessee observing that during the demonetisation period assessee has deposited Rs.12,50,000 in her bank account and return of income was not filed. Subsequent notice u/s. 142(1) was issued granting time to file the return. The objection raised by the assessee is regarding best judgment assessment and treating the return as non est. The assessee did not file the return in response to notice u/s. 142(1) till 30.4.2019. We are in agreement with the ld. DR on this point and we reject the grounds of the assessee. 11. The assessee has declared gross total income of Rs.10,56,321 and the net agricultural income is Rs.7,70,690. We note that during the assessment proceedings, the assessee filed details of agricultural income and RTC copies of agricultural land owned, quantitative details of yield. The assessee has 6.77 acres of land and crops grown are coconut, arecanut, pepper and banana. As per the submissions of assessee, her husband demised in 2011, since then she was managing the entire agricultural activity. The nature of crops grown are mentioned in the RTC and the AO has not disputed it. The assessee submitted that the net agricultural income was Rs.7,70,690 out of which sum of Rs.4,65,000 was earned upto 10.11.2016. Considering ITA No.1151/Bang/2024. Page 6 of 7 the agricultural land holding and nature of crops grown and sold by the assessee, we hold that agricultural income available with assessee of Rs.4,65,000 is justified. 12. Further in respect of savings of entire life of Rs.7,85,000 the AO noted that assessee has not produced any books of accounts. The age of assessee is 70 years (72 now). After her husband’s demise, the assessee was managing the agricultural activities. As per provisions of the Act u/s. 44A, the assessee is not required to maintain books of accounts. We note that the assessee has no banking facility available. Therefore, from the nature of crops grown the accumulated cash balance in the hands of the assessee for deposit of Rs.7,85,000 is not on the higher side and justified. Hence, we delete the addition made by the AO and sustained by the ld. FAA. 13. In the result, the appeal by the assessee is partly allowed. Pronounced in the open court on this 03 rd day of September, 2024. Sd/- Sd/- ( BEENA PILLAI ) (LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated, the 03 rd September, 2024. /Desai S Murthy / ITA No.1151/Bang/2024. Page 7 of 7 Copy to: 1. Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore.