Smt. Suvarna Arun Desai, Satara V. Income-tax Officer,

ITA 1344/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0506 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice
• Section: 234B; 147; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.1344/PN/2014 / ASSESSMENT YEAR : 2005-06 SMT. SUVARNA ARUN DESAI, 455/217, MUKTAGIRI BHAVAN, SADAR BAZAR, DIST. SATARA. PAN : ALRPD4335P . / APPELLANT V/S ITO (CIB), KOLAHPUR . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI P.L. KUREEL / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 28-03-2011 OF THE CIT(A) CENTRAL, PUNE RELATING T O ASSESSMENT YEAR 2005-06. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ACCEPTING THE GROUND OF APPEAL BEFORE HIM THAT THE IMPUGNED ASSESSMENT WAS NOT FINALIZED AS ON 31-12-2007 IN THE ABSENCE OF ANY EVIDENCE THAT I T WAS HANDED OVER TO THE POSTAL AUTHORITY ON OR BEFORE 31-12-2007 THAT BE ING THE LAST DAY OF THE LIM I TATION. THE LD. CIT(A) ERRED IN NOT HOLDING THAT ASSE SSMENT WAS BARRED BY LIMITATION. IT BE HELD ACCORDINGLY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ASSESSMENT CO MPLETED BY THE A. O. EXPARTE UNDER S. 144 OF THE ACT AS IT WAS SO MAD E VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. IT BE SET ASIDE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W AND AS THE RETURN OF INCOME FILED BELATEDLY ON 04-12-2007 IT F ACTUALLY MEANS THE RETURN OF INCOME WAS BEFORE THE A. O. BEFORE EX PATE ASSESSMENT WAS / DATE OF HEARING :08.11.2016 / DATE OF PRONOUNCEMENT:09.11.2016 2 ITA NO.1344/PN/2014 FRAMED U/S 144 OF THE ACT. IN SUCH CIRCUMSTANCES IT IS SE TTLED LAW THAT A. O. OUGHT TO HAVE I NITIATED ACTION UNDER S. 147 AND WAS NOT ENTITLED TO PASS EXPARTE ORDER UNDER S. 144 OF THE ACT. THE LD. C !T(A) ERRED IN CONFIRMING THE SAID ASSESSMENT. IT BE SET ASIDE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION O F RS. 14,00,000/- MADE BY THE A. O. COMPRISED IN THE DEPOSITS MADE IN TH E BANK ACCOUNT. THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT. THE ASSESSEE HAS NO SOURCE OF INCOME OTHER THAN AGRICULTURAL INCOME. THE DEPOSITS IN THE BANK ACCOUNT WERE OUT OF AGRICULTURAL INCOME ONLY. THE LD. C!T(A) HAS CONFIRMED THE ADDITION OF RS. 14,00,000/- BEING DEPO SITS IN THE BANK ACCOUNT OUT OF AGRICULTURAL INCOME ONLY WHICH IS IMP ERMISSIBLE IN LAW. ALTERNATIVELY THE DEPOSITS IN BANK ACCOUNT CANNOT BE SUBJECTED TO INCOME-TAX UNDER S. 69 OF THE ACT. IT BE DELETED. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS NOT JUSTIFIED. 6. THE APPELLANT CRAVES/LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUN D OF APPEAL NO.1, 2 & 3 FOR WHICH THE LD. DEPARTMENTAL REPRESE NTATIVE HAS NO OBJECTION. ACCORDINGLY, THE ABOVE GROUNDS ARE D ISMISSED AS NOT PRESSED. 4. GROUND OF APPEAL NO.4 RELATES TO THE ADDITION OF RS.14,00,000/- MADE BY THE ASSESSING OFFICER WHICH HAS BEE N UPHELD BY THE CIT(A). 5. FACTS OF THE CASE, IN BRIEF, ARE THAT ON THE BASIS OF AI R INFORMATION RECEIVED U/S.285BA OF THE ACT THAT THE ASSESS EE HAS MADE DEPOSITS OF RS.14 LAKHS IN CASH IN HER SAVINGS BANK A CCOUNT, NOTICE U/S.142(1) WAS ISSUED TO THE ASSESSEE CALLING FOR THE RETURN OF INCOME FOR THE A.Y. 2005-06. DESPITE SERVICE OF NOTICE ON T HE ASSESSEE ON 31-08-2007 THERE WAS NO COMPLIANCE FROM THE SIDE OF T HE ASSESSEE FOR WHICH ANOTHER NOTICE WAS ISSUED. SINCE THER E WAS NON- COMPLIANCE AGAIN, THE ASSESSING OFFICER MADE ADDITION OF RS.14 LAKHS 3 ITA NO.1344/PN/2014 BEING CASH DEPOSITED IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED INVESTMENT. 6. IN APPEAL THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMIT TED THAT THE ASSESSEE IS HAVING ONLY AGRICULTURAL INCOME AND IS NOT ENGAGED IN ANY BUSINESS. THE ENTIRE DEPOSIT OF RS.14 LAKHS IN THE BA NK ACCOUNT IS OUT OF THE AGRICULTURAL LAND OWNED BY THE FAMILY. HE SU BMITTED THAT ALTHOUGH THE ENTIRE DEPOSIT IS OUT OF AGRICULTURAL INCO ME THE SAME WAS NOT PROPERLY APPRECIATED BY THE LOWER AUTHOR ITIES. SINCE THE CASE WAS NOT PROPERLY HANDLED BEFORE THE CIT(A) AND THERE WAS NON-COMPLIANCE BEFORE THE ASSESSING OFFICER FOR WHICH HE HAS PASSED EXPARTE ORDER, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS IN A POSITION TO EXPLAIN TH E ENTIRE SOURCE OF RS.14 LAKHS WHICH IS OUT OF AGRICULTURAL INCOME ONL Y AND THEREFORE IS EXEMPT FROM TAX. 8. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEA VILY OPPOSED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT DESPITE REPEATED OPPORTU NITIES GIVEN BY THE ASSESSING OFFICER THE ASSESSEE DID NOT APPEAR BEFORE HIM TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.14 LAKHS. BEFORE CIT(A) A LSO THE ASSESSEE HAS NOT SUBSTANTIATED WITH EVIDENCE REGARDING THE SOURCE OF DEPOSIT OF RS.14 LAKHS IN THE SAVINGS BANK ACCOUNT. UNDER THESE CIRCUMSTANCES, THE ORDER OF THE CIT(A) SUSTAINING THE ADDIT ION MADE BY THE ASSESSING OFFICER SHOULD BE UPHELD. 4 ITA NO.1344/PN/2014 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND ON THE BASIS OF AIR INFORMATIO N NOTICE U/S.142(1) WAS ISSUED TO THE ASSESSEE. HOWEVER, THERE W AS NON- COMPLIANCE FOR WHICH THE ASSESSING OFFICER ISSUED ANOTHER N OTICE CALLING FOR CERTAIN DETAILS. STILL THERE WAS NO COMPLIANCE FOR W HICH THE ASSESSING OFFICER PASSED THE ORDER U/S.144 MAKING ADD ITION OF RS.14 LAKHS AS UNEXPLAINED DEPOSIT IN THE SAVINGS BANK ACC OUNT. THE ASSESSING OFFICER HAS ALSO DID NOT ALLOW THE BASIC EXEM PTION LIMIT WHILE COMPLETING THE ASSESSMENT U/S.144 OF THE I.T. A CT. I FIND IN APPEAL, IN ABSENCE OF ANY SATISFACTORY EXPLANATION GIVEN BY THE ASSESSEE REGARDING THE SOURCE OF DEPOSIT, THE CIT(A) UPH ELD THE ADDITION MADE BY THE ASSESSING OFFICER. 10. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSES SEE THAT THE ENTIRE DEPOSIT OF RS.14 LAKHS IN THE BANK ACCOUNT IS OUT OF AGRICULTURAL INCOME OF THE FAMILY OF THE ASSESSEE WHICH HAS BEEN DEPOSITED IN HER BANK ACCOUNT. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS IN A POSITION TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.14 LAKHS. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN TH E INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE MATTER BACK T O THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE ONE MORE OPPORTU NITY TO THE ASSESSEE TO SUBSTANTIATE HER CASE. THE ASSESSEE IS ALSO DIRECTED TO FILE THE EXTENT OF LAND HOLDING OF THE FAMILY MEMBERS AND THE BANK ACCOUNT OF ALL THE FAMILY MEMBERS DURING THAT PERIOD. THE ASSESSEE IS DIRECTED TO SUBSTANTIATE HER CASE WITH NECESSARY EVID ENCE TO THE SATISFACTION OF THE ASSESSING OFFICER THAT THE DEPOSIT IN THE SAVINGS BANK ACCOUNT IS OUT OF AGRICULTURAL INCOME ONLY AND NOT O UT OF ANY 5 ITA NO.1344/PN/2014 BUSINESS ACTIVITY. THE ASSESSING OFFICER SHALL DECIDE THE ISSU E AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. GROUND OF APPE AL NO.4 BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND OF APPEAL NO.5 RELATES TO LEVY OF INTEREST U/S.23 4A, 234B AND 234C. AFTER HEARING BOTH THE SIDES, I AM OF THE OPINION THAT LEVY OF INTEREST UNDER THE ABOVE SECTIONS ARE MAND ATORY AND CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE ABOVE GROUND IS DISMISSED. GROUND OF APPEAL NO.6 BEING GENERAL IN NATURE IS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09-11-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 09 TH NOVEMBER, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , $ % / TRUE COPY // // TRUE COPY // &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) CENTRAL, PUNE 4. THE CIT-III, PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.