SMT. NAMRATA MEWARA, GURGOAN V. INCOME TAX OFFICER, WARD-1, KISHANGARH

ITA 1420/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3452 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHARMA ACIT DHK
• Keywords: Reasonable cause; Tangible material; Corroborative evidences; Condonation of delay; Set aside
• Section: 69A; 139(1); 147; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 1420/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. NAMRATA MEWARA (SMT. RAGINI MEWARA) B-97, SUSHANT APPARTMENTS, SUSHANT LOK PHASE-I, GURGAON. CUKE VS. THE ITO, WARD-1, KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ALLPM2529C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI ABHISHEK SHARMA (ACIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/10/2019 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/11/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 17.09.2018 OF LD. CIT(A), AJMER FOR THE ASSESSMENT YEAR 2010-11. 2. THERE IS DELAY OF 3 DAYS IN FILING THE PRESENT A PPEAL THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY WHICH IS SUPPORTED BY THE AFFIDAVIT. 3. I HAVE HEARD THE LD. AR AS WELL AS LD. DR AND PE RUSED THE CONTENTS OF APPLICATION AND AFFIDAVIT FILED BY THE ASSESSEE FOR SEEKING CONDONATION OF DELAY OF 3 DAYS IN FILING THE PRESENT APPEAL. TH E LD. AR OF THE ASSESSEE ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 2 HAS EXPLAINED THAT THE LAST DATE OF FILING THE APPE AL WAS 07.12.2018 AND THE ASSESSEE IS RESIDING IN GURGAON AND THE APPEAL PAPERS WERE RECEIVED IN THE OFFICE OF AUTHORIZED REPRESENTATIVE THROUGH COURIER ONLY ON 07.12.2018 IN EVENING THEREFORE, THE APPEAL COULD B E FILED ON 10.12.2018 AS 08.12.2018 & 09.12.2018 WERE CLOSED HOLIDAYS BEI NG SATURDAY & SUNDAY. THUS, THE LD. AR HAS SUBMITTED EFFECTIVELY THERE IS ONE DAY DELAY IN FILING THE PRESENT APPEAL. HE HAS THUS, SUBMITTE D THAT DUE TO THE DELAY IN RECEIPT OF PAPERS THROUGH COURIER THE APPEAL COU LD NOT BE FILED ON 07.12.2018 AND THEREFORE, IT WAS FILED ON THE NEXT WORKING DAY I.E. 10.12.2018. THE REASONS EXPLAIN BY THE ASSESSEE ARE FOUND TO BE REASONABLE AND ACCORDINGLY I AM SATISFY THE ASSESSE E WAS HAVING A REASONABLE CAUSE FOR A DELAY OF 3 DAYS IN FILING TH E PRESENT APPEAL HENCE, THE SAME IS CONDONED. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, TH E NOTICE ISSUED U/S 147 AND THE CONSEQUENT ORDER PASSED U/S 144/147 IS ILLEGAL & BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 12,91,570/- MADE BY AO U/S 69A OF T HE IT ACT BY TREATING THE CASH DEPOSIT IN BANK ACCOUNT AS UNEXPL AINED WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF HEARING. 2.1 THE LD. CIT(A) HAS FURTHER ERRED ON FACTS AND I N LAW IN CONFIRMING THE ADDITION BY NOT ALLOWING THE CREDIT OF WITHDRAWAL MADE IN CASH FROM THE SAME BANK ACCOUNT WHICH IS A SOURCE OF DEPOSIT IN THE BANK ACCOUNT . ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 3 3.THE APPELLANT CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. NECESSARY COST BE AWARDED TO THE ASSESSEE. 5. GROUND NO. 1 IS REGARDING THE VALIDITY OF REOPEN ING OF THE ASSESSMENT. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HANDICRAFTS AND TEXTILE. THE ASSESSEE FILED HER RETURN OF INCOME FO R THE YEAR UNDER CONSIDERATION ON 22.06.2010. THE AO ISSUED A NOTICE D U/S 148 ON 30.03.2017 AFTER RECORDING THE REASONS THAT THE ASS ESSEE HAS NOT FILED ANY RETURN OF INCOME U/S 139(1) OF THE IT ACT AND AS PE R INFORMATION AVAILABLE ON RECORD FROM ITS DATA, THE ASSESSEE HAS MADE CASH DEPOSITS OF RS. 12,91,573/- IN HER SAVING BANK ACCOUNT WITH ORIENTA L BANK OF COMMERCE. ON THE BASIS OF THE ABOVE INFORMATION AVAILABLE ON RECORD THE AO FORM THE BELIEF THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPE D ASSESSMENT AND ACCORDINGLY ISSUED NOTICE U/S 148 OF THE ACT ON 30. 03.2017. THE ASSESSMENT WAS COMPLETED U/S 147 READ WITH SECTION 144 OF THE ACT WHEREBY THE AO HAS MADE ADDITION OF RS. 12,91,573/- U/S 69A OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND ALSO RAISED OBJECTIONS AGAINST THE VALIDITY OF INIT IATION OF PROCEEDINGS U/S 147/148 OF THE ACT HOWEVER, THE LD. CIT(A) UPHELD T HE VALIDITY OF REOPENING OF THE ASSESSMENT. ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 4 6. BEFORE THE TRIBUNAL, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE AO HAS ISSUED NOTICE U/S 148 OF THE ACT ON THE BASIS OF AIR INFORMATION AND ON THE BASIS THAT THE ASSESSEE HAS NOT FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION U/S 139(1) OF THE ACT. THE LD. AR HAS POINTED OUT THAT IN DOING SO THE AO HAS IGNORIN G THE FACT THAT THE BANK ACCOUNT ON THE BASIS ON WHICH THE ASSESSMENT WAS RE OPENED IN THE NAME OF RAGINI MEWARA WHEREAS THE NOTICE U/S 148 WAS IS SUED IN THE NAME OF SMT. NAMRATA MEWARA. THE LD. AR HAS POINTED OUT THA T THE ASSESSEE FILED HER RETURN OF INCOME ON 22.06.2010 AND THEREFORE, A T THE TIME OF RECORDING THE REASONS IGNORING THIS CRUCIAL FACT MEANS THAT T HE ASSESSMENT WAS REOPENED WITHOUT APPLICATION OF MIND AND WITHOUT CO NSIDERATION OF RELEVANT FACTS. THUS, THE LD. AR HAS SUBMITTED THAT THE VERY REASONS FOR REOPENING THE ASSESSMENT THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME IS INCORRECT AND CONSEQUENTLY THE NOTICE U/S 148 OF THE ACT IS ILLEGIBLE AND BAD IN LAW. IN SUPPORT OF HIS CONTENTION, HE HAS RE LIED UPON THE VARIOUS DECISIONS AS UNDER:- 1. SH. KULWANT SINGH VS. ITO IN ITA NO. 841/JP/18 DATE D 20.12.2018. 2. PCIT VS. RMG PLYVINY (I) LTD. (2017) 156 DTR 79 (DE L.)(HC). 3. ASHWANI KUMAR VS. ITO IN ITA NO. 129/ASR/2015 DATED 23.02.2016. HENCE, LD. AR HAS SUBMITTED THAT THE REOPENING IS B AD IN LAW AND LIABLE TO BE QUASHED. ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 5 7. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS CHANGED HER NAME DURING THE YEAR UNDER CONSIDERATIO N WHEREAS THE AS PER PAN DATA THE NAME OF ASSESSEE IS RAGINI MEWARA AND THEREFORE, THE AO HAS ISSUED NOTICE U/S 148 OF THE ACT ON THE BASIS O F THE INFORMATION THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME U/S 139(1) OF THE ACT. THE RETURN OF INCOME FILED BY THE ASSESSEE UNDER A CHAN GED NAME WAS NOT REFLECTED IN THE DATA BASE INFORMATION AND THEREFOR E, THE SAID FACT RECORDED IN THE REASONS RECORDED IS BASED ON THE RECORD AND THERE IS NO QUESTION OF IGNORING THE FACT. HE HAS RELIED UPON THE ORDER THE AUTHORITIES BELOW. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ALLEGED RET URN OF INCOME WAS FILED BY THE ASSESSEE ON 22.06.2010 IN THE NAME OF RAGINI MEWARA WHEREAS THE CASH WAS DEPOSITED BY THE ASSESSEE IN THE BANK ACCO UNT IN HER CHANGED NAME SMT. NAMRATA MEWARA. THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 148 OF THE ACT ON THE BASIS OF THE INFORMATION OF D EPOSIT OF CASH IN THE BANK ACCOUNT THEREFORE, THE NON AVAILABILITY OF THE RETURN OF INCOME FILED BY THE ASSESSEE UNDER A DIFFERENT NAME WITH THE ASS ESSING OFFICER IS DUE TO THE CHANGE OF NAME BY THE ASSESSEE AND THE SAME WAS NOT UPDATED IN THE PAN DATA BASE. SINCE THIS FACT WAS NOT AVAILABL E IN THE PAN DATA BASE DUE TO THE REASONS OF CHANGE OF NAME AND THEREFORE, THE AO HAS MENTIONED IN REASONS RECORDED THAT THE ASSESSEE HAS NOT FILED HER RETURN ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 6 OF INCOME. NONE CONSIDERING THE FACT OF FILING THE RETURN OF INCOME IS DUE TO THE REASONS THAT THE ASSESSEE FILED THE RETURN O F INCOME UNDER DIFFERENT NAME AND THE BANK ACCOUNT WAS OPENED IN A DIFFERENT NAME. ACCORDINGLY WHEN THERE WAS INFORMATION OF DEPOSIT OF CASH IN T HE BANK ACCOUNT OF THE ASSESSEE UNDER A DIFFERENT NAME THEN PRIMA FACIE IT CONSTITUTE A TANGIBLE MATERIAL TO FORM THE BELIEF THAT THE INCOME ASSESSA BLE TO TAX HAS ESCAPED ASSESSMENT. HENCE, I DO NOT FIND ANY REASONS TO INT ERFERE WITH THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 9. GROUND NOS. 2 & 2.1 ARE REGARDING ADDITION MADE BY THE AO ON ACCOUNT OF DEPOSIT MADE IN CASH IN THE BANK ACCOUNT OF THE ASSESSEE WHICH WAS CONFIRMED BY THE LD. CIT(A). THE LD. AR H AS SUBMITTED THAT FROM THE BANK ACCOUNT IT CAN BE NOTED THAT THERE ARE REG ULAR DEPOSITS AND WITHDRAWALS IN CASH. THE DEPOSITS ARE MADE AT DIFFE RENT PLACES I.E. JODHPUR, AJMER JAIPUR ETC. WHEREAS THE WITHDRAWAL I S MADE AT GURGAON WHEREAS THE ASSESSEE RESIDES. THE BANK ACCOUNT ITSE LF INDICATES THAT SALE PROCEEDS WERE DEPOSITED IN THIS BANK ACCOUNT AND AM OUNT WAS WITHDRAWN FOR MAKING PAYMENT FOR PURCHASES AND EXPENSES. THER EFORE, THE ENTIRE DEPOSIT IN THE BANK ACCOUNT CANNOT BE CONSIDERED AS INCOME BUT ONLY A REASONABLE PROFIT RATE ON SUCH DEPOSIT CAN BE ASSES SED AS INCOME OF THE ASSESSEE. THE LD. AR HAS FURTHER POINTED OUT THAT T HE ASSESSEE HAS ALREADY DECLARED INCOME OF RS. 2,61,722/- IN THE RETURN OF INCOME WHICH GIVE A ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 7 RATE OF 20.17% ON DEPOSIT OF RS. 12,91,573/-. THUS, THE LD. AR HAS PLEADED THAT WHEN THE ASSESSEE HAS ALREADY DECLARED A REASONABLE INCOME IN THE RETURN OF INCOME THEN NO ADDITION IS WARRANT ED ON ACCOUNT OF DEPOSITS MADE IN THE BANK ACCOUNT. HE HAS FURTHER P OINTED OUT THAT IN THE REMAND REPORT, THE AO HAS REJECTED THE CLAIM OF DEP OSIT BEING THE SALE PROCEEDS ON THE GROUND THAT NO SUPPORTING EVIDENCE REGARDING PURCHASE AND SALE OF TEXTILE AND HANDICRAFT ITEMS HAS BEEN F URNISHED WHEREAS THE ASSESSEE HAS ALREADY DECLARED THE INCOME FROM THE S AID BUSINESS IN THE RETURN OF INCOME FILED U/S 139(1) OF THE ACT. ALTER NATIVELY, THE LD. AR HAS SUBMITTED THAT IN ANY CASE ONLY PEAK DEPOSIT IN THE BANK ACCOUNT CAN BE CONSIDERED FOR ADDITION U/S 69A OF THE ACT INSTEAD OF THE ENTIRE DEPOSIT MADE DURING THE YEAR AND IGNORING THE WITHDRAWAL MA DE BY THE ASSESSEE. 10. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T THE ASSESSEE HAS FAILED TO PRODUCE ANY SUPPORTING EVIDENCE THAT THE DEPOSITS WERE MADE FROM SALE PROCEEDS. EVEN NO EVIDENCE WAS PRODUCED R EGARDING ANY PURCHASE OF TEXTILE AND HANDICRAFTS MATERIAL. HE HA S FURTHER CONTENDED THAT THE ASSESSEE HAS NOT COMPLIED WITH VARIOUS NOTICES ISSUED BY THE AO AND THEREFORE, THE STAND OF THE ASSESSEE CANNOT BE ACCE PTED. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 11. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD THE LIMITED ISSUED RAISED IN THIS APPEAL BY THE ASSESSEE IS ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 8 WHETHER THE ENTIRE DEPOSITS MADE IN THE BANK ACCOUN T IS LIABLE TO BE ASSESSED AS INCOME BY THE ASSESSEE OR ONLY THE PROF IT ELEMENT IN THE TURNOVER WOULD BE ASSESSED TO TAX. THERE IS NO DISP UTE THAT THE ASSESSEE FILED RETURN OF INCOME U/S 139(1) OF THE ACT HOWEVE R, DUE TO CHANGE OF NAME THE SAID INCOME WAS NOT CONSIDERED BY THE AO I N THE PROCEEDINGS U/S 147/148 OF THE IT ACT. THE ASSESSEE IS IN THE B USINESS OF TEXTILE AND HANDICRAFTS AND THE PARTICULARS OF THE DEPOSITS AND WITHDRAWALS MADE IN THE BANK CLEARLY MANIFEST A REGULAR PATTERN OF DEPO SITS AT DIFFERENT PLACES AND WITHDRAWALS WERE MADE BY THE ASSESSEE AT GURGAO N WHICH SHOWS THAT THE DEPOSITS WERE MADE IN THE BANK ACCOUNT OF THE A SSESSEE ON ACCOUNT OF SALE PROCEEDS. THEREFORE, I FIND MERITS AND SUBSTAN CE IN THE CONTENTION OF THE LD. AR THAT DEPOSITS MADE IN THE BANK ACCOUNT R EPRESENTS THE SALE PROCEEDS OF THE ASSESSEE AND HENCE THE ENTIRE DEPOS IT CANNOT BE ASSESSED TO TAX BUT A REASONABLE PROFIT CAN BE ESTIMATED ON SUCH TURNOVER OF THE ASSESSEE. THE ASSESSEE HAS ALREADY DECLARED THE INC OME ON ACCOUNT OF TEXTILE AND HANDICRAFTS BUSINESS. HENCE, THE AO IS DIRECTED TO ESTIMATE THE INCOME OF THE ASSESSEE BY APPLYING A REASONABLE AND PROPER NET PROFIT ON SUCH TURNOVER. IN ANY CASE WHEN THERE IS A CORRESPO NDING WITHDRAWAL FROM THE BANK THEN THE ENTIRE DEPOSIT CANNOT BE CONSIDER ED AS UNEXPLAINED DEPOSITS IGNORING THE WITHDRAWAL MADE B Y THE ASSESSEE BEFORE THE SUBSEQUENT DEPOSIT. HOWEVER, I FIND MERITS IN T HE CONTENTION THAT THE ITA 1420/JP/18 SMT. NAMRATA MEWARA VS. ITO. 9 DEPOSITS REPRESENTS SALE PROCEEDS AND TURNOVER OF T HE ASSESSEE AND HENCE, THE MATTER IS SET ASIDE TO THE RECORD OF THE AO FOR ESTIMATION THE INCOME OF THE ASSESSEE BY APPLYING FOR SOME REASONABLE AND PR OPER BASIS BEING GP/NP ON SUCH TURNOVER. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/11/2019. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/11/2019 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. NAMRATA MEWARA, GURGAON. 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD-1, KISHANGARH. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1420/JP/18) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR