KAMALJIT KAUR CHADHA, ANDHERI WEST V. INCOME TAX OFFICERS, DELHI

ITA 1485/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5726 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-06-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAHESH DHUMNE
• Keywords: Depreciation; Transactions in derivatives
• Section: 147; 148; 139; 142(1); 250; 73; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 1485/Mum/2024 (A.Y.2013-14) Kamaljit Kaur Chadha, 701/702, Skylark B Wing 4 th cross lane, Opp. Green 501, Krystal, 206, Waterfield Road, Bandra (West), Mumbai-400 050 PAN: AACPM8648J ..... Appellant Vs. DCIT Circle 4(1) (1) R. No. 640, 6 th floor, Aayakar Bhavan, M. K. Road, Mumbai- 400 020 ..... Respondent Appellant by : Shri Mahesh Dhumne, Ld. AR Respondent by : Shri P. D. Chougule, Ld. DR Date of hearing : 19/06/2024 Date of pronouncement : 22/07/2024 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of National Faceless Appeal Centre (for short “NFAC”) dated 08.02.2024 passed u/s. 250 of the Income 2 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha Tax Act, 1961 (in short ‘the Act’) for A.Y. 2015-16. The assessee has raised the following grounds of appeal:- 1. The Ld. A.O grossly erred in estimating the cash deposits based on wrong departmental information viz... Rs. 7,70,000/-+ Rs. 1,07,25,000/-(Rs. 35,75,000/- x 3times) actually total cash deposited during the year was Rs. 35,75,000/- only and not 3 times as stated by Ld. A.O Bank statement and bank certificate duly confirmed cash deposits of Rs. 35,75,000/- bank statement and bank certificate both are attached here with for ready reference. Rs. 12, 50,000/- Pawar Prashant Dattatraya PAN No. BOVPP2056M, Rs. 12, 50,000/- Rorgude Ratan Gangaram PAN No. BUGPB6469P, Rs. 10, 75,000/- from own family resources shown in cash flow statement attached 2. Total deposits in the bank during the year 1.4.2012 to 31.3.2013 were Rs. 1,10,81,217/- (without interest) comprising of cash Rs. 35,75,000/- and bank transfers Rs. 75,06,217/-, Fixed deposit realized of family members Rs. 63,29,559/-, Gold Loan Andhra bank Rs. 4,64,000/- and HDFC bank Rs. 5,12,568/-, RTGS from Share broker Pinnacle Forex 2 Lacs Family members Aged Pan No. assessed since FD REALISED Annexure Japjeet Singh Chadha 50 AACPC5335) 1985 Rs. 17, 28,000/- 1 Gurcharan Kaur Chadha 73 AACPC9216G 1977 Rs. 5, 60,000/- 2 Subaj Singh Chadha 83 AACPC9258L 1977 Rs. 12, 38,000/- 3 Kamaljit Kaur Chadha 45 AHLPC8353Q Rs. 28, 03,559/- 4 Pinnacle Forex Rs. 2, 00,000/- 5 Gold Loan Andhra Bank Rs. 4, 64,000/- 6 Gold Loan HDFC Bank Rs. 5, 12,658/- 7 3. The Ld. CIT(A) has grossly erred in confirming the assessment order of A.O without applying his mind, verifying the facts and the information submitted or applying natural justice which is bad in law. 4. Your appellant prays for deletion of addition of Rs. 1,14,95,000/- made as unexplained cash credit grant of permissible reliefs under the law your Hon. May deem fit and proper in the case. 5. Your appellant craves leave to add, alter, amend delete any of the above grounds of appeal. 6. Your appellant prays for grant of stay as this is very High-Pitched Assessment without any basis or justification. 3 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha 2. The brief facts of the case are that the assessee lady was a non-filer u/s. 139 of the Act for the assessment year under consideration. The AO came to know that the assessee deposited cash to the tune of Rs. 7.7 Lacs with a bank and also deposited cash to the tune of Rs. 1,07,25,000/- alongwith interest income to the tune of Rs. 74,360/-. Consequently, a notice u/s. 148 of the Act was issued to the assessee vide dated: 31.03.2021. Further, notices u/s. 142(1) of the Act was issued on various dates for seeking information, but there was no compliance by the assessee. Ultimately, the case of the assessee was assessed u/s. 147 r.w.s. 144 and 144B of the Act at a figure of Rs. 1,15,69,360/-. 3. The assessee being aggrieved with this order of AO preferred an appeal before the Ld. CIT (A), NFAC-Delhi, who in turn confirmed the order of the AO. The assessee being further aggrieved preferred this present appeal before us. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. As submitted by the assessee that she deposited cash to the tune of Rs. 35.75 Lacs only and departmental information system wrongly taken Rs. 1,07,25,000/- (Rs. 35.75 Lacs x 3 Times). To further confirm this fact, we have gone through the paper book submitted by the assessee, which was duly submitted before the Ld. CIT (A) Also. 4. It is observed that the assessee duly submitted bank deposit certificate issued by the Union Bank of India (Erstwhile Andhra Bank) confirming cash deposit to the tune of Rs. 35.75 Lacs only vide page no. 1 of the paper book. So, the stand of the assessee is confirmed to that extent. As far as sources of this cash deposit is concerned, the assessee duly submitted the PAN No. of the parties namely Mr. Pawar Prashant Dattatraya (PAN No. BOVPP 2056M), Rs. 12.5 Lacs, 4 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha Mr. Rorgude Ratan Gangaram (PAN No. BUGPB 6469P) and Rs. 10.75 from own family resources. 5. Total deposit in the bank during the F.Y. 2012-13 was Rs. 1,10,81,217/- comprising of cash to the tune of Rs. 35.75 Lacs, Bank transfers of Rs. 75,06,217/-. The bank transfers are not under challenge as the case was re-opened based on the information that the assessee deposited cash to the tune of Rs. 1, 07, 25,000/- (Rs. 35.75x3 Times).The Ld. CIT (A) was very well in a position to examine the people named as loan provider to the assessee for sake of justice and fair assessment of the income chargeable to tax. As far as urgency to accept cash is concerned, it is submitted by the assessee before the Ld. CIT (A) that she incurred heavy losses to the tune of Rs. 53, 91,419/- in F&O transactions and same is cross verifiable with the assessee’s ledger in the books of broker M/s. Pinnacle Forex & Securities Pvt. Ltd. submitted with the paper book attached. To clear dues of broker mentioned (supra) the assessee raised the loans in cash from friends and family members. Looking at the circumstances of the assessee, plea taken by the assessee looks to be reasonableand tenable. 6. It is also pertinent to discuss here the time limit as prescribed in the statute for re-opening of the case of any assessee as under: “Section - 147, Income-tax Act, 1961 - FA, 2023 60 [Income escaping assessment. 147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other 5 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation. —For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.] 60. Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 147, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988/1-4-1989, Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989, Finance Act, 2008, w.e.f. 1-4-2008, Finance (No. 2) Act, 2009, w.r.e.f. 1-4-1989, Finance Act, 2012, w.e.f. 1-7-2012 and Finance Act, 2016, w.e.f. 1-6-2016, read as under: 147. Income escaping assessment.—If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year†, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure† on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts† necessary for his assessment, for that assessment year: 6 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1. —Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2. —for the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: — (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but— (i) income chargeable to tax has been under assessed; or (ii) such income has been assessed at too low a rate; or 7 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha (iii) such income has been made the subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; (ca) where a return of income has not been furnished by the assessee or a return of income has been furnished by him and on the basis of information or document received from the prescribed income-tax authority, under sub-section (2) of section 133C, it is noticed by the Assessing Officer that the income of the assessee exceeds the maximum amount not chargeable to tax, or as the case may be, the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (d) Where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.—For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148. Explanation 4.—For the removal of doubts, it is hereby clarified that the provisions of this section, as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012." “Section - 149, Income-tax Act, 1961 - FA, 2023 72 [Time limit for notice. 72. Substituted by the Finance Act, 2021, w.e.f. 1-4-2021. Prior to its substitution, section 149, as amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989, Direct Tax Laws (Second Amendment) Act, 1989, w.e.f. 1-4-1989, Finance Act, 2001, w.e.f. 1-6-2001 and Finance Act, 2012, w.e.f. 1-7-2012, read as under: 8 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha 149. Time limit for notice. — (1) No notice under section 148 shall be issued† for the relevant assessment year, — (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has †escaped assessment amounts to or is likely to amount to one lakh rupees or more† for that year; (c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation. —In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation. —For the removal of doubts, it is hereby clarified that the provisions of sub- sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012." 7. Looking at the facts of the case and submissions made by the assessee before the Ld. CIT (A), it is observed that reasons taken by the department for re- 9 ITA No. 1485/Mum/2024 Kamaljit Kaur Chadha opening of the case itself were unverified and vague. Moreover, the assessee fully participated in the proceedings before the Ld. CIT (A) and all the relevant information pertaining to the credits in her bank account were duly furnished. Based on above observation and time limit discussed in para 6 (supra), it is found that re-opening was time barred hence liable to be quashed. On merits also the assessee was able to discharge her onus beyond doubt. In the result, grounds taken by the assessee is allowed. 8. In the result, the appeal of the assessee is fully allowed and orders of the authorities below are set-aside. Order pronounced in the open court on 22 nd day of July, 2024. Sd/- Sd/- (PAVAN KUMAR GADALE) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, दिन ांक/Dated: 22/07/2024 Dhananjay, Sr. PS Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकर आयुक्त CIT 4. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्ड फ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Mumbai