Sh. Jagdev Singh, Barnala V. ITO, Ward -1, Barnala

ITA 185/CHANDI/2023

AI Insights

The case involves an appeal by Shri Jagdev Singh against the order of the CIT (Appeals), Patiala, which pertained to the assessment year 2010-11. The primary contention was the validity of an unsigned appellate order and the incorrect assessment of unexplained cash deposits in a joint KCC Limit account. The assessee argued that the account was a joint account and the transactions did not pertain to him individually. The Tribunal noted procedural lapses in the communication of the appellate order and allowed the submission of additional evidence to substantiate the assessee's claims.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135492 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-07-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 30-03-2023
• Other Referred Cases: Tek Ram v/s CIT (2013) 357 ITR 133
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARDEEP GOYAL
• Keywords: Business income; Period of limitation; Additional evidence; Time period of passing order; Reason to believe
• Section: 148; 143(3)

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “ए” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ᮰ी संजय गगᭅ, ᭠याियक सद᭭य एवं ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. SANJAY GARG, JM & SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ ITA NO. 185/Chd/ 2023 िनधाᭅरण वषᭅ / Assessment Year : 2010-11 Shri Jagdev Singh H.No. 551, Patti Ghakal, Near Ravi Dass Bhagat Gurdwara Vill: Gehal, Dist: Barnala-148100, Punjab बनाम The ITO Ward-1, Income Tax Office, BSNL Exchange Building,K.C. Road, Barnala Barnala-148101, Punjab ᭭थायी लेखा सं./PAN NO: AAATI6009F अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Pardeep Goyal, Advocate राज᭭व कᳱ ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 17/07/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 06/10/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A), Patiala dt. 27/02/2020 pertaining to Assessment Year 2010-11. 2. In the present appeal, the Assessee has raised the following grounds of appeal: 1. On facts and under the circumstances of the case the quantum appeal order passed by CIT (Appeals), Patiala on 27.02.2020 is an unsigned order i.e. neither manually signed nor digitally signed by CIT (Appeals) has no legal sanctity and is invalid in the eyes of law. 2. On facts and under the circumstances of the case the CIT (Appeals) as well as the AO has erred by not accepting the assessee contention that the KCC Limit account is a Joint account and transactions recorded in KCC Limit account does not pertains to assessee in any manner. 3. On facts and under the circumstances of the case the CIT (Appeals) was not justified in confirming the order of AO holding that the sum of Rs.20,23,500/- was assessable as unexplained cash deposits made by the assessee out of his undisclosed source of income. 4. That the appellant craves leave to add, amend or withdraw any ground of appeal before the appeal is finally heard or disposed off. 3. At the outset, it is noted that there is a delay in filing the present appeal by 1062 Days. In this regard, the Ld. AR taken us through the affidavit filed by the assessee and it 2 was submitted that the assessment order under section 143(3) r.w.s 147 was passed by the AO on 21/11/2017 wherein the matter was represented by Shri Rakesh Kumar Gupta & Shri Amit Gupta Advocate’s Barnala on behalf of the assessee. Subsequently, after passing of the assessment order the assessee changed his counsel and authorized C.A. Shri Pardeep Goyal to appear as Counsel before the Ld. CIT(A), Patiala. 3.1 It was submitted that the assessee thereafter filed the appeal before the Ld. CIT(A), Patiala against the assessment order on 22/05/2018 and in Form No. 35, the assessee mentioned the email-id of the new counsel Shri Pardeep Goyal for all communication purposes. Thereafter the Ld. CIT(A), Patiala decided the appeal on 27/02/2020 and intimation letter as well as the appeal order was sent on the email id of the previous Counsels Shri Rakesh Kumar Gupta & Shri Amit Gupta on 04/03/2020. 3.2 It was submitted the earlier Counsel did not inform about the receipt of the order passed by the Ld. CIT(A) and all along the assessee was under the belief that the matter is under consideration by the Ld. CIT(A), Patiala as the appeal order was never served on him on the email id given in Form No. 35. 3.3 It was submitted that subsequently, in the Month of February 2023 when ITO- Ward-1- Barnala issued letter to the banks for attachment of bank account for recovery of tax demand, the assessee came to know about passing of the order by the Ld. CIT(A), Patiala. 3.4 It was submitted that thereafter assessee approached his previous Counsel Shri Rakesh Kumar Gupta & Shri Amit Gupta to inquire whether any appeal order has been received by them and on checking their records, they have confirmed that they had received an email from Ld. CIT(A), Patiala on 04/03/2020 and which was thereafter forwarded to the assessee on 27/03/2023. 3.5 It was accordingly submitted that it was on account of non receipt of the order passed by the Ld. CIT(A), Patiala that the assessee could not file the appeal within the prescribed due date and the appeal was filed on 31/03/2023. 3.6 It was further submitted that it was during the COVID-19 pandemic period that the order by the Ld. CIT(A), Patiala was passed and in view of the Hon’ble Supreme 3 Court’s decision wherein the limitation period has been directed to be extended from time to time, the period from 15/03/2020 to 28/02/2022 shall also get excluded for the purposes of limitation as so directed by the Hon’ble Supreme Court. 3.7 It was accordingly submitted that in view of the aforesaid bonafide and compelling reasons, the assessee was prevented by sufficient cause to file present appeal and it was accordingly submitted that the delay in filing the present appeal may be condoned and appeal be admitted for adjudication. 4. Per contra, the Ld. DR is heard who has submitted that there is substantial delay in filing the present appeal. However, he could not controvert the fact that the appellate order was passed by the ld CIT(A) during the Covid 19 pandemic and inspite of assessee intimating the email-id of Shri Pardeep Goyal in Form No. 35 for all communication purposes, the appeal order was served on the email-id of the previous Counsel and which has resulted in delayed intimation to the assessee. 5. After hearing both the parties and considering the material available on the record, we find that firstly in view of the COVID-19 pandemic, the limitation period which falls due on 03/05/2020 in the present case needs to be extended in view of the Hon’ble Supreme Court decision. Secondly, the facts which are emerging from the records are that the assessee was not served with the copy of the order by the office of the Ld. CIT(A), Patiala as the order was served on the email-id of the earlier Counsel as against the email-id of the Counsel who appeared before the Ld. CIT(A), Patiala as well as whose email-id was provided by the assessee in Form No. 35 for all communication purposes. The assessee got to hear about passing of the appellate order for the first time in February 2023 when his bank account was attached and thereafter, a copy of the order was provided to the assessee by his previous Counsel on 27/03/2023 and the appeal was thereafter filed on 31/03/2023. In view of the same we find that there was reasonable cause for delay in filing the present appeal and exercising our powers under section 254 of the Income Tax Act, 1961, we hereby condone the delay in filing the present appeal and the same is admitted for adjudication. 6. Now, coming to the facts of the present case. During the course of hearing, the Ld. AR submitted that the assessee is in the business of trading in fertilizers and pesticide 4 items. A notice U/s 148 of the Income Tax Act 1961 was issued to the assessee by ITO- Ward-l-Barnala on 29.03.2017 having reason to believe that assessee had deposited Rs.42,00,710/- in HDFC Bank agricultural KCC Limit A/c No. 122105000001434 (Old No.) / 14248040001100 (Changed No.) / 14248680000833 (New No.) during the year under consideration. 6.2 It was submitted that the assessee in pursuance to notice issued U/s 148 of the Act filed his ITR-4 on 14.08.2017 vide acknowledgement number 172408890140817 by declaring Net Taxable Business Income of Rs.1,37,435/-. 6.3 It was submitted that the assessee during the course of assessment proceedings submitted before A.O that he in his individual capacity has nothing to do with the above agriculture KCC limit account in which the above said amount of Rs.42,00,710/- has been deposited as the same has been opened in the name of three persons i.e., Sh. Jagdev Singh S/o Sh. Ram Singh, Sh. Gurdeep Singh S/o Sh. Ram Singh and Sh. Ram Singh S/o Sh. Bhagwan Singh. 6.4 It was submitted that the assessee also submitted before A.O that M/s Ram Singh and Sons HUF, Village Gehal cultivated about 9 Acres of agriculture land at Village Gehal and also cultivate about 40 Acres of agriculture land after taking the same on lease basis and the proceeds of agriculture produce has been utilized in depositing sum of amount in question the HDFC Bank Account No. 122105000001434 (Old No.)/14248040001100(Changed No.)/ 14248680000833 (New No.). 6.5 It was further submitted that the AO did not accept the assessee contention and held in Para 2.5 (Page No.8) of the assessment order that the plea of the assessee regarding redeposit of Rs.21,72,210/- out of Cash withdrawals has been accepted. Whereas regarding cash deposit amount of Rs.20,23,500/- on 18.04.2009, the A.O held that “With regard to land taken on lease, no documentary evidence has been produced. Further the said land of 9 Acres was owned by HUF i.e. M/s Ram Singh & Sons whereas cash deposits of Rs.20,23,500/- has been made in the name of Sh. Jagdev Singh under his PAN in a single day i.e. on 18.04.2009”. The A.O further held in Para 2.6 (Page No.8) of the assessment order that the assessee failed to explain the source of 5 huge amount of cash deposit of Rs.20,23,500/- in a single day i.e. on 18.04.2009 shown as opening balance in spite of repeated adjournments. 6.6 It was submitted that the plea of the assessee that the deposits was made out of the agriculture income was not accepted by the AO and he made additions of 20,23,500/- as unexplained cash deposits out of his undisclosed source of income. 6.7 It was submitted that being aggrieved, the assessee preferred appeal before the CIT (A), Patiala. The Ld. CIT (A) held in Para 5.2 of the appeal order as under: "That the arguments of the AR regarding the bank account being an HUF account is not found acceptable because in the case of HUF account, the PAN number of the HUF is mentioned which is different from the individual PAN. Also, the bank account in the name of HUF will have the narration as 'HUF'. In the present case, the bank account has the PAN of the assessee and is in the name of the assessee and not in the name of 'M/s. Ram Singh & Sons HUF'. 'That the assessee has claimed that he has received cash of Rs. 8,48,168/- on 18.04.2009 from M/s. Sandhu Trading Co., Village Gehal on account of sale of family agriculture produced of wheat sold in April, 2009 and filed the copies of Form-J, but has not filed any documents related to the expenses incurred at the time of sowing and harvesting of the crops apart from small expenses in between for pesticides and fertilizers etc. On the basis of the pattern of receipts and expense relating to agriculture, the explanation of the assessee is not found reliable and hence liable to be rejected. 6.8 In light of the above factual matrix, it was submitted by the Ld. AR that the assessee is living in a rural remote area and not well versed with Income Tax Laws. The assessee has never faced any income tax proceedings in the past. Due to assessee limited knowledge and lack of awareness about the income tax laws, he could not produce the banking documents and registered mortgage deed documents etc. before the A.O as well as before CIT(A) from which truth can be easily proved that the joint agriculture KCC limit account in which Rs.42,00,7107- was deposited during the year under consideration does not relate to assessee in his individual capacity. It was submitted that after the receipt of CIT(A) Patiala order, the assessee enquired from bank and from his family members regarding the exact facts and figures of agriculture KCC limit account. 6.9 It was submitted that the assessee has obtained Agriculture KCC bank account Opening Form as well as Bank Credit Sanction Letter from his uncle's Sh. Gurmail Singh whose family members were co- borrowers & joint account holders in Agriculture KCC 6 limit Account No. 122105000001434 (Old No.) / 14248040001100 (Changed No.) / 14248680000833 (New No.) and also obtained certified copy of registered mortgage deed from the office of Sub-Registrar Village Bhadaur, District Barnala on 23.06.2023 from which it can be easily proved that the agriculture KCC Limit account was in the joint name of assessee and other co-borrowers namely Sh. Gurmail Singh (Uncle), Sh. Kuldeep Singh (Cousin), Sh. Ram Singh (Father), Sh. Gurdeep Singh (Brother). 6.10 It was submitted that the assessee could not produce the documents referred above as the said documents were received after receipt of the order of the Commissioner Appeals. 6.11 It was submitted that in the interest of justice, the additional evidence may be admitted and the issue may be decided after considering the additional evidence and reliance was placed on the ratio laid by the Hon'ble Supreme Court in the case of Tek Ram v/s CIT (2013) 357 ITR 133 wherein it was held that where documents filed by the assessee before Court had some relevance, same should be considered while deciding appeal. Therefore, it is requested before your good self to kindly grant the permission for production of additional evidences under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963. 7. Per contra, the Ld. DR is heard who has submitted that the assessee has been provided ample opportunities by the AO as well as before the Ld. CIT(A) and even during the course of appellate proceedings, the assessee has sought permission for filing additional evidence which were duly allowed by the Ld. CIT(A) and basis remand report, the matter has been decided. It was accordingly, submitted that the assessee does not deserve any further opportunity to adduce the additional evidence at this stage and basis the material already available on the record, the matter may be decided. 8. We have heard the rival submissions and purused the material available on record. The assessee by way of his application under Rule 29 of the Tribunal Rules has sought permission to file additional evidence in form of KCC Bank account opening Form maintained with HDFC Bank, KCC credit sanction letter and copy of registered mortgage deed dated 29/06/2007. These documents are in support of the contention 7 that the bank account is in joint name alongwith other family members and not in individual name of the assessee and the deposits and KCC limits and related borrowings are again not in assessee’s individual capacity but in joint capacity and therefore, the source of cash deposits in the subject bank account has to be seen from family’s agriculture cultivation perspective. We find that these documents are germane to the matter under consideration where the Revenue seeks to tax the deposit in the said HDFC bank account solely in the hands of the assessee instead of all related family members and following the dicta laid down by the Courts from time to time that the technicality should not come in the way of grant of substantial justice, we hereby allow the assessee to submit these additional evidences before this Tribunal. 9. Given that these documents needs to be examined, we deem it appropriate that the matter is set-aside to the file of the AO to examine these additional evidences so submitted by the assessee and decide the matter a fresh after providing reasonable opportunity to the assessee. 10. In the result, the application for additional evidence is allowed and various grounds of appeal taken by the assessee are left open and not adjudicated upon and the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 06/10/2023. Sd/- Sd/- संजय गगᭅ िवᮓम ᳲसह यादव (SANJAY GARG) ( VIKRAM SINGH YADAV) ᭠याियक सद᭭य / JUDICIAL MEMBER लेखा सद᭭य/ ACCOUNTANT MEMBER AG Date: 06/10/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar