LATE SHRI PARVEEN KOCHHAR LEAGAL HEIR KAMINI CHOUDHARY , AMRITSAR V. INCOME TAX OFFICER WARD -5 (4), AMRITSAR

ITA 187/ASR/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6859 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 20-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Source of fund; Assessment record
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 187/Asr/2021 Assessment Year: 2017-18 Late Sh. Parveen Kochhar, Legal Heir Kamini Choudhary, H. N. 5, Gali No.1, Bank WaliGali GDM School, NaraingarhChheharta Amritsar. [PAN:- AAZPK1491J] (Appellant) Vs. ITO Ward-5(4), Amritsar. (Respondent) Appellant by Sh. Rohit Kapoor, CA & Sh. V.S. Aggarwal. Respondent by Sh.S. M. Surendranath, Sr. DR. Date of Hearing 01.09.2022 Date of Pronouncement 15.09.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeal), National Faceless Appeal Centre, Delhi, [in brevity the CIT(A)] bearing appeal no. DIN & Order No. I.T.A. No. 187/Asr/2021 2 ITBA/NFAC/S/250/2021-22/1037322132(1), date of order 29.11.2021, the order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y.2017- 18. The impugned order was originated from the order of the ld. Income Tax Officer, Ward-5(4), Amritsar (in brevity the AO), order passed u/s 143(3) of the Act date of order 16.12.2019. 2. Brief fact of the case is that the assessee had deposited cash amount of Rs.16,30,000/- in bank account during the demonetisation period. As per the claim of the assessee Rs 30,000/- was deposited before the demonetisation period & rest amount, Rs 16,00,000/- was deposited during the time of demonetisation. Assessee submitted that the amount which was deposited during the demonetisation period was withdrawn 70 days ago from same bank account. The assessee was 77 years old and the amount was withdrawn for contributing the fund for business of the son. Later on, the amount was not required and unused fund was deposited in the same bank account. The plea of the assessee was not adjudicated /considered by the ld. AO& the amount of Rs.16,30,000/- was added back with the total income of the assessee under undisclosed source of income. 3. Aggrieved assessee filed an appeal before the ld. CIT(A). Without considering the fact the ld. CIT(A) upheld the order of the AO. I.T.A. No. 187/Asr/2021 3 4. Being aggrieved assessee filed an appeal before us. 5. The counsel for the assessee Mr. Rohit Kapoor filed a written submission on dated 16.08.2022 under Rule 18 of the IncomeTax (Appellate Tribunal) Rules, 1963. Mr. Kapoor vehemently argued and informed that the demonetisation was started from 09.11.2016. The cash was deposited in the HDFC, Bank bearing account no. 50100112383265/- in the following manner: Dated Cash Deposited (Rs) 08.11.2016 30,000.00 13.11.2016 13,00,000.00 15.11.2016 3,00,000.00 Total Cash Deposited during demonetization period 16,30,000.00 5.1 Mr. Kapoor further argued that in respect to the deposit amount which was withdrawn from the same bank account through a cheque. The issue was pointed out before the ld. AO. The relevant para of the order of assessment is extracted as follows:- “In compliance to aforesaid notice u/s 143(2), C.A. Rashmi submitted adjournment application through online on 26.08.2019. Accordingly online hearing in this case was fixed for 27.09.2019 vide this office notice under section 142(1) no. ITBA/AST/F/142(1)/2019- I.T.A. No. 187/Asr/2021 4 20/1018063076(1) along with annexure dated 18.09.2019 calling for information and documents. In compliance to said notice, the assessee replied through online that she deposited cash during demonetization period from the withdrawal made by her form HDFC saving account from Chheharta branch as detailed below: Sr. No. Date of withdrawal Amount of withdrawal 1. 30.08.2016 Cheque No.6 Rs.15,00,000/- 2. 30.08.2016 Cheque No.7 Rs.15,00,000/- Total Rs.30,00,000/- 5.2 Mr. Kapoorargued that the assessee had the income from house property and income from other sources and age was 77 years old during the time of demonetization. The assessing authority in his order wrongly mention that the gap of between withdrawal and deposit of the cash was seven months but as per the observation of the assessment order it is only the 70 days gap in between withdraw and deposit of cash. He drew our attention in CBDT Instruction No. 3/2017 [F.No. 225/100/2017/ITA-II], Dated 21.02.2017in relation to his argument. 5.3 The relevant para of the Instruction in page no. 5 para 3 is extracted as below: “3. Cash withdrawn out of bank account 3.1 The AO needs to consider the remarks provided by the person under verification and seek relevant information i.e. copy of I.T.A. No. 187/Asr/2021 5 bank statement/passbook to form appropriate view and quantify unexplained income. 3.2 Bank statement/passbook may be verified to confirm the name of the account holder. The date and amount of cash withdrawals and cash deposits in the bank account may be matched to verify whether claim that the cash deposited is out of cash withdrawn out of bank account is acceptable. Further removed in time the withdrawal is from the date of demonetization i.e. 8th November, 2016, the more suspicious it looks. The AO should take a balanced view in analyzing the time gap from the point of view of normal human behaviour and specific circumstances of the case.” 5.4 Ld. Counsel relied on the following judgments which were already cited before the appellate authority. The extract of the judgments are as follows: 1. ShivcharanDass vs. CIT 126 ITR 263 [1980] (Punj. & Har.) "Income from undisclosed sources—Unexplained investment— Amount disclosed by HUF under Voluntary Disclosure Scheme— Thereafter kept lying in assessee's house with his wife till her death— ITO questioning its source after the same had subsequently been deposited with a bank in the names of assessee's then major daughters—In the absence of any evidence to the effect that the said sum was utilized by the assessee in any other manner, the Department was not justified in unreasonably rejecting a good explanation and adding the amount as income from undisclosed sources—Further, the I.T.A. No. 187/Asr/2021 6 addition, if at all possible, could have been made only in the daughters' hands—There was no provision in 1922 Act analogous to s. 69 of 1961 Act." 2. 2021 (5) TMI 518 - ITAT VISAKHAPATNA M M/S SRI VENKATESWARA CONSTRUCTION S VERSUS ACIT, CIRCLE-5 (1) VISAKHAPATNAM “Ex parte order passed by the Ld. Commissioner for non-prosecution without considering the merits of the case - HELD THAT: - Commissioner is permitted to pass the ex-parte order but the same should be on merits. In the instant case, the Ld. Commissioner passed the order without considering the merits. The ITAT, Delhi Bench in the case of Pawan Kumar Singhal Vs. ACIT [2019 (7) TMI 869 - ITAT DELHI] held after considering the decisions of the various High Courts and Hon'ble Supreme Court that the Ld. Commissioner is required to pass the order on merits stating the points for determination, decision thereon and reasons for decision. In the instant case, there is no dispute that the Ld. Commissioner has confirmed the order of the AO for non-prosecution without considering the merits. Therefore, in the interest of justice, we consider it is appropriate to remand the matter back to the file of the Ld. Commissioner to decide the appeal on merits. Accordingly, appeal of the assessee is allowed for statistical purpose.” I.T.A. No. 187/Asr/2021 7 6. The ld. DR vehemently argued and relied on the assessment order page 4. The relevant para is extracted as follows: - “In have examined the reply of the assessee and after applying my mind and after the examination of documents filed by the assessee and after the perusal of ITR-2(which is meant for Individual and HUF which are carrying any business Income) filed by the assessee which clearly indicates that the assessee never shown any income from business or profession. Therefore, the claim of the 77.5-year-old lady assessee that she withdrawn heavy amount of cash amounting Rs. 30,00,000/- for investing/running business and the same money was deposited after the gap of seven months carries no weight. I find that due to compulsion of demonetization, the money from undisclosed sources of income was deposited in the bank in order to exchange the old currency into new currency. From the perusal of Income Tax Return filed by the assessee, I find that there is no any capital account maintained by the assessee in ITR filed by her. The assessee is showing meagre amount to taxable income of Rs.2,43,850/- and after the perusal of assessment record I find that as per assessment record, the assessee is not having the worth of depositing such heavy amount of cash of Rs.30,00,000/- in her saving bank account.” But no other contrary judgment& fact were submitted by the revenue during the hearing before ITAT. I.T.A. No. 187/Asr/2021 8 7. We heard the rival submissions and considered the documents available in the record and the judgment of the Hon’ble Court is respectfully considered. The assessment was completed with a factual error. The withdrawn and deposit of cash with a gap of 70 days which was considered by the ld. AO as seven months. The ld. Counsel clearly stated that the sufficient cash was withdrawn in same bank account and after part utilization of the same; the amount was deposited in same HDFC Bank account. The ld. Appellate authority without considering the proper fact and submission of the assessee had passed the order ex parte. The CIT(A) was failed to dispose the appeal on merits and has not contended the explanation of the assessee. The said action of the CIT(A) against the law and it is a duty of the ld. CIT(A) to dispose of the appeal on merits and cannot be simply dismissed on the ground for non- appearance. The same view was taken by the ITAT Mumbai Bench in case of Marvel Industries Ltd. vs. DCIT, Circle 2 (2)(2), Mumbai 2022 (1) & TMI, 949- (ITAT Mumbai) as such the appellant filed an appeal before the Hon’ble ITAT against the order of 21.12.2021. The ld. Counsel, Mr. Kapoor also stated in the submission that the assessee was not able to present before the CIT(A) due to the fact that the appellant expired on 23.10.2020 thereafter her husband also expired on 03.11.2020. The copy of the deathcertificate I.T.A. No. 187/Asr/2021 9 of the assessee and her husband are being enclosed in page no. 10 to 11 of the APB. In these circumstances here the genuine cause for non-appearance before the CIT(A). We are in opinion that the assessee has sufficient cause during the depositing of cash in her bank account.Theheafty amount was withdrawn 70 days ago for utilising the same for the business of her son. Unused amount was deposited in the same bank account of the assessee. The source of deposit of cash was well explained before the revenue authorities by the assessee. In our considered view, therefore, the ld. Assessing Officer was indeed in error in adopting a wrong fact in his order. The grievance raised by the ld. Sr. Dr. in this appeal, is, therefore, devoid of any legally sustainable merits.We reject the addition amount of Rs.16,30,000/- made by the ld. AO. 9. In the result, appeal of the assessee bearing ITA 187/Asr/2021 is allowed. Order pronounced in the open court on 15.09.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT I.T.A. No. 187/Asr/2021 10 (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order