Kishor Madhav Paranjape, Pune V. Assistant Commissioner of Income-Tax, Circle 2(2), Pune

ITA 280/PUN/2022

AI Insights

The case involves Kirshor Madhav Paranjape, who appealed against the order of the CIT (A) confirming the addition of Rs. 23,00,000 to his income for A.Y. 2012-13, which was declared under the Income Disclosure Scheme (IDS) 2016. The primary contention was whether the income declared under IDS could be added to the regular assessment. The Assessing Officer had treated the amount as unexplained cash credit under section 68 of the Income Tax Act, 1961, following a search operation that revealed substantial cash deposits in the assessee's bank account. The ITAT, after considering the additional evidence presented, decided to remand the case back to the A.O for a fresh assessment, emphasizing the need to comply with the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124371 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-02-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Competent authority; Condonation of delay
• Section: 148; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, PUNE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA No. 280/PUN/2022 : A.Y. 2012-13 Kirshor Madhav Paranjape 1139 Venu Apartments, Off F.C. Road, Shivajinagar, Pune-411 016 PAN: ABIPP 3973 A Appellant Vs. The Asstt. CIT – CC (2) Pune Respondent Appellant by : Shri Suhas P. Bora Respondent by : Shri Ramnath P. Murkunde Date of Hearing :16-02-2023 Date of Pronouncement : 20-2-2023 ORDER PER SHRI PARTHA SARATHI CHAUDHURY, J.M. This appeal preferred by the assessee emanates from order of ld. CIT(A)-12, Pune dated 23-09-2019 A.Y. 2012-13 as per the following grounds of appeal. The following grounds are taken without prejudice to each other on facts and in law. 1. The learned CIT (A) has erred in confirming the action of the assessing officer of making an addition of Rs.23,00,0001- on account of declaration in IDS on the ground that the assessee was not eligible for declaring Rs.23,00,0001- in IDS, 2016 and appellant failed to provide explanation for source of said income disregarding the submissions given by the appellant. 2. The learned CIT(A) while confirming the addition Rs.23,00,0001- further erred in not appreciating the fact that the appellant had filed the revised statement incorporating the additional income before the DDIT(Inv.) and paid the taxes along with interest on 19.01.2015 which itself proves the bonafide intention and mistake of the appellant of not disclosing the business income without any malafide intention to evade tax liability. 3. The learned CIT(A) has further erred in not appreciating the contention that once the amount is declared under IDS, 2016 and the said declaration is accepted by the PCIT, Central, no addition can be made of the same amount in regular assessment. Though this ground is not taken before CIT (A), since it is legal ground and all facts are available the same can be taken before ITA T. 4. The ld. CIT(A) and A.O have erred in charging interest u/s 234B of the Act on assessed income without considering the provisions of law that interest 2 ITA No.280 of 2022 Kirshor M. Paranjape A.Y. 2012-13 u/s 234B of the Act is leviable on the tax on the total income s declared in returned income. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 2. At the outset, it is observed that this appeal is time-barred by 888 days. The assessee has filed condonation of delay petition as well as Affidavit which are placed on record. The ld. A.R for the assessee also submitted that out of the said delay of 888 days, 774 days were covered during the covid period. We have also perused the contents of the condonation petition as well as Affidavit and have heard the submissions of the ld. A.R. In our considered view, the delay caused is not attributable to the deliberate misconduct or malafide intention, if any, on the part of the assessee. This delay has been caused due to the circumstantial reasons and is not intentional on the part of the assessee. The ld. D.R did not deny that about 774 days out of the said period was covered due to the covid pandemic. Considering these facts, we condone the delay and the matter is heard on merits. 3. The relevant facts are that the the assessee individual filed his return of income for A.Y.2012-13 on 29-03-2014 declaring total income of Rs.52,85,999/-. The returned income comprised of business income on account of remuneration and interest received from partnership firm wherein the assessee is a partner. In the case of Lokmanya Multipurpose Co-operative Society Limited, a search action u/s 132 of the I T Act, 1961 (hereinafter referred to as the “Act”) was conducted by the Investigating Wing of Income Tax Department, Panjim. During the course of investigation, it was noticed that there is a huge cash deposit in the savings account of the assessee. When confronted with such huge cash deposit, the assessee admitted that cash of Rs. 23,00,000/- was deposited on 11-10-2011 in the Savings Bank account No. 97 standing in the name of the assessee with 3 ITA No.280 of 2022 Kirshor M. Paranjape A.Y. 2012-13 Lokmanya Multipurpose Co- operative Society Limited, Navi Peth Branch, Pune. Upon further enquiries regarding sources of such cash so deposited, the assessee admitted additional income of Rs. 23,00,000/- in his hands for A.Y.2012-13. The ld. A.O therefore was of the opinion that the assessee had not reported the income of Rs. 23,00,000/- in his original return of income filed on 29-03-2014. In view of these facts a notice u/s 148 of the Act was issued to the assessee for A.Y. 2012-13 after seeking appropriate approval from the concerned authority. In response to this notice, the assessee filed his return of income of Rs. 77,01,312/-. In the course of re-assessment proceedings, the assessee was specifically asked to explain whether an application made by the assessee under the Income Disclosure Scheme 2016 (hereinafter referred to as the “IDS 2016”) has attained the finality. The ld. A.R for the assessee had submitted that the assessee has not received any certificate in Form No. 4 from the Competent Authority. In other words, the assessee contended that he has declared Rs. 23,00,00/- in the IDS 2016 for which he has received a Certificate in Form No. 2 issued by Pr. CIT Pune and therefore, there was no valid ground for re-opening the assessment. The contention was not accepted by the ld. A.O and he observed that it was detected by the Investigation Wing, Panjim during the course of search proceedings in the case of Lokmanya Multipurpose Co- operative Society Ltd. on 23-09-2014 that the assessee had deposited huge cash in his bank account. The assessee admitted that he had deposited cash in his Savings Bank account with Lokmanya Multipurpose Co-operative Society Ltd. The assessee had also admitted before the Investigating authority that the said cash deposit was not revealed by him in his regular books of accounts relevant to 4 ITA No.280 of 2022 Kirshor M. Paranjape A.Y. 2012-13 A.Y. 2012-13 and not disclosed also in his return of income filed by him. Thus, it is seen that the assessee admitted that the said amount of Rs. 23,00,000/- as his undisclosed income which was not disclosed by him earlier. This amount was treated as unexplained cash credit u/s 68 of the Act. The action of the ld. A.O was upheld by the ld. CIT (A) as per his observations at para 8.3 of his order where he gives a categorical finding that the assessee neither during the assessment proceedings nor during the appellate proceedings could bring on record any evidences to prove that the cash deposit of Rs. 23,00,000/- was out of his business proceeds. 4. At the time of hearing, the ld. A.R for the assessee contended that they wish to file certain additional evidences which they have annexed in the paper book from pages 30 onwards upto page 46 and therein a copy of IDS Form No. 4 dated 12-02-2020 is also there and these evidences would be pertinent to consider the merits of the issue and therefore, he prayed that these evidences may be admitted and the matter may be remanded to the file of the ld. A.O. for re- adjudication as per law. The ld. D.R conceded the fact that as the copy of IDS Form No. 4 dated 12-02-2020 was not there before the Department earlier, the matter may therefore, be remanded back to the file of the ld. A.O. 5. Having heard the parties herein, considering the facts and circumstances, the orders of the subordinate authorities, the submissions of the parties and the additional evidences filed, we are of the considered view, in the interest of justice, these evidences may be admitted and the matter be remanded back to the file of the ld. A.O for re-adjudication as per law while complying with the principles of 5 ITA No.280 of 2022 Kirshor M. Paranjape A.Y. 2012-13 natural justice. In view thereof we set aside the order of the ld. CIT (A) and restore the matter to the file of the ld. A.O accordingly. Grounds of appeal of the assessee are allowed for statistical purposes. 6. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on this 20 th day of February 2023. Sd/- sd/- (R.S. SYAL) (PARTHA SARATHI CHAUDHURY) VICE PRESIDENT JUDICIAL MEMBER Pune; Dated, the 20 th day of February 2023 Ankam Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. D.R. ITAT „A‟ Bench 4. Guard File BY ORDER, Sr. Private Secretary ITAT, Pune. /// TRUE COPY /// 6 ITA No.280 of 2022 Kirshor M. Paranjape A.Y. 2012-13 1 Draft dictated on 16-02-2023 Sr.PS 2 Draft placed before author 16-02-2023 Sr.PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS 6 Kept for pronouncement on 16-02-2023 Sr.PS 7 Date of uploading of order 16-02-2023 Sr.PS 8 File sent to Bench Clerk 16-02-2023 Sr.PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order