SHRI PILLU RAM SAHAL, JAIPUR V. INCOME TAX OFFICER, WARD-4-2, JAIPUR

ITA 306/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7775 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA J DHK
• Keywords: Unexplained investment; Tangible material; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 68; 69; 148; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH A , JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE : SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 306/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI PILLU RAM SAHAL PLOT NO. 48, SHYAM VIHAR, BEIHIND MILAN CINEMA, NEAR CASTING FACTORY, JAIPUR CUKE VS. THE ITO WARD- 4 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: CIXPS 5711 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI, CA JKTLO DH VKSJ LS@ REVENUE BY : MS.CHANCHAL MEENA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/01/2020 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07 /01/2020 VKNS'K@ ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A), AJMER DATED 28-01-2019 FOR THE ASSESSMENT Y EAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIONS OF THE AO IN REOPENING THE ASSESSMENT U/S 147 OF THE I.T. ACT, 1961. THE A CTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAI NST THE FACTS OF THE ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 2 CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REASSESSMENT PROCEEDINGS BEING ILLEGAL AND WITHOUT JURISDICTION. . (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIONS OF THE AO IN ISSUING NOTICE U/S 148 OF THE I.T. ACT, 1961 WITHOUT OBTAIN ING SANCTION UU151 OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REASSESSMENT PROC EEDINGS BEING ILLEGAL AND WITHOUT JURISDICTION. (3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTIONS OF THE AO IN MAKING AN ADDITION OF RS. 15,50,000/- ON ACCOUNT OF ALLEGED U NEXPLAINED CASH U/S 68 OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE ADDITION OF RS. 1 5,50,000/- 2.1 THE GROUND NOS. 1 AND 2 OF THE ASSESSEE ARE REG ARDING VALIDITY OF INITIATION OF PROCEEDINGS U/S 147/148 OF THE ACT. 2.2 THE ASSESSEE IS AN INDIVIDUAL AND NOT FILED THE RETURN OF INCOME U/S 139 OF THE ACT. THE AO ON THE BASIS OF INFORMATION RECEIVED NOTED THAT THE ASSESSEE HAS MADE THE DEPOSIT IN CASH OF RS. 14 .00 LACS IN THE BANK ACCOUNT WITH BANK OF BARODA. THE AO HAD INITIATED T HE PROCEEDINGS U/S 147/148 OF THE ACT BY ISSUING NOTICE U/S 148 ON 27- 03-2017. THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF T HE ACT ON 12-10-2017 WHEREBY THE ADDITION OF RS. 15.50 LACS WAS MADE ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT. THE ASSESS EE CHALLENGED THE ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 3 ACTION OF THE AO INCLUDING THE VALIDITY OF REOPENIN G OF ASSESSMENT BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 2.3 BEFORE THE TRIBUNAL, THE LD.AR OF THE ASSESSEE SUBMITTED THAT DUE APPROVAL GRANTED BY THE LD. PR.CIT IS MECHANICAL AN D WITHOUT ANY APPLICATION OF MIND. THEREFORE, THE REOPENING OF AS SESSMENT IS NOT SUSTAINABLE IN LAW. IN SUPPORT OF HIS CONTENTION, T HE LD.AR OF THE ASSESSEE RELIED ON FOLLOWING DECISIONS. (1) CHHUGAMAL RAJPAL VS S.P. CHALIHA (1971) 79 ITR 603 (SC) (2) AMARLAL BAJAJ VS ACIT (2013) 37 TAXMANN.COM 7 (MUMBAI TRIB) (3) PIONEER TOWN PLANNERS PVT. LTD VS DCIT (ITA NO. 132/DEL/2018 - ITAT DELHI BENCH) THUS THE LD.AR OF THE ASSESSEE SUBMITTED THAT LD. P R.CIT JUST NOTED THE WORD YES AND AFFIXED HIS SIGNATURE THEREUNDER BY GRANTING THE APPROVAL MECHANICALLY AND WITHOUT APPLICATION OF MIND TO THE FACTS OF THE CASE. THEREFORE, THE SAID APPROVAL GRANTED BY THE LD. PR. CIT IS NOT THE VALID SANCTION AND CONSEQUENTLY THE REOPENING OF THE ASSE SSMENT IS LIABLE TO BE QUASHED. ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 4 2.4 ON THE OTHER HAND, THE LD. DR SUBMITTED THAT WH EN IT IS A CASE OF DEPOSIT OF CASH IN THE BANK ACCOUNT OF THE ASSESSEE WHICH IS NOT IN DISPUTE THEN THE SAID FACTS ITSELF CONSTITUTE THE TANGIBLE MATERIAL TO FORM THE BELIEF THAT INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMEN T AS THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME. THEREFORE, IN THE F ACTS AND CIRCUMSTANCES OF THE CASE WHEN THERE IS NO POSSIBILITY OF ANY SEC OND VIEW THEN CONSIDERING THOSE REASONS RECORDED BY THE AO, THE A PPROVAL GRANTED BY THE LD. PR.CIT ON THE BASIS OF RECOMMENDATION OF JC IT IS VALID AND PROPER. IN SUPPORT OF HER CONTENTIONS, THE LD. DR H AS RELIED ON THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF PREM CHAND SHAH (JAISAWAL) VS ACIT, 383 ITR 597. 2.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE MATERIALS AVAILABLE ON RECORD. THE AO HAS RECORDED THE REASON S FOR REOPENING OF THE ASSESSMENT AS UNDER:- AS PER ITS DETAILS OF F.Y. 2009-10, THE ASSESSEE HAS DEPOSITED CASH OF RS. 14,00,000/- IN BANK OF BARODA , VKI AREA, JAIPUR DURING THE F.Y. BUT NO RETURN OF INCOME HAS BEEN FILED FOR THE A.Y. 2010-11. THUS THIS TRANSACTION IS NOT VERI FIABLE AND THE ASSESSEE DID NOT DISCLOSE FULLY AND TRULY ALL MATER IAL FACTS NECESSARY FOR ASSESSMENT. THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME OF RS. 14,00,000/- HAS ESCAPED ASSESSMENT. ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 5 IN VIEW OF THE ABOVE REASONS, IT IS REQUESTED THAT NECESSARY APPROVAL MAY KINDLY BE ACCORDED. THE AO HAS FOUND OUT THE FACTS OF DEPOSIT OF CASH O F RS. 14.00 LACS IN THE BANK ACCOUNT OF THE ASSESSEE AND NO RETURN OF INCOM E HAS BEEN FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THUS THIS VERY FACT OF DEPOSIT OF CASH OF RS. 14.00 LACS AND NOT FILING OF THE RETURN OF INCOME BY THE ASSESSEE ITSELF CONSTITUTE A TANGIBLE MATERIAL TO FORM THE BELIEF THAT INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. WE FURTHER NOTE THAT JCIT AFTER CONSIDERING THE REASONS ALSO RECOMMENDED THE REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148 OF TH E ACT. BASED ON THESE FACTS, THE LD. PR.CIT FINALLY GRANTED THE APPROVAL. THEREFORE, IT WAS NOT A CASE WHERE THE PRUDENT PERSON COULD HAVE TAKEN ANOT HER VIEW OR OPINION. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) UPHOLDING THE VALIDITY OF REOPENI NG OF THE ASSESSMENT. 3.1 THE GROUND NO. 3 OF THE ASSESSEE IS REGARDING A N ADDITION OF RS. 15.50 LACS MADE U/S 68 OF THE ACT. 3.2 THE AO MADE AN ADDITION ON ACCOUNT OF UNEXPLAIN ED CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE CONTENDED BEFORE THE AO AS WELL AS LD. CIT(A) THAT THIS AMOUN T WAS DEPOSITED OUT OF ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 6 PAST SAVINGS. THE ASSESSEE FURTHER EXPLAINED THAT IT IS HIS LIFE LONG SAVINGS AND FINALLY DEPOSITED IN THE BANK ACCOUNT AS IT WAS REQUIRED BY HIS SON FOR BUSINESS PURPOSES. THEREFORE, DUE TO CO MPULSION OF THE WIFE OF THE ASSESSEE, THE ASSESSEE HAD DEPOSITED THIS AMOUN T IN THE BANK ACCOUNT WHICH WAS UTILIZED BY HIS SON FOR HIS BUSINESS PURP OSES. THE AO FOUND THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE EXPLANA TION OF SOURCE OF DEPOSIT BY ANY DOCUMENTARY EVIDENCE. THE LD. CIT(A) HAS CON FIRMED THE ADDITION MADE BY THE AO. 3.3 BEFORE US, THE LD.AR OF THE ASSESSEE SUBMITTED THAT WHEN THE AO HAS REJECTED THE CONTENTION OF THE ASSESSEE OF PAST SAVINGS DUE TO MEAGER INCOME THEN THE AMOUNT DEPOSITED BY THE ASSESSEE IN THE BANK ACCOUNT CANNOT BE ASSESSED AS INCOME OF THE ASSESSEE AND T HE AO HIMSELF HAS GIVEN THE FINDINGS THAT THE ASSESSEE WAS NOT HAVING SUFFICIENT INCOME TO SAVE HUGE AMOUNT. THUS THE LD.AR OF THE ASSESSEE CO NTENDED THAT THE AMOUNT WHICH WAS USED BY HIS SON WHO BECOMES THE B ENEFICIAL OWNER OF THE AMOUNT COULD HAVE BEEN ASSSSED IN THE HANDS OF THE SON AND NOT IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF HIS CONTENTION S, THE LD.AR OF THE ASSESSEE RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS SMT. P.K. NOORJAHAN (1999) 103 TAXMAN 382 ( SC). THE LD.AR OF ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 7 THE ASSESSEE SUBMITTED THAT HON'BLE SUPREME COURT U PHELD THE ORDER OF THE TRIBUNAL HOLDING THAT THE ASSESSEE COULD NOT BE CREDITED WITH HAVING MADE ANY INCOME OF HER OWN. THE LD.AR OF THE ASSESS EE THUS CONTENDED THAT WHEN THE ASSESSEE WAS NOT HAVING SUFFICIENT IN COME TO MAKE DEPOSIT IN THE BANK ACCOUNT THEN THE SAID AMOUNT CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. 3.4 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK. THE AO HAS NOTED THAT EXCEPT CLAIMING THE OPENING BALANCE OF RS. 15.75 LACS TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE FOR SAVING OF THE SAID AMOUNT. 3.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE MATERIALS AVAILABLE ON RECORD. THE FACTS ARE NOT IN DISPUTE T HAT THE ASSESSEE HAS DEPOSITED THE CASH IN THE BANK ACCOUNT TO THE TUNE OF RS. 14.00 LACS ON 16- 02-2010 WITH BANK OF BARODA. THE SAID AMOUNT WAS US ED FOR TAKING THE DRAFT ON 18-02-2010. THE ASSESSEE EXPLAINED BEFORE THE AO THAT THE DEPOSITS OF THE CASH WERE MADE OUT OF PAST SAVINGS OF THE ASSESSEE. THE LD.AR OF THE ASSESSEE PRODUCED CASH BOOK PREPARED B Y THE ASSESSEE TO ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 8 SHOW THAT THIS WAS AN OPENING BALANCE. HOWEVER, SIN CE THE ASSESSEE WAS NOT ASSESSED TO TAX AND THERE WAS NO SUPPORTING EVI DENCE FOR HAVING THE OPENING CREDIT BALANCE OF RS. 15.75 LACS, THEREFORE , THE AO AFTER ALLOWING THE BENEFIT OF RS. 25,000/- HAS MADE THE ADDITION O F REMAINING AMOUNT OF RS.15.50 LACS. THOUGH THE SAID ADDITION MADE BY TH E AO IS BASED ON CASH BOOK AND OVER AND ABOVE THE DEPOSIT OF RS. 14. 00 LACS IS NOT JUSTIFIED WHEN CASH BOOK ITSELF WAS REJECTED BY THE AO, HOWEV ER, THE QUESTION REMAINS REGARDING THE SOURCE OF DEPOSIT OF RS. 14.0 0 LACS. WE FIND THAT EXCEPT THE CASH BOOK PREPARED BY THE ASSESSEE IN S UPPORT OF THE SOURCE OF DEPOSIT, NO OTHER MATERIAL WAS PRODUCED BY THE ASSE SSEE REGARDING THE PAST SAVINGS OF THE ASSESSEE. THEREFORE, THE EXPLAN ATION OF THE ASSESSEE REGARDING THE BANK DEPOSIT IN THE BANK WAS NOT SATI SFACTORY DUE TO THE FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN THE SOURCE/DEPOSITS. THE ADDITION MADE BY THE AO IS BASED ON THE FACTS OF TH E CASE. AS REGARDS THE DECISION RELIED ON BY THE LD.AR OF THE ASSESSEE IN THE CASE OF CIT VS SMT. P.K. NOORJAHAN (SUPRA), IT IS PERTINENT TO NOTE THA T IN THE SAID CASE IT WAS FOUND THAT THE ASSESSEE WAS EVEN NOT CAPABLE OF EAR NING INCOME DUE TO HER AGE AT THAT POINT OF TIME. THE ASSESSEE ALSO EXPLAI NED THE SOURCE OF INVESTMENT AS INCOME FROM THE PROPERTIES WHICH WERE LEFT BY HER MOTHERS ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 9 FIRST HUSBAND. THOUGH THE SAID EXPLANATION WAS NOT FOUND TO BE SATISFACTORY, HOWEVER, BY CONSIDERING THE SURROUNDI NG CIRCUMSTANCES THAT THE ASSESSEE BEING A MUSLIM LADY OF 20 YEARS WAS NO T HAVING ANY SOURCE OF INCOME, THEREFORE, SHE WAS NOT CAPABLE OF EARNIN G ANY INCOME. THE ADDITION MADE BY THE AO WAS DELETED. THE SAID DECIS ION WAS BASED ON PECULIAR FACTS. IN THE CASE IN HAND, THE ASSESSEE N EVER EXPLAINED BEFORE THE AO THAT THE SAID AMOUNT BELONGS TO HIS SON BUT RIGH T FROM BEGINNING THE ASSESSEE HAS BEEN CLAIMING THAT THIS DEPOSIT IS SOU RCED BY HIS PAST SAVINGS. ONCE THE ASSESSEE IS CAPABLE OF EARNING INCOME THEN FAILURE TO EXPLAIN THE SOURCE OF DEPOSIT IN THE BANK WOULD ATTRACT THE PRO VISIONS OF SECTION 69 OF THE ACT. HENCE, IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, PLEA OF THE ASSESSEE CANNOT BE ACCEPTED THAT THE DISCLOSED SOUR CE OF INCOME OF THE ASSESSEE IS NOT SUFFICIENT FOR MAKING THE DEPOSIT I N THE BANK. IF THE SAID AMOUNT OF DEPOSIT CANNOT BE ASSESSED AS INCOME OF T HE ASSESSEE THEN THE VERY OBJECT AND PURPOSE OF PROVISIONS OF SECTION 69 OF THE ACT IS DEFEATED. SECTION 69 OF THE ACT CONTEMPLATES THAT IF THE ASSESSEE IS FOUND TO HAVE INVESTED MONEY WITHOUT EXPLAINING THE SOURC E OF THE SAME THEN IT WILL BE DEEMED AS UNEXPLAINED INVESTMENT. THEREFORE , THE REASONS FOR FAILURE OF THE ASSESSEE TO EXPLAIN THE SOURCE OF DE POSIT IN THE BANK ACCOUNT ITA NO.306/JP/2019 SHRI PILLU RAM SAHAL VS ITO , WARD- 4(2), JAIPUR 10 AS NOT HAVING SUFFICIENT DISCLOSED SOURCE OF INCOME CANNOT BE A GROUND FOR IMMUNITY FROM ATTRACTING THE PROVISIONS OF SEC TION 69 OF THE ACT AND CONSEQUENTIAL DELETION OF SUCH ADDITION MADE BY THE AO. THE GROUND NO. 3 OF THE ASSESSEE IS DISMISSED. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 07 /01/ 2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07 /01/ 2020 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI PILLU RAM SAHAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 4(2), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.306/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR