Shri Nirmal Singh, Hanumangarh V. ITO, Ward-1, Hanumangarh

ITA 33/JODH/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8201 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-03-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 09-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Reasonable cause; Difference of opinion; Right to appeal; Tax effect; Condonation of delay
• Section: 147; 68; 69; 148; 271(1)(c); 154; 143(3); 234B; 274; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No.31 to 33/Jodh/2023 Assessment Year: 2013-14 Nirmal singh S/o Shri Gurdayal Singh Ward-4, Village- Satipura, Hanumangarh Junction-335512. [PAN: GRDPS2072E] (Appellant) Vs. Income Tax Officer, Ward-1, Hanumangarh. (Respondent) Appellant by Sh. Rajendra Jain, Adv. & Smt. Raksha Birla, C.A. Respondent by Sh. A.S. Nehra, Sr. DR Date of Hearing 18.03.2024 Date of Pronouncement 21.03.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM All these appeals filed by the assessee are directed against the separate orders of the CIT(Appeal), Bikaner , National Faceless Appeal Centre, (NFAC), Delhi, which is appearing in the chart filed by the assessee which is reproduced here in below : S.No. Description Total Income as determined Date of Order Tax/Penalty amount due Interest u/s 234A/B/C Total Demand 1 Return filed u/s 148 Rs.40,030 &Agri. Income of Rs.4 Lakhs 15.04.2017 Nil Nil Nil I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 2 2 Assessment Order u/s 147 / 143(3) Rs.4,90,030 &Agri. Income of Rs.4 Lakhs 27.12.2017 Rs.59,746 Rs.61,542 Rs.1,21,288 3 CIT(A)'s Order against Order u/s 147 / 143(3) Rs.3,50,030 &Agri. Income of Rs.4 Lakhs 28.09.2018 Rs.30,906 Rs.32,780 Rs.63,686 4 Order U/s 154 Rs.3,50,030 & Agri. Income of Rs.4 Lakhs 09.06.2020 Rs.95,799 Rs.86,890 Rs.1,82,689 5 CIT(A)'s order against Order u/s 154 Rs.3,50,030 &Agri. Income of Rs.4 Lakhs 30.12.2022 Rs.95,799 Rs.86,890 Rs.1,82,689 6 Order imposing Penalty u/s 271(1)(c) 19.03.2020 Rs.95,790 -- Rs.95,790 7 CIT(A)'s order against Order u/s 271(1)(c) 30.01.2023 Rs.95,790 -- Rs.95,790 These appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 2. Since the issues involved in these three appeals are related to the same assessee having same assessment order and the finding in quantum appeal will have a bearing on the appeal filed against the order u/s. 154 and 271(1)(c) by the assessee. Therefore, we are taking up the appeal of the assessee in quantum first which is registered as ITA No.31/Jodh/2023. 2.1 At the outset of hearing, the Bench observed that there is delay of 1505 days in filing of the appeal by the assessee for which the ld. AR of I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 3 the assessee filed an application for condonation of delay with following prayer:- “The appellant submits to have filed this appeal on 08.02.2023 against CIT (A)'s order dated 28.09.2018 which was served on 29.10.2018 obviously the appeal was filed late by 1562 days therefore the appellant had lodged application with Notarized Affidavit dated 06.02.2023 (Annexure-1) for condonation of said delay on the grounds of sufficient reasonable cause arisen on occurrence of following events firstly shown in Tabular Form which are subsequently discussed: S.No. Description Total Income as determined Date of Order Tax/Penalty amount due Interest u/s 234A/B/C Total Demand 1 Return filed u/s 148 Rs.40,030 &Agri. Income of Rs.4 Lakhs 15.04.2017 Nil Nil Nil 2 Assessment Order u/s 147 / 143(3) Rs.4,90,030 &Agri. Income of Rs.4 Lakhs 27.12.2017 Rs.59,746 Rs.61,542 Rs.1,21,288 3 CIT(A)'s Order against Order u/s 147 / 143(3) Rs.3,50,030 &Agri. Income of Rs.4 Lakhs 28.09.2018 Rs.30,906 Rs.32,780 Rs.63,686 4 Order U/s 154 Rs.3,50,030 & Agri. Income of Rs.4 Lakhs 09.06.2020 Rs.95,799 Rs.86,890 Rs.1,82,689 5 CIT(A)'s order against Order u/s 154 Rs.3,50,030 &Agri. Income of Rs.4 Lakhs 30.12.2022 Rs.95,799 Rs.86,890 Rs.1,82,689 6 Order imposing Penalty u/s 271(1)(c) 19.03.2020 Rs.95,790 -- Rs.95,790 7 CIT(A)'s order against Order u/s 271(1)(c) 30.01.2023 Rs.95,790 -- Rs.95,790 (a) The appellant had consistently explained to be a farmer whose only source of income was agriculture therefore it did not conceive to file voluntarily return of income because the income from agriculture was not chargeable to tax and such aspect stated by the assessee was also established by the fact of the assessment proceedings initiated on basis of huge deposits in the bank accounts during the year, was concluded after finding source of those deposits except the claim for cash in hand of Rs.4.50 Lakhs from past savings shown on 01.04.2012 in Abstract of Cash Flow Statement, to have been explained mainly from agriculture accordingly an addition of Rs.4.50 Lakhs to the income shown I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 4 in the return of income was made and demand of Rs.1,21,288 was consequently raised which had also been paid by the assessee. (b) The appellant had assailed impugned addition of Rs.4.50 Lakhs in the appeal before the CIT(A) who having allowed relief of Rs.1.40 Lakhs being withdrawal on 27.03.2012 rom account with arhatiya - M/s Rajender Kumar Ashok Kumar-Hanumangarh Jn, had sustained remaining addition of Rs.3.10 Lakhs vide its order dated 28.09.2018 thereby demand of Rs.1,21,288 was reduced to Rs.63,686 and the resultant refund too was given therefore the appellant became reluctant for indulgence in litigation by pursuing the sustenance of addition in further appeal before the Hon'ble Tribunal. (c) Order u/s 271(1)(c) levying penalty of Rs.95,790 equal to tax worked-out @ 30% laid u/s 115BBE was passed on 19.03.2020 thereafter an order of rectification u/s 154 holding the provisions of Section 115BBE to be applicable on the sustained addition of Rs.3.10 Lakhs was passed on 09.06.2020 with the reason that provisions of Section 115BBE effective from AY 2013-14 had are attracted where income includes some income relating to Section 68 and impugned addition of Rs.3.10 Lakhs to the income was made u/s 68 which was also sustained in appeal before the CIT(A) but tax was wrongly worked-out at the rates of normal slab during original assessment proceedings. (d) The appellant's inclination of non-indulgence in litigation did not mitigate by aforesaid both the orders the order u/s 271(1)(c) and the order of rectification u/s 154 because those orders being not tenable in law due to legal infirmities- maintenance of account books which is mandatorily required u/s 68, was categorically denied in Notarized Affidavit dated 25.09.2017 (Annexure-2) and Written-submissions dated 04.10.2017 (Annexure-3) filed during course of assessment proceeding was ignored while making addition of Rs.4.50 Lakhs with erroneous observations "रोकड़ खाते का 01.04.2012 कारोकड शेष 4,50,000-/ दशाŊया गया है, िजसे बाद मŐ करदाता Ȫारा िविभɄ तारीखों मŐ अपने बœक खाते मŐ जमा करवाया गया था। चूंिक करदाता Ȫारा पूवŊ वषŘ मŐ कोई आयकर िववरणी दाİखल नहीं की गयी है वनहीं रोकड़ शेष के संबंध मŐ कोई साƙ Ůˑुत िकया है।अतः िदनांक 01.04. 2012 को दशाŊया गया रोकड़ शेष राशी Ŝपये 50 लाख सही Ůतीत नहीं होता। फल ˢŜप रािशद,50,000 को आयकर अिधनयम, 1961 कीधारा68 के तहत करदाता की कर योƶ आय मŐ जोड़ा जाता है।" and nothing more relating to books of accounts was discussed in relevant Order Sheet (Annexure-4) of assessment proceedings and even the assessment order too had not discussed about maintenance / production of account books but erroneous reference to रोकड़ खाते का 01.04.2012 का रोकड़ शेष Rs.4.50 Lakhs appeared to have been made on basis of estimated cash in hand of Rs.4.50 Lakhs on 01.04.2012 for I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 5 past savings shown in the Abstract of Cash Flow Statement, were opined to be reversed in appeals being filed before CIT(A) NFAC. (e) Erstwhile aspirations/hope of success of the appellant had unfortunately vanished when appellate orders of CIT(A) NFAC passed on 30.01.2023 and 30.12.2022 had confirmed the findings given in the orders u/s 271(1)(c) and u/s 154 passed by AO though both those orders are contested in appeals before Hon'ble Tribunal. (f) Aforesaid both the appellate orders relating to penalty u/s 271(1)(c) and order of rectification u/s 154 had caused the appellant to suffer unexpected heavy tax liability because core-issue whether or not addition alleged to be made u/s 68 was legally justified when account books were not maintained and this legal issue can now be adjudicated by the Tribunal alone accordingly the appellant was advised for filing the appeal against the order dated 28.09.2018 passed by the CIT(A) in matter of assessment with application for condonation of the delay in filing appeal on the ground of bone fide reasonable sufficient cause existing in the light of aforesaid facts and circumstances. The appellant submits to get support from the judgment of Hon'ble Jaipur Bench of Tribunal (ITA No.316 to 318/JP/2020 decided on 28.01.2021) (Annexure-5) in the appeals of Sh.Rakesh Garg, Madanganj, Kishangarh vs. 1.T.O. Ward-2, Kishangarh which had discussed several decisions of other different courts. Annexure-1 Notarized Affidavit of the appellant dated 06.02.2023 Annexure-2 Notarized Affidavit of the appellant dated 25.09.2017 Annexure-3 Written Submission / Reply dated 04.10.2017 filed before the AO Annexure-4 Certified Order Sheet of relevant assessment proceedings Annexure-5 Decision dated 28.01.2021 by Hon'ble Jaipur Tribunal (ITA No. 316 to 318/JP/ 2020) in the appeals of Rakesh Garg, Madanganj, Kishangarh vs. I.T.O. Kishangarh.” 2.2 The ld. AR of the assessee vehemently submitted that considering tax effect being law he has considering the commercial expediency accepted the decision of CIT(A) where though his appeal was not considered in full. Thereafter as stated in the condonation application, and tabulated in chart at para 1, assessee was directed to pay the I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 6 higher rate of tax u/s 115BBE of the Act and also directed to pay the penalty u/s 271(1)(c) of the Act. This being subsequent event which is the reason for bringing the present appeal with a delay of 1505 days as observed by the registry. As the subsequent two order fastening more liability of higher tax and penalty he has challenged the finding of the ld. CIT(A) by filling this appeal though belatedly. 2.3 Per contra, the ld. DR vehemently opposed to the prayer of the assessee for condonation of delay. The ld. DR submitted that it was the decision of the assessee not to contest the appeal further and when the revenue has initiated consequential action the assessee cannot awake simply which he was sleeping for 1505 days. Based on these contentions he submitted that the appeal of the assessee not to be admitted and the same is required to be dismissed at this stage. 2.4 We have heard the rival contentions, perused the material placed on record. The Bench noted that there is force in the arguments raised by the assessee. The case of the assessee was re-opened on account of transaction of sale of immovable property which the ld. AO has accepted and has made the addition of cash which the assessee is claiming to have from the opening balance. Out of the addition of Rs. I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 7 4,50,000/- the ld. CIT(A) has considered the merits of the case for an amount of Rs. 1,40,000/- and therefore, since that amount being very much law and considering the litigation cost involved the assessee has consciously choose note to file the appeal. Therefore, on the subsequent events when he on that aspect of the matter further called upon to pay the higher rate of tax and penalty he has exercised his right of appeal on the quantum and considering that aspect of the matter we consider that the assessee’s substantiate right cannot be taken away for litigating the issue based on the set of the facts. Therefore, considering that aspect of the matter we hold that filling of an appeal on account of the subsequent event fastening more liability on the assessee can be reasonable cause for condoning the delay. The reasons advanced duly supported by the chart submitted in the condonation application. Considering that aspect of the matter and considering the decision of the apex court in the case of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) we condone the delay in filling the present appeal. 3.1 In ITA No. 31/Jodh/2023 the assessee has raised following grounds: - I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 8 “ Ld. CIT(A) was not justified in reducing addition from Rs. 4.50 lacs to Rs. 3.10 lacs by considering only instance of withdrawal of Rs. 1.40 lacs on 27.03.2012 from account with arhatiya and overlooking other relevant surrounding facts and circumstances placed before both the authorities-AO and CIT(A). 2. CIT(A) was not justified to uphold the addition of Rs. 3.10 lacs cursorily stated to be made under section 68 for opening cash in hand on 01.04.2012 claimed to be past saving from agriculture especially when assessee had consistently stated to have never maintained books of accounts and had enjoyed only source of income from agriculture.” 3.2 In ITA No. 32/Jodh/2023 the assessee has raised following grounds: - “ 1. Ld. CIT(A), in the facts and circumstances, had erred in law and in facts in sustaining order imposing penalty for the default of having furnished incorrect particulars of income though not specified in penalty show cause notice and mandatory provisions of section 274 was violated due to non-consideration of the replied filed. 2. Ld. CIT(A) in the facts and circumstances where assessee who was a farmer having consistently stated to have no source other than agriculture and never maintained books of accounts, was not justified in upholding order levying penalty under section 271(1)(c). 3. Ld. CIT(A) was justified to sustain the penalty equal to tax of Rs. 95790/- received under section 154 making section 115BBE attracted for the addition said to be under section 68 subsequent to original conclusion of assessment order duly adjudicated in appeal by CIT(A) accordingly the penalty happened to be unreasonably excessive and exorbitant.” 3.3 In ITA No. 33/Jodh/2023 the assessee has raised following grounds: - “1. In the facts and circumstances ld. CIT(A) had erred in law and in facts, in dismissing the appeal and to uphold invocation of proceedings under section 154, without adjudicating on grounds of appeal specifically taken in the appeal and also discussed in written submissions filed during hearing of appeal. I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 9 2. In the facts and circumstances Ld. CIT(A) had erred in law and in facts in upholding invocation of proceedings under section 154 especially when order of assessment had merged with order of CIT(A) passed in the appeal against assessment order moreover when the matter to make provisions of section 115BBE applicable to the addition of Rs. 4.50 lac or 3.10 lac on basis of mere mention of addition u/s 68 which legally required credit entry found in books of account maintained whereas in the present no books of account was found to be kept, had involved debate entailing difference of opinion. 3. In the facts and circumstances ld. CIT(A) was not justified to uphold proceedings of Section 154 for enlarging tax liability already determined on conclusion of assessment order and appellate order. 4. In the facts and circumstances ld. CIT(A) was justified to uphold enlargement of interest charged under section 234A, 234B and 234C.” 4. The brief facts of the case is that the case of the assessee was reopened under the provisions of section 147 of the Act based on the information that the assessee has deposited a sum of Rs.48,53,000/- in the bank account maintained by him with HDFC Bank, and a sum of Rs. 93,00,000/-in the State Bank of India. The assessment order consequent the reopening was completed on 27.12.2017 accepting the source of the money deposited into the bank being the sales proceedings of the sale of agricultural land. The assessee in that re-opened proceeding submitted the cash flow statement. The same is extracted herein below:- I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 10 Considering the explanation of the assessee furnished the ld. AO has passed an order u/s 143(3) read with section 147 of the Act making an addition of Rs. 4,50,000/- in the hand of the assessee considering that the assessee has not shown any proof of the having that cash balance I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 11 as on that date and ld. Assessing Officer merely on the reasons that in the earlier year there is no income proof submitted by the assessee and therefore, the opening balance of Rs. 4,50,000/- was added as income of the assessee u/s. 68 of the Act. 5. Aggrieved from the said finding of the ld. Assessing Officer, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee before the ld. CIT(A), the relevant finding of the ld. CIT(A) is reiterated as under:- “I have considered the facts of the case and the submission made. It is fact that the appellant was enjoying adequate source of income from agriculture. There were frequent operations in his bank accounts out of the source of agriculture which AO had accepted on the strength of documents of the lands etc. filed. I find one withdrawal of Rs.1,40,000/- specifically on 27.03.2012 just 4 days before 01.04.2012 on which date past savings of Rs. 4,50,000/- was claimed to be available, from his arhatiya's account, except this, the appellant has not been able to give any satisfactory explanation in respect of the balance amount of Rs. 3.10 lakh. It is also observed that the Assessing Officer has accepted appellant's explanation to a large extent and since no explanation was forth coming in respect of 4.50 lakh he made the addition. The appellant too has furnished a satisfactory explanation but has failed to explain, the difference of Rs. 3.10 lakh of deposits. Accordingly the addition of Rs. 4.50 lakh made by the Assessing Officer is sustained to the extent of Rs. 3.10 lakhs. The ground is partly allowed.” 6. Subsequent to this appeal order, the assessee on account of the fact that the tax effect of litigating the issue further and the tax demand was not much of a difference he has not filed the appeal against this order but when the quantum order after the decision of the ld. CIT(A) I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 12 again made subjected to levy of higher rate of tax by passing an order u/s. 154 and thereafter the levy of penalty u/s. 271(1)(c) since the subsequent even is only on account of the fact that the assessee has decided not to litigate the issue further. But considering the subsequent event the assessee preferred the present appeal with a prayer of condonation and the bench considered the reasons decided to take the appeal of the assessee on merit. In the present appeal the assessee has challenged the sustained amount by the ld. CIT(A) raising two grounds. 7. Apropos to the grounds so raised the ld. AR of the assessee submitted that out of the addition of Rs. 4,50,000/- the ld. CIT(A) has reduced is at Rs. 3,10,000/- which is also not correct that considering the fact that the assessee is explains holding of land and since there is no other source of income chargeable to tax in the hand of the assessee holding as cash Rs. 3,50,000/- and that too as opening balance cannot be added in the hand of the assessee. Not only that if that cash is not believed in the hands of the assessee the closing balance is more than the Rs. 4,50,000/- which the assessee has not invested or not deposited into the bank account. The reasons for re-opening thus explained and no separate addition can be made in the re-opened assessment. In addition I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 13 to the above arguments so made the ld. AR of the assessee also submitted following written submissions: “MAY IT PLEASE BE YOURS The appellant anticipating condonation to have been granted for the delay in filing of appeal, submits that the appeal involved the following grounds: 1. Ld. CIT(A) was not justified in reducing addition from Rs.4.50 Lakhs to Rs.3.10 Lakhs by considering only instance of withdrawal of Rs.1.40 Lakhs on 27.03.2012 from account with arhatiya and overlooking other relevant surrounding facts and circumstances placed before both the authorities - AO and CIT(A). 2. Ld. CIT(A) was not justified to uphold the addition of Rs.3.10 Lakhs cursorily stated to be made under Section 68 for cash in hand on 01.04.2012 claimed to be past savings from agriculture especially when assesse had consistently stated to have never maintained books of accounts and had enjoyed only source of income from agriculture. Ground No.1 is against sustenance of the addition of Rs.3.10 Lakhswith respect to appellant’s claim for cash in hand of Rs.4.50 Lakhs on 01.04.2012, made under Section 68. The appellant submits to reiterate Hindi observations of AO made in the assessment order dated 27.12.2017 - “रोकड़ खाते का 01.04.2012 कारोकड़ शेष 4,50,000/- दशाŊया गया है, िजसे बाद मŐ कर दाता Ȫारा िविभɄ तारीखों मŐ अपने बœक खाते मŐ ज़मा करवाया गया था l चूँिक करदाता Ȫारा पूवŊ वषŘ मŐ कोई आयकर िववरणी दाİखल नहीं की गयी हैव नहीं रोकड़ शेष के संबध मे कोई साƙ Ůˑुत िकया हैl अतः िदनांक 01.04.2012को दशाŊया गया रोकड़ शेष राशी Ŝपये 4.50 लाख सही Ůतीत नहीं होताI फलˢŝप रािश 4,50,000कोआयकरअिधनयम, 1961कीधारा 68 के तहत कर दाता की कर योƶ आय मे जोड़ा जाता हैI The appellant submits to have been subjected to the proceedings u/s 147 invoked on basis of huge deposits of Rs.93 Lakhs and Rs.48.53 Lakhsnoticed in the bank accounts. Different type of evidences-Sale-deed, Agreement to sell, Jamabandi(land titles documents), Girdawari (actual sowing of crops on the lands), Ledger account from arhatiya, agricultural income and Abstract of Cash Flow Statement showing cash in hand of Rs.4.50 Lakhs on 01.04.2012 which were relatable to the agriculture alone, furnished to explain the source of bank depositshad beendiscussed in the order of assessment then the source of impugned deposits was stated to be accepted largely exceptthe“ Cash of past savings” of Rs.4.50 Lakhsshown on 01.04.2012 for which addition of Rs.4.50 Lakhs with I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 14 aforesaid observations was made u/s 68 and had charged the tax laid under usual slabstherefore these facts and circumstances relating to the assessment and tax liabilities when considered in totality adequately suggest for the addition of Rs.4.50 Lakhsto have been made in usualroutine manner after non-acceptance of the claim for past savings however Ld. CIT(A) having found specific withdrawal of Rs.1.40 Lakhson 27.03.2012 from assessee’s account with the arhatiya-M/s Rajender Kumar Ashok Kumar had reduced impugned addition to Rs.3.10 Lakhs. The appellant therefore submits that extent of its claim for past savings of Rs.4.50 Lakhs was not abnormal in its case where (i) 30 Bigha of agriculture lands were owned by the assessee wherefrom gross agri.annual income of Rs.8-10 Lakhs was derived; (ii) Agriculture was only source of its incomestated/affirmed in the Affidavit during whole proceedings; (iii) The assessee was not found to be indulged in other activities than agriculture;and (iv) Possibility of availability of some more amount in addition to Rs.1.40 Lakhs withdrawn 4 days before 01.04.2012 from arhatiya’s account on 27.03.2012for which the CIT(A) had also given relief, could not be denied especially in cases of farmer engaged only in agriculture which was its only source of income therefore sustenance of addition at Rs.3.10 Lakhs was not justified. Ground No.2 is against validity of addition under Section 68 made/sustained at Rs.3.10 Lakhs by the CIT(A). Relevant observations in Hindi made by AO in the assessment orderdated 27.12.2017 are reiterated - “रोकड़ खाते का 01.04.2012 कारोकड़ शेष 4,50,000/- दशाŊया गया है, िजसे बाद मŐ करदाता Ȫारा िविभɄ तारीखों मŐ अपने बœक खाते मŐ ज़मा करवाया गया था lचूँिक करदाता Ȫारा पूवŊ वषŘ मŐ कोई आयकर िववरणी दाİखल नहीं की गयी है व नहीं रोकड़ शेष के संबध मे कोई साƙ Ůˑुत िकया हैl अतः िदनांक 01.04.2012 को दशाŊया गया रोकड़ शेष राशी Ŝपये 4.50 लाख सही Ůतीत नहीं होताI फलˢŝप रािश 4,50,000 को आयकर अिधनयम, 1961की धारा 68 के तहत कर दाता की कर योƶ आय मे जोड़ा जाताहै I” The appellants submits that AO had stated nothing except aforesaid observations in respect of maintenance of account-books and/or its production during assessment proceedings evident from Order Sheetrelating to assessment proceedings (Annexure-4) whereas provisions of section 68-‘Where any sum is found credited in the books of accounts of an assessee maintained for any previous year .........’- had required credit of the sum in the books containing maintained by the assessee which was absent in the present case of the assessee who had categorically denied to maintain books of accounts in its Notarized Affidavit dated 25.09.2017 (Annexure-2) and Written-submissions/reply dated 04.10.2017 (Annexure-3)filed during assessment proceedings obviously AO would have no occasion for finding the credit of Rs.4.50 Lakhs on 01.04.2012 therefore its I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 15 observations referring to Rs.4.50 Lakhs on 01.04.2012 shown as रोकड़ खाते का 01.04.2012 का रोकड़ शेषappeared to have been based on Abstract/Statement of Cash Flow (Annexure-6)which had contained Cash of Past Savings of Rs.4.50 Lakhsshown on 01.04.2012, theAppellant vehemently submits / contends to have not been provided opportunity of hearing to clarify or refute the AO’s observations alleging Rs.4.50 Lakhs on 01.04.2012 as रोकड़ खाते का 01.04.2012 का रोकड़ शेषespecially when maintenance of books of account was denied before exercising authority to make addition u/s 68 therefore the assessment in making addition of Rs.4.50 Lakhs / Rs.3.10 Lakhs u/s 68 was vitiated under law. Following judgments in support of its contentions that maintenance of books of account was necessary for applying provisions of Section 68, are relied: CIT vs. P. Mohanakala (SC) – (2007) 161 Taxman 169 – A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by the assessee, that such credit has to be of a sum during the previous year, and the assessee offers no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee, in the opinion of AO, is not satisfactory. It is only then the sum so credited may be charged to income tax as income of the assessee of that previous year. Anand Ram Raitani vs. CIT - (1997) 223 ITR 544 (Gauhati) – The assessing Officer before invoking the power under section 68 must be satisfied that there are books of account maintained by the assessee and the cash credit is recorded in the said books of account. The existence of books of accounts is a condition precedent for invoking of the power. The appellant submits that it was not justified to disapprove the estimated past savings of Rs.4.50 Lakhs on 01.04.2012 claimed in the case of assessee- farmer who had owned adequate lands of 30 Bighawhich were yielding averagely annual income of Rs.8-10 Lakhs and had enjoyed no source other than agriculture.” 8. Per contra, the ld. DR relied upon the finding of the ld. CIT(A) and submitted that based on the submission of the assessee ld. CIT(A) has already granted relief to the assessee and therefore, there is no merit in the arguments furnished by the ld. Assessing Officer. I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 16 9. We have heard the rival contentions, perused the material placed on record. The Bench noted that it is not under dispute that the assessee explained the source of cash deposited in his bank account on account of sale of agricultural land and for that reason only the case was re-opened. The assessee has explained the deposit in the cash in the hand of the assessee and while furnishing the cash flow statement/cash book claimed opening balance of Rs. 4,50,000/- which the ld. CIT(A) has reduced to Rs. 3.10,000/-. The bench noted that there is no addition apropos to the reasons for re-opening the case. Though the opening of the cash is not found to be in the hands of the assessee in the same statement the assessee is found to have the cash balance of Rs. 8,12,000/-. Thus, we note that if the opening balance is not considered as the holding of the cash the reasons for re-opening does not warrant any addition. This aspect of the matter has not been controverted by the ld. DR. Thus, what the ld. AO added was the opening balance of cash in hand in this year which is legally impermissible on the face of it u/s. 68 of the Act. The provision of section 68 speaks of the credit found during the previous year in the books of account maintained by the assessee. Therefore, the law is well settled that credit found on the first day or carried forward from the preceding year cannot be added in this year. This issue has been dealt by the co-ordinate bench in Parmeshwar I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 17 Bohra v/s ITO 27 TW 55(JD). Page 61 para 22 it was held that “-- Therefore, we hold that the opening capital cannot be added as unexplained investment u/s 69 of the Act for the AY 1993-94.” This decision was affirmed in CIT v/s Parmeshwar Bohra (2007) 301 ITR 404 (Raj.) (DPB 50-52) holding that clear finding recorded by the Tribunal that the impugned amount was credited in the books of account of the assessee in the earlier previous year and was shown as closing capital of that year – carried forward amount of the previous year does not become an investment or cash credit of the relevant year. Respectfully following the finding of the co-ordinate bench and affirmed by the jurisdictional high court we direct the ld. AO to delete the addition so made in the assessment order so passed by him on 27.12.2017. In terms of these observation ground no. 1 & 2 raised by the assessee are allowed. 10. Since, we have allowed the appeal of the assessee in quantum, the subsequent appeal in ITA No. 32/Jodh/2023 for levy of penalty on the addition made in the assessment order and appeal in ITA No. 33/Jodh/2023 against the order of the ld. CIT(A) which based on the order passed u/s. 154 of the Act charging the tax u/s 115BBE of the act becomes infructuous and considered as educative in nature and I.T.A. No.31 to 33/Jodh/2023 Nirmal Singh vs. ITO 18 therefore, the same is also allowed for statistical purpose. In terms of these observations appeal of the assessee in ITA No. 31/Jodh/2023 is allowed and appeal in ITA no. 32 & 33/Jodh/2023 allowed for statistical purpose. In the result, the appeals of the assessee are allowed. Order pronounced in the open Court on 21/03/2024. Sd/- Sd/- (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) Judicial Member Accountant Member Santosh (On Tour) Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order