HARBANS SINGH, MANSA V. INCOME TAX OFFICER WARD - 1 (4), MANSA

ITA 40/ASR/2022

AI Insights

The case involves Sh. Harbans Singh, an agriculturist, who appealed against the order of the CIT(A) National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2017-18. The primary contention was regarding the addition of Rs. 12,00,000 as unexplained income under Section 69A of the Income Tax Act, 1961, due to cash deposits made during the demonetization period. The AO had also invoked Section 115BBE, treating the deposits as undisclosed income. The CIT(A) upheld the AO's decision, noting the assessee's failure to comply with multiple notices and provide sufficient evidence to substantiate the source of the cash deposits. However, the Tribunal found merit in the assessee's additional submissions and evidence, leading to the restoration of the case to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114381 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 20-02-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 144; 142(1); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (VIRTUAL COURT) BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T. A. No. 40/Asr/2022 Assessment Year: 2017-18 Sh. Harbans Singh, Vill. Jasarhwal Bhikhi Harbans Sigh S/o Prithi, VPO Bhikhi Mansa, Teh. Mansa, Mansa 151504 [PAN: GKZPS 6124N] (Appellant) V. Income Tax Officer, Ward -1(4), Mansa (Respondent) Appellant by None (Written submission) Respondent by Sh. Rajiv Wadhera, Sr. D.R. Date of Hearing : 06.02.2023 Date of Pronouncement : 08.02.2023 ORDER Per Dr. M. L. Meena, AM: The present appeal has been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 19.12.2021 in respect of Assessment Year 2017-18. ITA No. 40/Asr/2022 Harbans Singh v. ITO 2 2. The assessee has raised the following grounds of appeal: “1. The assessee was having sufficient cash in hand on the date i.e. 12/11/2016 of cash deposit of Rs.1200000/- (12 lakhs) in the impugned bank i.e. Axis Bank, Mansa (Account No. 915030064383170). Therefore, the ld. CIT(A) has wrongly invoked the provision of section 69A of the Income Tax Act, 1961. 2. The ld. CIT(A) has wrongly invoked the provisions of section 115BBE of the Income Tax Act, 1961. 3. The assessee craves leave to add or alter any ground of appeal during the appellate proceedings.” 3. The appellant assessee is an agriculturist and owned 6.5 acres approx a cultivable agriculture land at village Jasarwal District Mansa. The Ld. AO framed assessment under section 144 of the Income Tax Act assessing total income at Rs.12 Lakhs u/s 69A of the Act, the amount deposited in Axis bank during the period of demonetization. The Ld. AO also invoked provisions of Section 115BBE of the Income Tax Act 1961. 4. The Ld. CIT (A) confirmed the addition by observing as under: “Perusal of the assessment order shows that the very first notice issued u/s 142(1) was issued to the assessee on 09.03.2018 calling for ITR for the A.Y. under consideration as the assessee had not filed any return u/s 139. However, even in response to notice issued u/s 142(1) of the Act issued by AO, the assessee had failed to furnish return of income for the A.Y. 2017-18. Subsequently, AO issued notice u/s 142(1) on 18.09.2019 but no compliance was made by him. Subsequently, the final show cause notice was also issued by the AO to the assessee on 20.11.2019 which also remained uncomplied with. Under these circumstances, the assessee’s contention in the Ground of appeal ITA No. 40/Asr/2022 Harbans Singh v. ITO 3 that during entire assessment proceedings, only one opportunity of hearing was provided vide show cause notice dated 20.11.2019 fixing hearing date 25.11.2019, is an incorrect contention. The assessee has conveniently forgotten to mention that the first two notices u/s 142(1) also remained uncomplied with. Besides, it is interesting to note that the assessee has himself admitted that final show-cause dated 20.11.2019 was not complied by him, however the assessee has just not mentioned what prevented him to make compliance to the said final show cause. Under these facts and circumstances, the assessee’s contention that insufficient opportunity was provided by the AO to him, is not an acceptable contention. Besides, even during the course of these appellate proceedings, in spite of issuing several notices u/s 250, all of which were duly served on the appellant as per email delivery report available in ITBA module, absolutely no compliance has been made to any of the notices. Neither any written submissions have been filed, nor any documentary evidence have been submitted in support of the source of cash deposits. This conduct of the assessee shows that the assessee is habitual non complier. Otherwise, even if he felt that the AO had not provided the sufficient opportunity, at least he could make use of opportunities provided to him during these appellate proceedings, by way of issuing several notices u/s 250. Under the above-stated facts on record, the Ground of appeal no. 2 is dismissed.” “(iii) Even during the course of these appellate proceedings, in spite of issuing several notices u/s 250, all of which were duly served on the appellant as per email delivery report available in ITBA module, absolutely no compliance has been made to any of the notices. Neither any written submissions have been filed, nor any documentary evidence have been submitted in support of the Ground of appeal and against the findings of AO. (iv) Under the facts and circumstances recorded in the assessment order, and further observing that against the findings of AO and in support of the Ground of appeal, during the course of these appellate proceedings, in spite of issuing several notices u/s 250, all of which were duly served on the appellant as per email delivery report available in ITBA module, absolutely no compliance has been made to any of the notices, as neither any written submissions have been filed, nor any documentary evidence have been submitted, and further observing that the entire cash of Rs. 12,00,000/- was deposited on a single date on 12.11.2016, just four days after the scheme of demonetization was announced w.e.f. 09.11.2016 ITA No. 40/Asr/2022 Harbans Singh v. ITO 4 (midnight of 08.11.2016), which strongly rules out any possibility of these receipts being part of any kind of business turnover of the business, if at all, carried on by the assessee, I have no hesitation in confirming the findings of AO, the source of cash deposits of Rs.12,00,000/- has remained unexplained and AO has rightly added these cash deposits to the total income of the assessee as undisclosed income under the provisions of s.69A. The Ground of appeal no. 3 is dismissed.” 5. The Appellant assesse filed a written submission in support of its grounds of appeal with documentary evidences such as bank statement, form J, copies of bills of agriculture produce as an additional evidence. The submission reads as under: “a). That I was having sufficient cash in hand on the date i.e 12/11/2016 of cash deposit of Rs.1200000/- (12 lakhs) in the impugned bank i.e Axis bank, Mansa (Account No. 915030064383170). I have made cash withdrawals of Rs. 640000/- and Rs. 468000/- on 29/12/2015 and 30/12/2015 respectively from the same bank. I was looking for purchase of new agricultural land and for this reason I had withdrawn the amount in cash from the bank. Purchase/ sale of agriculture land in cash is very much prevalent in our area. Also an amount of Rs. 105000/- and 146900/- have been withdrawn on 07/05/2016 from the said bank. I also made cash withdrawals of Rs.256600/- on 05/05/2016 from my bank maintained with SBI, Bhikhi (Account No. 65112418452). I received Rs.256603/- from my commission agents M/s Parveen Kumar Lokesh Kumar through whom agriculture produce has been sold. A cash flow statement for the period 01/04/02016 to 12/11/2016 incorporating cash entries routed through my Axis bank and SBI, Bhikhi (SB a/c no. 65112418452) has been prepared to prove my contention that I was having sufficient cash as on 12/11/2016. Copy of the cash flow statement is enclosed herewith. Rs. 1000000/- has been taken as opening cash in hand as on 01/04/2016 covering the cash withdrawals of Rs.640000/- and Rs.468000/- made on 29/12/2015 and 30/12/2015 respectively. The following bank statements are enclosed as under:- ITA No. 40/Asr/2022 Harbans Singh v. ITO 5 Name of the Bank Account No. Period for which statement is furnished Axis Bank, Samaon Branch 915030064383170 28/12/2015 to 26/05/2017 State Bank of India, Bhikhi 65112418452 27/09/2015 to 29/04/2017 b). I did not have any income except agricultural income during the year under consideration. Copy of the 3 J Forms and copy of land holding proof i.e Jamabandi are enclosed herewith. c). Copy of my another bank statement from Axis bank (Account No. 915010051312390) is enclosed herewith to show that there were negligible cash entries in the said account. Grounds of Appeal No. 2 : Wrong application of section 115BBE of the Income Tax Act, 1961. As the nature and source of the cash deposited by me have reasonably explained, there remains no question of any income to be adjudicated u/s 69A from the Income Tax Act, 1961. Therefore the provisions of section 115BBE cannot be invoked. Request to accept additional evidence: Your Honour is also prayed to accept the evidence enclosed with the written submissions. I could not provide the required evidence to my counsel during the appellate stage since I was going through a very disturbed personal life during that period. My brother -in-law (jija ji) Sh. Pargat Singh got expired on 16-03- 2016 and the responsibility of my sister and her children were borne by me after the death of my brother-in-law. I am an illiterate person and belong to a rural background. I do not know the intricacies of Income Tax Laws. Therefore a lenient view may please be accepted. I am already under huge income tax liability which is already beyond my means. Therefore it is again humbly prayed that the present appeal may please be heard in the interest of justice. Defects pointed in appeal vide letter dated 07-03-2022 : ITA No. 40/Asr/2022 Harbans Singh v. ITO 6 Regarding the deposit of appeal fee paid under wrong head, it is submitted that I have already filed an application submitted on 22-03-2022 at ASK Centre, Bathinda for correction of minor head from Tax on regular assessment (400) to Tax on self assessment (300). Copy of the application is enclosed herewith. Prayer: It is humbly requested to allow the present appeal keeping in view the facts of the case and delete the impugned addition.” 6. The defendant Ld. DR relied upon the orders of the authorities below. He contended that assessee has been provided sufficient opportunity of being heard. He submitted that in spite of issuing several notices u/s 250, all of which were duly served on the appellant as per email delivery report available in ITBA module, absolutely no compliance has been made to any of the notices. Neither any written submissions have been filed, nor any documentary evidence have been submitted in support of the Ground of appeal and against the findings of AO. He argued that the assessee Assessing Officer was found to be justified and the same finding is therefore, rightly upheld by Ld. CIT(A). 7. We have heard the Ld DR at length, gone through the written submission of the assesse and have gone through the material available on record. ITA No. 40/Asr/2022 Harbans Singh v. ITO 7 8. Admittedly both the lower revenue authorities have passed the orders ex-parte qua the assessee without granting adequate opportunity of being as evident from the record. They have mentioned the factum of issue of notice but they have not mentioned the factum of date of issue and service of notice on the assesse except show cause notice by the AO who has passed ex-parte order under section 144 of the Act. The AO or the CIT (A) ought to have brought on record material evidence to treat the cash deposit of Rs. 12 Lakhs during demonetization as unexplained either u/s 69A or u/s 115BBE of the Act by speaking order by taking the appellants rebuttal on record. 9. The appellant contended in the written submissions that he could not provide some vital evidences to its counsel during the appellate stage due to family problems and lack of knowledge of the intricacies of Income Tax Laws. The additional documentary evidence in the form of bank statement, form J, copies of bills of agriculture produce as an additional evidence are material evidence required for the verification of the claim of the assesse. The AO is required to examine the assessee’s claim of having sufficient cash in hand on the date i.e. 12/11/2016 of cash deposit of Rs.12,00,000/- (12 lakhs) in the impugned bank i.e. Axis Bank, Mansa (Account No. ITA No. 40/Asr/2022 Harbans Singh v. ITO 8 915030064383170). Accordingly, the additional evidence is admitted on record and we consider it deem fit to restore back the matter to the file of the AO to pass assessment order de novo after taking into consideration the additional evidence admitted as above and after granting sufficient opportunity of being heard to the assesse. No doubt, the assessee shall cooperate in the fresh proceedings before the Assessing Officer. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 08.02.2023 Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr./P.S.* 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