Sh. Jagdish Singh, Rajpura V. Pr. CIT, Patiala

ITA 420/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5242 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 05-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 22-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Keywords: Unexplained expenditure; Audit objection; Assessment record
• Section: 69C; 143(3); 133(6); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.420/CHD/2016 (ASSESSMENT YEAR : 2011-12) SH.JAGDISH SINGH VS. PR. COMMISSIONER OF INCOME TAX, S/O SH.JIWAN SINGH, PATIALA. # 728, MOHALLA GURU NANAK PURA, RAJPURA. PAN: BIUPS6521D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI RAVI SARANGAL, CIT DR DATE OF HEARING : 05.01.2017 DATE OF PRONOUNCEMENT : 03.04.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED PR. COMMISSIONER OF IN COME TAX , PATIALA DATED 25.2.2016 RELATING TO ASSESSMEN T YEAR 2011-12, PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE WORTHY PR. COMMISSIONER OF INCOME TAX, HAS ERRED IN HOLDING THAT THE ORDER OF THE ASSESSIN G OFFICER IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIA L TO THE INTEREST OF REVENUE AND, THUS, THE ACTION OF WORTHY PR.CIT IN SETTING ASIDE THE ORDER TO THE FILE OF ASSESSING OFFICER FOR PASSING A FRESH ORDER IS VOID AND ERRONEOUS. 2 2. THAT THE WORTHY PR. CIT HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSMENT HAS BEEN FRAMED U/S 143(3) AND THE ASSESSMENT PROCEEDINGS CONTINUED FOR FEW MONTHS AND ON VARIOUS DATES, CERTAIN INFORMATION CALLED FOR BY THE ASSESSING OFFICER IN ORDER TO VERIFY THE CASH DEPOSITS IN THE BANK ACCOUNT. ALL THE RELEVANT INFORMATION AND PROOFS AS CALLED FOR WITH REGARD TO CASH DEPOSITS I N THE BANK ACCOUNT WERE GOT VERIFIED AND SCRUTINIZED WITH BANK STATEMENT AND SOURCE OF CASH EXPLAINED. AS SUCH, ASSESSMENT AS FRAMED WAS AFTER DUE APPLICATION OF MIND BY THE ASSESSING OFFICER AND AS, SUCH, ASSESSMENT CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE REVENUE. 3. THAT THE FACT THAT SOURCE OF CASH DEPOSIT WAS DU LY EXPLAINED AND VERIFIED IS ALSO BORNE OUT FROM THE OFFICE NOTE ITSELF AS GIVEN BY THE AO AND , AS SUCH, NEITHER ASSESSMENT IS ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. 4. `THAT THE WORTHY PR.CIT HAS ERRED IN NOT CONSIDERING THE DETAILED SUBMISSION FILED DURING THE COURSE OF HEARING IN RESPECT OF PROCEEDINGS INITIATED U/S 263(1) PROPERLY. 5. THAT IN VIEW OF THE ABOVE FACTS, IT IS REQUESTED THAT THE PROCEEDINGS INITIATED BY THE WORTHY PR.CIT , PATIALA U/S 263 MAY BE FILED. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX ON PERUSAL O F THE ASSESSMENT RECORD OF THE ASSESSEE FOUND THAT THERE WERE HUGE CASH DEPOSITS AMOUNTING TO RS.96,87,170/- IN T HE SAVING ACCOUNT OF THE ASSESSEE MAINTAINED WITH PUNJ AB NATIONAL BANK, RAJPURA AND CREDITS OF RS.11,88,800/ - AND RS.23,00,000/- DURING THE YEAR BY WAY OF TRANSFER E NTRIES. BESIDES ,THE CIT FOUND THAT THE ASSESSEE HAD ALSO MAINTAINED SAVINGS ACCOUNT WITH STATE BANK OF INDIA , RAJPURA IN WHICH HUGE AMOUNT WAS CREDITED BY WAY OF TRANSFER ENTRY. THE LEARNED PR. COMMISSIONER OF INC OME TAX FOUND THAT THE ASSESSING OFFICER HAD NOT PROPER LY 3 VERIFIED THE SOURCE OF CASH AND TRANSFER CREDIT ENT RIES, NOR WERE THE SAME EXPLAINED DURING THE ASSESSMENT PROCEEDINGS. FURTHER HE FOUND THAT THE ASSESSING O FFICER HAD ONLY GIVEN AN OFFICE NOTE IN THE ASSESSMENT ORD ER THAT THE SOURCE OF CASH DEPOSITS WAS VERIFIED WITH REFER ENCE TO THE STATEMENT OF SAVING BANK ACCOUNT BUT HAD NOT MENTIONED THE BASIS ON WHICH HE WAS SATISFIED. SIN CE NO DOCUMENTARY EVIDENCE WAS THERE ON RECORD FROM WHICH IT COULD BE SO ESTABLISHED, HE ISSUED A SHOW CAUSE NOT ICE U/S 263(1) OF THE ACT TO THE ASSESSEE PROPOSING TO SET ASIDE THE ASSESSMENT ORDER, SINCE IT APPEARED TO HI M THAT IT WAS ERRONEOUS IN AS MUCH AS IT WAS PREJUDICIAL T O THE INTEREST OF THE REVENUE. 4. DURING THE COURSE OF PROCEEDINGS BEFORE THE LEARNED PR. COMMISSIONER OF INCOME TAX, THE ASSESSE E SUBMITTED THAT ADEQUATE ENQUIRIES HAD BEEN CONDUCTE D DURING THE ASSESSMENT PROCEEDINGS AND ALL DOCUMENTS PLACED ON RECORD AND, THEREFORE, THERE WAS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER. THE WRITTEN SUBMIS SIONS FILED BY THE ASSESSEE BEFORE THE LD.PR. COMMISSIONE R OF INCOME TAX ARE REPRODUCED AT PARA 3 OF THE ORDER OF THE PR.COMMISSIONER OF INCOME TAX. THE LEARNEDPR. COMMISSIONER OF INCOME TAX WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HELD THAT THE ASSES SING OFFICER HAD NOT MADE ANY ENQUIRY TO VERIFY THE SOUR CE OF CASH DEPOSITS MADE BY THE ASSESSEE IN HIS SAVING BA NK ACCOUNT AND THUS THE ASSESSMENT ORDER WAS HELD TO B E 4 ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR PASSING A FRESH ORDER IN ACCORDANCE WITH LAW IN RESPECT TO THE ISSUE OF CASH DEPOSITS. THE RELEVANT FINDIN G OF THE LD. PR.COMMISSIONER OF INCOME TAX AT PARAS 4 AND 5 OF HIS ORDER ARE AS FOLLOWS: 4. I HAVE CONSIDERED THE SUBMISSIONS CAREFULLY. A S EVIDENT FROM THE FACTS OF THE CASE, THIS CASE HAS BEEN SELE CTED TO VERIFY THE SOURCE OF CASH DEPOSITS AMOUNTING TO RS.96,87,1707- IN THE ASSESSEE'S SAVING BANK ACCOUN T MAINTAINED WITH PUNJAB NATIONAL BANK, RAJPURA. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASK ED TO EXPLAIN THE SOURCE OF THESE CASH DEPOSITS WITH THE B ANK. IN RESPONSE, THE ASSESSEE SUBMITTED A COPY OF CASH BOOK AND BANK STATEMENTS BEFORE THE AO BUT DID NOT FILE EXPLA NATION REGARDING SOURCE OF CASH DEPOSITS. THE AO ACCEPTED ASSESSEE'S SUBMISSION WITHOUT MAKING ANY ENQUIRY REGARDING SOURCE OF CASH DEPOSITS IN THE BANK FOR WHICH THE CASE WAS SE LECTED UNDER CASS. THE AO GIVEN AN OFFICE NOTE IN THE ASSES SMENT ORDER THAT THE SOURCES OF CASH DEPOSITS WERE VERIFI ED WITH REFERENCE TO THE STATEMENT OF SAVING BANK ACCOUNT. H OWEVER, THE AO HAS NOT MENTIONED THE BASIS ON WHICH HE WAS SATIS FIED THAT THE ASSESSEE HAVE EXPLAINED THE SOURCES OF CAS H DEPOSITED, AS NO DOCUMENTARY EVIDENCE HAS BEEN PLACED ON RECORD FROM WHERE IT CAN BE ESTABLISHED THAT THE AS SESSEE HAVE EXPLAINED THE SOURCES OF CASH DEPOSITED, THERE FORE, THE ASSESSEE'S COUNSEL SUBMISSIONS DURING THE CURRENT PROCEEDINGS THAT ALL RELEVANT INFORMATION AND PROOFS WITH REGARD TO THE SAID DEPOSITS OF CASH IN THE BANK ACC OUNT, AS DESIRED BY THE ASSESSING OFFICER WAS SCRUTINIZED IN DETAIL AND THE ASSESSING OFFICER AFTER EXAMINING ALL THE D ETAILS, HAVE FRAMED THE ASSESSMENT IS NOT TENABLE ON THE FACE OF AFORESAID FACTS. 5 FURTHER, A PERUSAL OF THE INCOME TAX RETURN FILED B Y THE ASSESSEE REVEALS THAT THE ASSESSEE HAS SHOWN GROSS TOTAL INCOME AT RS. 1,21,474/- UNDER THE HEAD INCOME FRO M OTHER SOURCES AND THAT SO EARNED FROM THE BANK INT EREST ON FDRS ONLY. HOWEVER, BANK STATEMENT SHOWS THAT THE ASSESSEE MADE HUGE CASH TRANSACTIONS THROUGHOUT THE YEAR IN HIS SAVING BANK ACCOUNT AND THE AO HAS NOT PUTFORTH ANY ENQUIRY WITH REGARD TO THESE HUGE CASH TRANSACTIONS A ND MEAGER INCOME SHOWN BY THE ASSESSEE. FURTHER, THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, SUBMITTED THAT HE WAS REMAIN PRESENT ONLY FOR 37 D AYS DURING THE YEAR IN INDIA BUT THE BANK STATEMENT SHOW S THAT THE CASH WAS DEPOSITED THROUGHOUT THE YEAR. THE AO D ID NOT MAKE ANY QUERY IN THIS REGARD FROM THE ASSESSEE. FURTHER, THE ASSESSEE'S SUBMISSIONS SUBMITTED DURIN G THE CURRENT PROCEEDINGS FAILS TO ANSWER THE DISCREP ANCIES POINTED, OUT IN THE AFORESAID NOTICE, AS THE ASSESS EE FAILS TO ADDUCE ANY EVIDENCE WHICH PROVES THAT EITHER THE AO ASKED TO EXPLAIN THE SOURCES OF THESE CASH DEPOSITS OR THE ASS ESSEE HIMSELF EXPLAINED THE SAME DURING THE COURSE OF ASSES SMENT PROCEEDINGS. FROM THE ABOVE, IT IS CLEAR THAT THE AO DID NOT MAK E ANY ENQUIRY/EFFORT WITH REGARD TO VERIFY THE SOURCES OF CASH' DEPOSITS MADE BY THE ASSESSEE IN HIS SAVING BANK ACC OUNT MAINTAINED WITH THE PUNJAB NATIONAL BANK, RAJPURA, T HIS CASE HAS BEEN SELECTED TO VERIFY THE HUGE CASH DEPOSITS I N ASSESSEE'S SAVING BANK ACCOUNT AND IF THE AO IS SAT ISFIED WITH THE EXPLANATION OF THE ASSESSEE MADE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THEN THE AO HAS TO PLACE SOME MATERIAL ON RECORD WHICH ESTABLISHED THE SAME, HOWEVER, THE AO FAILED TO DO SO AS HE NEITHER MARKED ANY INQUIRY NOR ASKED THE ASSESSEE TO EXPLAI N, THE SOURCES OF THESE CASH DEPOSES. THE ASSESSMENT RECORD DOES NOT SHOW ANY INITIATIVE OF THE AO IN THIS REGARD. THUS , THE 6 ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AS W ELL PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THE SAM E HAS BEEN PASSED WITHOUT MAKING ANY ENQUIRIES RELEVANT T O THE CASE. FURTHER, I DO NOT THINK THAT THIS IS A CASE W HERE THE AO HAS TAKEN A POSSIBLE VIEW IN THE MATTER ON THE DOCUM ENTS PRODUCED BY THE ASSESSEE IN SUPPORT OF CASH DEPOSITS IN HIS SAVING BANK ACCOUNT. RATHER IT IS A CASE WHERE THE A O HAS ACCEPTED THE EXPLANATION OFFERED BY THE ASSESSEE ON THE FACE OF IT WITHOUT MAKING NECESSARY INQUIRIES TO VERIFY THE S OURCES OF CASH DEPOSITS FOR WHICH THE CASE WAS SELECTED UN DER CASS. UNDER THESE CIRCUMSTANCES THE ORDER OF THE AO WAS ERRONEOUS, AS HELD BY THE HON'BLE SUPREME COURT IN T HE CASE MALABAR INDUSTRIAL COMPANY LTD. VS. CIT REPORTED AT 2 43 ITR 83 (SC), FURTHER IN THE CASE OF GEE VEE ENTERPRISE S VS. ADDL. CIT & ORS 99 ITR 375 (DEL), THE HON'BLE DELHI HIGH COURT HAVE HELD IN THAT NOT MAKING AN INQUIRY WARRANT ED ON THE FACTS OF A CASE WILL MAKE THE ASSESSMENT ORDER ERRONEOUS. SIMILAR VIEW HAS. BEEN TAKEN BY THE HON' BLE MADRAS HIGH COURT IN THE CASE OF K.A. RAMSWAMY CHET TIAR & ANR VS. CIT 220 T'TR 657 (MAD,), MOREOVER, THE FACTS OF THE CASE ARE SQUARELY COVERED BY EXPLANATION 2 OF SEC.26 3, WHICH IS INSERTED W.E.F. 01.06.2015, IT READS AS UNDER:- 'FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECL ARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL HE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTER ESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIO NER OR COMMISSIONER, - A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; 7 C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119;OR D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED, BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF ASSES SEE OR ANY OTHER PERSON. ' IN THE FACTS OF THE CASE I HOLD THAT THE ORDER OF THE AO IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE IN TEREST OF THE REVENUE SINCE THE AO HAS NOT MADE THE ADDITION IN RESPECT OF UN EXPLAINED CASH DEPOSITS. 5. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING THE ABOVE GROUNDS OF AP PEAL. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTEND ED THAT THE PRESENT REVISIONARY PROCEEDINGS WERE BAD IN LA W SINCE THE ASSESSMENT WAS FINALIZED U/S 143(3) OF THE ACT BY THE ASSESSING OFFICER AFTER MAKING THOROUGH INVESTIGATI ON ON THE ISSUE OF CASH DEPOSITS IN THE BANK ACCOUNT OF T HE ASSESSEE. IN SUPPORT OF HIS ABOVE CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE FOLLOW ING DOCUMENTS PLACED BEFORE US IN THE FORM OF A PAPER B OOK: SL NO. PARTICULARS PAGE 1 COPY OF QUESTIONNAIRE DATED10.01.2013 AS ISSUED BY THE ASSESSING OFFICER. 1 2 COPY OF STATEMENT OF PUNJAB NATIONAL BANK AS FILE D WITH THE ASSESSING OFFICER DURING THE 143(3) PROCEEDINGS. 2-5 3 COPY OF STATEMENT OF STATE BANK OF INDIA AS FILED WITH THE ASSESSING OFFICER DURING THE 143(3) PROCEEDINGS. 6-9 4 COPY OF LETTER AS PER PROVISIONS OF SECTION 1 33( 6) OF THE ACT DATED 27.09.201 3 BY THE ASSESSING OFFICER TO THE BRANCH MANAGER, PUN JAB NATIONAL BANK. 10 5 COPY OF EVIDENCES OF REMITTANCE OF MONEY FROM USA IN THE CASE OF THE ASSESSEE. 11-13 6 COPY OF LETTER AS FILED BY THE ASSESSEE WITH THE AO DURING THE 143(3) PROCEEDINGS ALONGWITH THE COPY OF INCOME TAX RETUR NS FILED AT USA. 14-17 8 7 COPY OF LETTER AS PER PROVISIONS OF SECTION 133(6 ) OF THE ACT DATED 15.10.2013 BY THE ASSESSING OFFICER TO THE BRANCH MANAGER, ST ATE BANK OF INDIA. 18 8 COPY OF LETTERS DARTED 17.10,2013 AND 29,11.2013 AS SENT BY THE MANAGER, SBI TO THE ASSESSING OFFICER IN RESPONSE TO THE LET TER U/SEC 133(6) OF THE ACT. 19-42 9 COPY OF PERSONAL CASH BOOK AS FILED BY THE ASSESS EE WITH THE ASSESSING OFFICER DURING THE ORIGINAL 143(3) PROCEEDINGS. 43-55 10 COPY OF CASH FLOW STATEMENT IN THE CASE OF THE A SSESSEE AS FILED WITH THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PR OCEEDINGS. 56 6. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ABOVE DOCUMENTS AMPLY DEMONSTRATE THAT DURING T HE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED ABOUT THE BANK ACCOUNTS MAINTAINED BY HIM VIDE QUESTIONNAIRE DATED 10.01.2013, IN REPLY TO WHICH COPY OF BANK STATEMENT WAS FILED TO THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT INFOR MATION WAS CALLED FOR FROM THE CONCERNED BANK MANAGERS ALS O U/S 133(6) OF THE ACT WHICH WAS DULY SUPPLIED TO THE AS SESSING OFFICER BY THE BANK. THE LD COUNSEL FOR THE ASSESSE E ALSO DREW OUR ATTENTION TO THE COPY OF CASH BOOK AND THE CASH FLOW STATEMENT FILED DURING ASSESSMENT PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AFTER CONSIDERING ALL THE ABOVE, THE ASSESSING OFFICER WA S SATISFIED ABOUT THE SOURCE OF CASH DEPOSITED AND HA D THEREFORE FORMED AN OPINION THAT NO ADDITION WAS WARRANTED IN THE PRESENT CASE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHAT MORE ENQUIRY WAS REQUI RED AND FURTHER THAT THE SATISFACTION IN THE PRESENT CA SE WAS EVIDENT FROM THE DOCUMENTS SUBMITTED BY THE ASSESSE E AND THERE WAS NO NEED FOR THE AO TO PUT THE SATISFA CTION IN WRITING IN THE ASSESSMENT ORDER TO PROVE THAT EN QUIRY WAS CONDUCTED. THEREFORE, THE LD. COUNSEL FOR THE 9 ASSESSEE ARGUED THAT MERELY BECAUSE THE ASSESSING O FFICER HAD NOT MENTIONED THE COURSE OF INQUIRY CONDUCTED, REGARDING THE CASH DEPOSITS, IN THE ASSESSMENT ORDE R ,DID NOT SHOW THAT NO ENQUIRY WAS CONDUCTED AND THE FACT THAT IT WAS MENTIONED BY WAY OF OFFICE NOTE AS ALSO THE DOCUMENTS NOW PRODUCED BEFORE US AS ABOVE, CLEARLY PROVE THAT ADEQUATE ENQUIRY WAS CONDUCTED AND THE ASSESSI NG OFFICER ON THE BASIS OF THE ENQUIRY WAS SATISFIED T HAT THE CASH WAS DULY EXPLAINED BY THE ASSESSEE. LD COUNSEL PLACED RELIANCE ON THE FOLLOWING CASE LAWS IN SUPPO RT OF HIS CONTENTIONS: 1.CIT VS SOHANA WOOLLEN MILLS 296 ITR 238 (P&H) 2.NARAIN SINGLA VS PR.CIT ITA NO.427/CHD/2015 DT 31-08-2015. 3.UNIVERSAL WOOLLEN MILLS VS CIT ITA NO.616/CHD/2013 DT 08-03-2016 7. THE LD. DR, ON THE OTHER HAND, COUNTERED BY STATING THAT NO EXPLANATION OF THE SOURCE OF THE CA SH DEPOSITS WAS GIVEN DURING THE ASSESSMENT PROCEEDING S AND NONE OF THE DOCUMENTS WHICH HAVE BEEN POINTED OUT B Y THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THE SOURCE O F CASH DEPOSITS. THEREFORE, THE ENQUIRY CONDUCTED BY THE ASSESSING OFFICER WAS INCOMPLETE AND INADEQUATE AND HENCE THE LD.PR. COMMISSIONER OF INCOME TAX HAD RIG HTLY EXERCISED HIS REVISIONERY POWERS U/S 263 OF THE ACT HOLDING THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 10 8. THE LD. COUNSEL FOR THE ASSESSEE ALSO ARGUED THAT THE REVISIONERY PROCEEDINGS WERE INITIATED ON THE BASIS OF AUDIT OBJECTION AND DREW OUR ATTENTION TO THE AUDIT OBJECTION DATED 30.1.2015 IN THIS REGARD PLAC ED AT PAPER BOOK PAGE NOS.66 TO 68 CATEGORICALLY MENTIONI NG THE ABOVE DISCREPANCY OF INADEQUATE ENQUIRY OF SOUCE OF DEPOSITS IN THE CASE OF THE ASSESSEE. THE LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT THEREAFTER THE LD.PR. COMMISSIONER OF INCOME TAX ISSUED NOTICE U/S 263 OF THE ACT ON 4.12.2015. THUS REVISIONERY PROCEEDINGS WER E INITIATED ON THE BASIS OF AUDIT OBJECTION WHICH WAS NOT PERMISSIBLE UNDER LAW. THE LD. COUNSEL FOR THE ASS ESSEE RELIED UPON THE FOLLOWING CASE LAWS IN SUPPORT OF H IS ABOVE CONTENTION: 1.SHRI KIRTI ANAND VS CIT ITA NO.540/CHD/2013 DT 14-10-2015. 2.JASWINDER SINGH VS COMMISSIONER OF INCOME TAX ITA NO.690/CHD/2010 DT 09-03-2012 3. CIT VS SOHANA WOOLLEN MILLS 296 ITR 238 (P&H) 8. THE LD. DR, ON THE OTHER HAND, COUNTERED BY SUBMITTING THAT THERE WAS NO BAR ON INITIATING REVI SONERY PROCEEDINGS U/S 263 OF THE ACT ON THE BASIS OF AUDI T OBJECTION POINTING OUT A FACTUAL ERROR AND RELIED U PON THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS PVS BEEDIES (1999) 237 ITR 13(SC) IN THIS REGARD. 11 9. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. 10. THE MAIN CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE FOR HOLDING REVISIONARY PROCEEDINGS AS BAD ARE THAT THE ASSESSING OFFICER HAD ENQUIRED INTO THE IS SUE OF CASH DEPOSITS DURING ASSESSMENT PROCEEDINGS, APPLIE D HIS MIND AND FORMED AN OPINION THAT NO ADDITION WAS WARRANTED, THEREFORE, IT COULD NOT BE SAID THAT TH ERE WERE ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER. 11. WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. UNDISPUTEDLY THE PRESENT CASE WAS TAKEN IN SCRUTINY TO EXAMINE THE SOURCE OF CASH DEPOSITS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE AS PER AIR.THE ASSESSMENT ORDER MENTIONS THE SAID FACT IN THE OFFICE NOTE AND THE SAME HAS NOT BEEN DISPUTED BY THE LD.COUNSEL FOR THE ASSESSEE. CONSIDERING THE SAID F ACT WE SHALL NOW TAKE NOTE OF THE INQUIRY CONDUCTED BY THE AO. THE ENQUIRY CONDUCTED IN THE PRESENT CASE AS ADMITT ED BY BOTH THE PARTIES IS; I) QUESTIONNAIRE DATED 10.2.2013 ISSUED BY THE ASSESSING OFFICER; II) COPIES OF BANK STATEMENTS FILED IN RESPONSE TO THE QUESTIONNAIRE III) COPIES OF BANK STATEMENTS PROCURED BY THE ASSESSING OFFICER FROM THE BANKS BY EXERCISING ITS POWER U/S 133(6) OF THE ACT. 12 12. IN THE QUESTIONNAIRE REFERRED TO ABOVE, THE QUESTION ASKED TO THE ASSESSEE RELATING TO BANK ACC OUNTS IS AS FOLLOWS: (V) GIVE NAME AND COMPLETE ADDRESS OF THE BANK IN WHICH YOU ARE HAVING ACCOUNT. 13. NO OTHER QUESTION RELEVANT TO BANK ACCOUNTS OF THE ASSESSEE WAS ASKED IN THE ABOVE QUESTIONNAIRE. THIS QUESTIONNAIRE ,WE FIND, IS A VERY BASIC QUESTIONNAI RE RAISED IN THE ASSESSMENT PROCEEDINGS AND WHICH CLEA RLY DOES NOT ASK THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH, IF ANY, DEPOSITED IN THE BANK ACCOUNT. COPIES OF BANK STATEMENTS AND INFORMATION PROCURED FROM THE BANK W HICH AGAIN IS THE BANK STATEMENT OF THE ASSESSEE ONLY, G IVE MERE DETAILS OF TRANSACTIONS WHICH TOOK PLACE IN TH E BANK ACCOUNTS. AGAIN THERE IS NO EXPLANATION IN THESE DOCUMENTS OF THE SOURCE OF CASH DEPOSITED IN THE BA NKS. 14. THE LD. COUNSEL FOR THE ASSESSEE ALSO DREW OU R ATTENTION TO THE LETTER FILED TO THE ASSESSING OFFI CER FURNISHING HIS COPY OF INCOME TAX RETURN FILED IN T HE USA AND ALSO THE CASH BOOK OF THE ASSESSEE AND THE CAS H FLOW STATEMENT SUBMITTED DURING ASSESSMENT PROCEEDINGS. NO LETTER EXPLAINING THE SOURCE OF CASH IN THE BANKS, WE FIND, HAS BEEN FILED TO THE ASSESSING OFFICER AND ALL THA T THE ASSESSING OFFICER HAD BEFORE HIM WAS COPIES OF BANK STATEMENT AND THE CASH BOOK AND CASH FLOW STATEMEN T OF THE ASSESSEE. 13 15. THESE DOCUMENTS SHOW THAT THE ASSESSEE HAD AN OPENING BALANCE OF CASH IN HAND OF RS.6,59,000/- AN D THERE WERE TOTAL WITHDRAWALS OF RS.1,20,41,500/- AN D DEPOSITS OF RS.1,21,87,170/- AT VARIOUS POINTS OF T IME RESULTING IN CLOSING BALANCE OF CASH IN HAND OF RS.5,13,330/-.IT IS ONLY THE MOVEMENT OF THE CASH I N THE BANK AND IN THE HANDS OF THE ASSESSEE WHICH WE FIND IS SHOWN IN THE CASH BOOK. NO OTHER TRANSACTION IS REF LECTED IN THE CASH BOOK OR THE CASH FLOW STATEMENT. NO FUR THER INQUIRY WAS MADE BY THE AO, AS IS EVIDENT FROM THE ORDER SHEET ALSO WHICH WAS PLACED BEFORE US AT P.B 61-65, WHEN THE INFORMATION BEFORE THE AO SHOULD HAVE RAISED DO UBTS IN HIS MIND REGARDING THE VERACITY OF THE SAME SINC E THEY REFLECT ONLY HUGE CASH DEPOSITS AND WITHDRAWALS FRO M THE BANK AND NOTHING ELSE, WHICH IS VERY UNUSUAL FOR AN INDIVIDUAL WHOSE ONLY SOURCE OF INCOME IS INTEREST FROM FDRS THAT TOO AMOUNTING TO RS.1,21,474/- AS DISCLO SED IN HIS RETURN OF INCOME FILED . IT SHOULD HAVE PROMPT ED THE ASSESSING OFFICER TO QUESTION THE GENUINENESS OF TH E CASH BOOK, TO ASK THE ASSESSEE AS TO WHY IT WAS INDULGIN G IN THE SAID TRANSACTIONS THROUGHOUT THE YEAR, ENQUIRE WHETHER THERE WAS ANY ASSET OR OTHER INVESTMENT MAD E BY THE ASSESSEE WHICH COULD BE LINKED TO THE WITHDRAWA LS, ENQUIRY REGARDING THE SOURCE OF MEETING HIS HOUSEHO LD EXPENSES, BUT NO SUCH ENQUIRY WAS MADE BY THE ASSE SSING OFFICER. THE ASSESSING OFFICER, WE FIND, HAS SIMPLY ACCEPTED WHATEVER DOCUMENTS WERE SUBMITTED BY THE ASSESSEE AS SUCH, WITHOUT EVEN APPLYING HIS MIND TO THEM. 14 THE BANK STATEMENTS FILED BY THE ASSESSEE OR EVEN PROVIDED FROM THE BANK, CANNOT BE SAID TO BE OF ANY USE FOR EXPLAINING THE SOURCE OF CASH DEPOSITS, SINCE THE ONLY RELEVANCE OF THE INFORMATION WAS WHAT THE AO ALREAD Y HAD IN HIS POSSESSION VIDE THE AIR. THE CASH BOOK GIVE N BY THE ASSESSEE WAS ALSO ACCEPTED ON THE FACE OF IT TH OUGH IN OUR OPINION, THE AO SHOULD HAVE MADE MORE INQUIRIES . MOREOVER, WE FIND THAT THE ASSESSEE HAS ONLY SUBMIT TED THE DOCUMENTS TO THE ASSESSING OFFICER AND LEFT INF ERENCES TO BE MADE THEREFROM TO THE ASSESSING OFFICER. NO EXPLANATION, WHATSOEVER, HAS BEEN GIVEN IN WRITING TO THE ASSESSING OFFICER. WE FAIL TO UNDERSTAND HOW ON TH E BASIS OF BANK STATEMENT AND CASH BOOK THE ASSESSING OFFIC ER COULD BE SATISFIED THAT THE DEPOSITS STOOD EXPLAINE D WHEN TO ANY REASONABLE MIND THE ABOVE QUESTIONS WOULD HA VE ARISEN, CONSIDERING THE THRUST OF THE ASSESSMENT AN D QUANTUM AND NUMBER OF TRANSACTIONS OF CASH DEPOSITS IN THE BANK AND THE RETURN FILED BY THE ASSESSEE SHOWI NG MEAGER INCOME. IT IS THUS CLEARLY A CASE OF NO ENQU IRY HAVING BEEN CONDUCTED VIS A VIS THE CASH DEPOSITED IN BANKS. 16. IN THE AFORESAID CIRCUMSTANCES, WE HOLD ,THAT THE LD.PR. CIT WAS PERFECTLY JUSTIFIED IN RESORTING TO REVISIONAL PROCEEDINGS U/S 263 OF THE ACT. 17. THE APEX COURT IN THE CASE OF CIT VS AMITABH BACHCHAN 384 ITR 200 (SC) HAS HELD THAT WHERE THE F ACT SITUATION CLEARLY DEMANDED FURTHER INQUIRY IN THE I NTEREST 15 OF REVENUE, THE ABSENCE OF SAME JUSTIFIES REVISIONA RY PROCEEDINGS U/S 263 OF THE ACT.IN THE SAID CASE TH E ASSESSEE HAD MADE A CLAIM OF ADDITIONAL EXPENSES OF 30% OF THE GROSS PROFESSIONAL RECEIPTS.ON BEING ASKED TO FILE DETAILS OF THE SAME THE ASSESSEE STATED THAT THEY W ERE INCURRED IN CASH AND A LOT OF THEM ARE OUTSTANDING AND SINCE THEY WERE INCURRED FOR THE PERSONAL SAFETY OF THE ASSESSEE THE NAMES OF THE AGENCIES COULD NOT BE DIV ULGED CONSIDERING THE POSSIBILITY OF LEAKAGE OF INFORMATI ON WHICH COULD PROVE TO BE DETRIMENTAL TO THE INTEREST OF TH E ASSESSEE. THEREAFTER THE ASSESSEE WITHDREW ITS CLAI M STATING THAT IT WOULD NOT BE FEASIBLE TO SUBSTANTIA TE THE SAME .THE AO ISSUED A NOTICE PROPOSING TO TREAT THE SAME AS UNEXPLAINED EXPENDITURE U/S 69C BUT AFTER CONSID ERING THE ASSESSEES REPLY DID NOT PURSUE THE MATTER. THE CIT TOOK THE VIEW THAT NOTWITHSTANDING THE WITHDRAWAL O F CLAIM BY THE ASSESSEE, IN VIEW OF THE EARLIER STAND TAKEN THAT THE SAID EXPENSES WERE INCURRED FOR SECURITY P URPOSE AND SINCE ADMITTEDLY THE ASSESSEE WAS FOLLOWING THE CASH SYSTEM OF ACCOUNTING, THE AO SHOULD HAVE EXAMINED T HE MATTER FURTHER TO ARRIVE AT A DEFINITE FINDING WHET HER THE ASSESSEE INCURRED EXPENSES OR NOT AND IN CASE ACTUA LLY INCURRED WHAT WAS THE SOURCE. THE CIT HELD THAT HIS FAILURE TO DO SO HAD RESULTED INTO AN ERRONEOUS ORD ER ,PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HO NBLE SUPREME COURT HELD THAT THE CIT WAS PERFECTLY JUSTI FIED IN COMING TO HIS CONCLUSION. THE RELEVANT FINDINGS OF THE APEX COURT AT PARA 21 OF THE ORDER ARE AS FOLLOWS: 16 21.THERE CAN BE NO DOUBT THAT SO LONG AS THE VIEW TAKEN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW THE SAME OUGHT NOT TO BE INTERFERED WITH BY THE COMMISSIONER UNDER SECTION 2 63 OF THE ACT MERELY ON THE GROUND THAT THERE IS ANOTHER POSSIBLE VIEW OF THE MATTER. PERMITTING EXERCISE OF REVISIONAL POWER IN A SITUATION WHERE TWO VIEWS ARE POSSIBLE WOULD REALLY AMOUNT TO CONFE RRING SOME KIND OF AN APPELLATE POWER IN THE REVISIONAL AUTHORITY. THI S IS A COURSE OF ACTION THAT MUST BE DESISTED FROM. HOWEVER, THE ABO VE IS NOT THE SITUATION IN THE PRESENT CASE IN VIEW OF THE REASON S STATED BY THE LEARNED C.I.T. ON THE BASIS OF WHICH THE SAID AUTHO RITY FELT THAT THE MATTER NEEDED FURTHER INVESTIGATION, A VIEW WITH WH ICH WE WHOLLY AGREE. MAKING A CLAIM WHICH WOULD PRIMA FACIE DISCLO SE THAT THE EXPENSES IN RESPECT OF WHICH DEDUCTION HAS BEEN CLA IMED HAS BEEN INCURRED AND THEREAFTER ABANDONING/WITHDRAWING THE SAME GIVES RISE TO THE NECESSITY OF FURTHER ENQUIRY IN THE INTEREST OF THE REVENUE. THE NOTICE ISSUED UNDER SECTION 69-C OF THE ACT COULD N OT HAVE BEEN SIMPLY DROPPED ON THE GROUND THAT THE CLAIM HAS BEE N WITHDRAWN. WE, THEREFORE, ARE OF THE OPINION THAT THE LEARNED C.I. T. WAS PERFECTLY JUSTIFIED IN COMING TO HIS CONCLUSIONS INSOFAR AS T HE ISSUE NO.(III) IS CONCERNED AND IN PASSING THE IMPUGNED ORDER ON THAT BASIS. THE LEARNED TRIBUNAL AS WELL AS THE HIGH COURT, THEREFO RE, OUGHT NOT TO HAVE INTERFERED WITH THE SAID CONCLUSION 18. FURTHER, THE LD.COUNSEL HAS ALSO RAISED AN ARGUMENT THAT THE REVISIONARY PROCEEDINGS WERE INIT IATED ON THE BASIS OF AUDIT OBJECTION AND THERE WAS NO INDEPENDENT APPLICATION OF MIND BY THE LD. PR.CIT. LD.COUNSEL RELIED UPON THE DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF SOHANA WOOLLEN MILLS (SUP RA) IN THIS REGARD. LD DR ON THE OTHER HAND VEHEMENTLY CONTESTED THE ARGUMENT AND RELIED UPON THE APEX COU RT DECISION IN THE CASE OF PVS BEEDIES (SUPRA) TO CONT END THAT FACTUAL ERRORS POINTED OUT BY AUDIT TEAM CAN B E THE BASIS FOR RESORTING TO REVISION OF AN ORDER. 19. WE FIND NO MERIT IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE. NO DOUBT THE AUDIT OBJECT ION NOTE DID POINT OUT THE LAPSE ON THE PART OF THE AO IN NOT CONDUCTING ADEQUATE INQUIRY RELATING TO CASH DEPOSI TS IN THE BANK OF THE ASSESSEE,BUT THEN THIS WAS A FACTUA L INFORMATION WHICH IN TURN WAS LOOKED INTO BY THE 17 LD.PR.CIT AND THEREAFTER SHOW CAUSE NOTICE WAS ISSU ED TO THE ASSESSEE. A BARE READING OF THE NOTICE CLEARLY SHOWS THE APPLICATION OF MIND BY THE LD.PR.CIT WHO HAS REITERATED THE FACTS STATED IN THE AUDIT OBJECTION REGARDING NON VERIFICATION OF SOURCE OF CASH AND THEREAFTER RELYING UPON VARIOUS DECISIONS FOUND THE ORDER OF THE AO TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. EVEN THE JURISDICTIONAL HIGH COURT IN THE CASE OF S OHANA WOOLLEN MILLS ,RELIED UPON BY THE LD.COUNSEL FOR TH E ASSESSEE, HAS HELD THAT NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EX ERCISED AND ONLY FACT SITUATIONS WOULD DETERMINE WHETHER SATISFACTION OF THE CIT FOR EXERCISING JURISDICTION WAS CALLED FOR OR NOT. 20. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER PASSE D BY THE LD.PR.CIT U/S 263 OF THE ACT AND DISMISS THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 3 RD APRIL, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH 18