General Secretary Sant Baba Isher Singh Sant Mandal Foundation Gurudwara Anitha Sahib Sant Baba Isher Singh, Mohali V. ITO Ward 6(1), Chandigarh

ITA 505/CHANDI/2022

AI Insights

The case involves an appeal by the Sant Baba Isher Singh, Sant Mandal Foundation against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs. 15,67,500 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was initially made by the AO following the assessee's failure to explain the source of cash deposits made during the demonetization period. The Tribunal admitted additional evidence and affidavit from the assessee, which necessitated a re-examination of the case by the AO.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133746 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 16-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 05-06-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 144; 142(1); 69A

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण,च瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठच瀃डीगढ़ 瀈यायपीठ च瀃डीगढ़ 瀈यायपीठ , च瀃डीगढ़ च瀃डीगढ़च瀃डीगढ़ च瀃डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘SMC CHANDIGARH BEFORE: SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर आयकरआयकर आयकर अपील अपीलअपील अपील सं संसं सं./ ITA No. 505/CHD/2022 Assessment Year : 2017-18 General Secretary, Sant Baba Isher Singh, Sant Mandal Foundation, Gurudwara Angitha Sahib, Sector 62, Mohali. बनाम VS The ITO, Ward 6(1), Chandigarh. 瀡थायी लेखा सं./PAN /TAN No: AABTG1407A अपीलाथ牸/Appellant 灹瀄यथ牸/Respondent िनधा榁琇रती क琉 ओर से/Assessee by : Smt. Komal Thakur, Advocate राज瀡व क琉 ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR तारीख/Date of Hearing : 17.01.2023 उदघोषणा क琉 तारीख/Date of Pronouncement : 18.01.2023 आदेश आदेशआदेश आदेश/ORDER This is an appeal filed by the assessee against the order of ld. CIT(A), NFAC Delhi dated 08.04.2022 pertaining to assessment year 2017-18 wherein the assessee has taken the following grounds of appeal: 1 . The Ld. Commissioner of Income Tax (Appeals) has wrongly confirmed the addition of Rs. 15,67,500/- out of donation offered by the visitors to the Gurudwara in Gullak on the assessment framed u/s 144 of the Income Tax Act,1961 under the period mentioned in the appeal. 2 . The Ld. Commissioner of Income Tax (Appeals) has wrongly denied the facts of the case of a religion/charity institutions connected through prominent Gurudwara where more than lakhs visitors take daily food and shelter in the Gurudwara. 2. Briefly the facts of the case are that as per information available with the Assessing officer, the assessee had deposited ITA 505 /CHD/2022 A.Y. 2017-18 Page 2 of 8 cash amounting to Rs.15,67,500/- in its bank account during the demonetization period i.e. 09.11.2016 to 30.12.2016 in old currency. As the assessee had not filed any return of income for the impugned assessment year, the notices u/s 142(1) was issued requiring the assessee to file its return of income. However, in spite of repeat notices, the assessee didn’t comply with the said notices and no return of income was filed by the assessee. In the absence of any compliance made by the assessee, the AO proceeded ahead and invoked the provisions of section 144 and passed the best judgment assessment order u/s 144 dated 26.12.2019. 3. As per the AO, the assessee has made cash deposits of Rs.15,67,500/- during the demonetization period. Further, there were other credits in his bank account all adding up to Rs.20,04,845/- and since the assessee failed to offer any satisfactory explanation about the nature and source of the deposits, the whole of the deposits in the bank account were deemed as unexplained money u/s 69A of the Act and brought to tax u/s 115BBE in the hands of the assessee. 4. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and the submissions dated 03.01.2021 were filed which were considered by the ld. CIT(A), NFAC Delhi and part relief to the extent of Rs. 4,73,345/- was allowed to the ITA 505 /CHD/2022 A.Y. 2017-18 Page 3 of 8 assessee and the balance addition of Rs.15,67,500/- towards cash deposits was confirmed. Against the said findings and the order of the ld. CIT(A), the assessee is in appeal before us. 5. During the course of hearing, ld. AR submitted that appellant is a religion/charitable institution connected through prominent Gurudwara located in Phase- 8 nearby prominent hospital i.e Fortis hospital, Mohali. Number of needy people coming for food, water and other kinds of helps and accommodation, which appellant whole heartedly extend on regular basis. The Ld. Assessing Officer has wrongly added and the Ld. Commissioner of Income Tax wrongly confirmed the addition of a sum of Rs. 15,67,500/- in the income of the appellant as the entire amount was donated in old currency by the devotees. Source of cash deposited was donation of money by devotees on occasion of Gurupurab on 13.11.2016. It was submitted that Gurupurab is one of the most important and sacred festival in Sikh community and for management of Gurupurab (Guru Nanak Jayanti on 13.11.2016), the appellant spent on decorations, Nagar Kirtan and many more things. Since the demonetization took place on 08.11.2016, the donation continued to pour in the cash box in old currency till 13.11.2016, appellant could not stop the devotees to pour in the cash box in old currency but the payments were not being accepted by the vendors in old ITA 505 /CHD/2022 A.Y. 2017-18 Page 4 of 8 currency due to demonetization hence appellant deposited the entire amount in three bank accounts and thereafter the payments were made to relevant vendors either through cheques or cash as shown in our bank passbook. 6. It was further submitted that the ld. CIT(A) was wrong in holding that the assessee did not furnish any additional evidence during the appellate proceedings. In this regard, our reference was drawn to the application filed for admitting additional evidence under Rule 46A which was filed by the assessee before the ld. CIT(A) NFAC, Delhi on 08.03.2022 wherein the assessee also submitted an affidavit issued by the Secretary of the assessee Gurudwara confirming the receipt of the donations in cash from the devotees. It was, accordingly, submitted that the additional evidence by way of affidavit of the Secretary needs to be considered and necessary relief be provided to the assessee. It was further submitted that similar deposits were made in the earlier years as well and it is not the first year where the assessee has received donations in cash. It was accordingly submitted that source of cash deposit was donation of money by devotees on occasion of Gurupurab upto 13.11.2016 and the addition so made by AO and confirmed by the ld CIT(A) be directed to be deleted. ITA 505 /CHD/2022 A.Y. 2017-18 Page 5 of 8 7. Per contra, ld. Senior DR taken up through the findings of the AO as well as ld. CIT(A). It was submitted the assessee could not furnish any details and source of cash deposit made substantially during the two months period from 08.11.2016 to 31.12.2016 when during the other period, no such deposits were made either in cash or by cheque and further, no such comparison of such cash deposits made in earlier years had been furnished by the assessee, either before the AO or before the ld. CIT(A) and merely reiterating that cash deposits have been made to pay the vendors who refused to accept cash in old currency, the explanation so submitted cannot be held to be justified to explain the source of such cash deposits during demonetization period. It was, accordingly, submitted that there is no infirmity in the order so passed by the ld. CIT(A) NFAC Delhi and therefore, no interference is called for and the appeal so filed by the assessee be dismissed. 8. In her rejoinder, the ld AR submitted that in the earlier years as well, the donations have been received in cash and out of such cash receipts, the assessee has incurred the expenditure in cash and in support, ledger of cash in hand for the financial year ended 31.3.2015 was submitted. It was submitted that similar position exist for the financial year ended 31.3.2016 and the details thereof can be submitted where so desired. It was accordingly submitted that it is regular practice and custom ITA 505 /CHD/2022 A.Y. 2017-18 Page 6 of 8 where the devotees donation amount in cash which is duly accounted for in the books of accounts. 9. Heard the rival contentions and purused the material available on record. The limited issue under consideration relates to source of cash deposits in three bank accounts maintained by the assessee during the demonetization period in old currency. The factum that cash deposits have been made by the assessee and the said cash deposits have been made in the bank accounts opened, maintained and operated by the assessee is not in dispute. The onus is therefore on the assessee to explain the nature and source of such deposits so made in its bank accounts. The AO has given opportunity to the assessee from time to time, however, for reasons best known to the assessee, it chooses to remain silent and didn’t respond to the notices issued by the AO and carry out necessary compliance by way of filing return of income and provide necessary explanation resulting in best judgment assessment and the addition towards unexplained money in the hands of the assessee. The addition so made were challenged before the ld CIT(A) and submissions dated 03.01.2021 and application for filing additional evidence u/s Rule 46A dated 08.03.2022 was filed. The ld CIT(A) has taken cognizance of the submissions dated 03.01.2021, however, the application for additional evidence has apparently not been considered. During the course of hearing, the ld AR has drawn ITA 505 /CHD/2022 A.Y. 2017-18 Page 7 of 8 our reference to the application for additional evidence along with affidavit of the Secretary of the assessee explaining the nature and source of such deposits. Given that the assessment has been completed u/s 144, it is essential that such application for additional evidence and affidavit so filed be considered to determine the nature and source of cash deposit and the same is hereby admitted. Further, the ld CIT(A) has referred to lack of information in respect of cash deposits made during remaining period of the financial year (other than two months during which the impugned deposits were made) and in the earlier years. We find that no such information, though relevant, has been sought from the assessee by the ld CIT(A) and at the same time, the ld AR has submitted that where so permitted, the assessee shall furnish the same for necessary verification. Therefore, we find that in the facts and circumstances, the matter require fresh examination taking into consideration the additional evidence and affidavit filed by the assessee as well as examination of cash deposits made in the remaining period of the financial year and comparability thereof in earlier years in light of standard operating procedure framed by the CBDT for verification of deposits during the demonization period and it would be appropriate that the matter is set-aside to the file of the AO instead of ld CIT(A). We accordingly set-aside the matter to the file of the AO to examine the matter afresh and decide as per law ITA 505 /CHD/2022 A.Y. 2017-18 Page 8 of 8 after providing reasonable opportunity to the assessee. Needless to say, the assessee shall not abuse this opportunity and shall attend to the proceedings and submit necessary information/documentation as so advised and/or as requisitioned by the AO. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 18 th January, 2023. Sd/- (VIKRAM SINGH YADAV ) लेखा लेखालेखा लेखा सद瀡य सद瀡यसद瀡य सद瀡य/ Accountant Member “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. आयकर आयु猴 (अपील)/ The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar