SYED SHAIDA BANO, SRINAGAR V. INCOME TAX OFFICER WARD-1, SRINAGAR

ITA 60/ASR/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 5439 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-08-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tangible material; Reassessment proceedings; TDS; Set aside
• Section: 147; 69; 271(1)(c); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DAS GUPTA, JUDICIAL MEMBER I.T.A. Nos.59 & 60/Asr/2024 Assessment Year: 2011-12 Syed Shaida Bano, Opposite Classic Hospital Shah Anwar Colony Hyderpora, Srinagar. [PAN:AAMPJ3215C] (Appellant) Vs. ITO, Ward (1), Srinagar. (Respondent) Appellant by None (Written Submission) Respondent by Sh. Arvind Bansal, Sr. DR Date of Hearing 13.08.2024 Date of Pronouncement 21.08.2024 ORDER Per: Udayan Das Gupta, JM This appeal is presented by the assessee against the order of the Ld. CIT (A) NFAC, order dated 12/12/2023, passed u/s 250 of the Act 61, which has arisen out of the order of AO passed u/s 144/147 of the Act dated 28.12.2018 passed by ITO( 3(3), Srinagar. 2. The grounds of appeal taken by the assessee in form no. 36 is reproduced below: I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 2 “1. The Ld. CIT(A) erred by confirming assessment, when the same is bad in law, as no notice u / s 148 of the Act stands served on assesse. 2. The Ld. CIT(A) erred by confirming assessment, when the same is bad in law, as no notice of demand u / s 156 of the Act stands served on the assesse & the assessment is barred by limitation. 3. The Ld. CIT(A) erred by confirming assessment, when the same is bad in law, as the re-opening is purely based on AIR information rather on any tangible material. 4. The Ld. CIT(A) erred in both facts & laws by confirming addition of Rs. 1143250.00 u/s 69 without application of mind and in an arbitrary manner. 5. The Ld. CIT(A) erred in both facts & laws by confirming addition of Rs. 1143250.00 u/s 69 of the Act purely on CIB information available on AST, without examined the bank statement. 6. The Ld. CIT(A) erred in both facts & laws by confirming addition of Rs. 1143445.00 u/s 69 of the Act when the appellant made cash deposits from declared sources and CIT(A) rejected the evidences in an arbitrary manner. 7. The assessment is based on mere presumptions and conjectures. 8. Assesse craves right to add, alter or modify any grounds of appeal before or at the time of hearing of the appeal.” I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 3 3. The brief fact of the case is that the cash has been deposited by the assessee in her Jammu & Kashmir bank account amounting to Rs.11,43,445/- during F.Y. 2010-11. 3.1 No return of income has been filed and in absence of any return, reassessment proceedings has been initiated u/s 147 of the Act by issue of notice u/s 148 of the Act dated 27.03.2018. In absence of any response from the assessee at the assessment stage and in absence of any explanation or submissions from the assessee, the assessment has been completed on total income of Rs. 42,36,945/-. 4. The matter was carried in first appeal before the ld. CIT(A) where the assessee has challenged the service of notice u/s 148 and has also challenged the service of demand notice u/s 156 of the Act. 4.1 In course of appellate proceedings, it is seen that the assessee has submitted response on two occasions and has filed written submissions before the appellate authority. 4.2 It is seen from the first appellate order that the specific ground regarding service of notice u/s 148 has not been adjudicated by the first appellate authority as to how the said notice has been served, on the assessee, whether by post or by electronic mode or by affixation. It is simply mentioned that notices has been issued to the particular address which is the same address as stated by the assessee in his form no. 35. Therefore, he concluded that there cannot be any logical I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 4 explanation to the question of non receipt of the notice. However, the first appellate authority has allowed the appeal in part and has sustained the addition to the extent of Rs.11,43,445/-. 5. Now the assessee is before the Tribunal on various grounds contained in form no. 36. On this date of hearing, the assessee has filed an application for adjournment on the ground that the AO has not issued the copy of the recorded reasons and also the fact that the AO has not informed the assessee regarding the mode of service of notice u/s 148. 6. We find that the assessee has already submitted a paper book containing ten pages and he has also filed a written submission in support of his grounds of appeal containing eight grounds. 6.1 From the written submissions, it is seen that the main argument of the assessee is that no notice u/s 148 of the Act has been served and in absence of any statutory notice being served the reassessment proceedings u/s 148 would be considered in valid. In support of his contention, he has relied on the following judgment: “In support of above, the assessee takes support of following judicial pronouncements (i) Hon’ble Supreme Court in Y. Narayan Chetty vs. ITO (1959) 35 ITR 388 (SC); CIT vs. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC); azand CIT vs. Kurban Hussain I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 5 Ibrahimji Mithiborwala (1971) 82 ITR 821 (SC) has held that, the notice prescribed by section 148 cannot be regarded as a mere procedural requirement. It is only if the said notice is served on the assessee that the ITO would be justified in taking proceedings against the assessee. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the ITO would be illegal and void. (ii) Hon’ble Delhi High Court in case of CIT vs. Hotline International Pvt. Ltd. (296 ITR 0333) has held that in the absence of a valid service of notice u/s 148 on the assessee, the reassessment proceedings are bad in law. (iii)Hon’ble Delhi High Court in case of CIT (Central)-I vs. Chetan Gupta ITA No. 1891 /del/2012 dated 15.09.2015; 382 ITR 613 has held that no reassessment can take place without service of notice being affected on the assessee or his authorized representative. (iii) Hon’ble Punjab & Haryana High Court in case of CIT vs. Ceban India Ltd. ITA No. 85 of 2009, Jul 7, 2009 has held that in absence of notice being served, the AO had no jurisdiction to make assessment. The assessee approached the Income Tax Department /AO on 19/11/2019 to provide the copy of assessment order, which the AO provided on 25/11/2019, the copy of application made to AO to provide copy of assessment order form part of PB.” 7. Second issue raised by the assessee is that the entire reassessment proceedings has been commenced on the basis of AIR Information without any I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 6 tangible material on record. The contention of the assessee is that the AO does not have any material other than the AIR Information on which a reasonable man would come to the conclusion that any income chargeable to tax has escaped assessment. In this connection, he relied on the order of the jurisdictional ITAT, Amritsar Bench in the case of Ashwani Kumar Vs. ITO, ITA No. 129/Asr/2015 order dated 23.02.2016. The assessee further relied on the judgment of ITAT Ahmedabad Bench in the case of Dinesh Kumar Dalsangbhai Chaudhary Kankavati Society vs. ITO in ITA No. 452/Ahd/2019 order dated 14.06.2023, where it has been held that reassessment proceedings based merely on information of cash deposit is not tenable in law. 7.1 On merit of the case also, it has been submitted that the source of the cash deposited in bank has been explained in the written submission which are as follows: “The assesse a lady and teacher by profession working in J K govt and got retired during the year. The assessee during the year derived her income from salary/pension on which TDS was deducted and small income from Interest. The assessee during the year maintained following two bank accounts and no other Bank account was maintained and the sources of cash deposits made during the year in these bank accounts along with relevant documents submitted before CIT(A) are submitted below. I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 7 Bank Account No. 0345040100011846 maintained with J & K Bank Limited; - Si No Date of cash deposit Amount of cash deposit (Rs) Sources of cash deposit Supporting Documents 1 26/08/2010 49945.00 (deposited Rs 50000.00) Deposited out of previous withdrawals and saving out of family expenses Self-declaration by assessee 2 22/10/2010 393500.00 Sold her personnel gold ornaments to meet expenses of her daughter namely Saima Receipt of sale of Gold 3. 23/12/2010 500000.00 Sold two family vehicles to meet expenses of marriage, engagement and other functions in connection with marriage and post marriage events. Declaration from the said purchaser along with her ID card and copy of registration certificates of vehicles of her daughter (Dr. Saima Sajad) and husband (Sajad Hussain). 4 20/1/2011 200000.00 Sold her personnel gold ornaments to meet expenses of her daughter namely Saima Receipt of sale of Gold I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 8 Bank Account No. 0005040100038280 maintained with J & K Bank Limited 7.2 As such, the main contention of the assessee is that the reassessment proceedings initiated by the AO is not legally valid in absence of proper service of notice on the assessee and on the merits of the case, also, the cash deposit in bank account are explained to have come out of sale of gold ornaments and out of sale of two family vehicles as stated in the above paragraphs. 8. The ld. DR relied on the order of the ld. CIT(A) and has pointed out to the paper book page no. 10-11 where he has submitted that the documentary evidence of sale of old gold ornaments has been issued by one M/s J K Jewellers, Hari Singh High Street Srinagar. But both the documents issued by the buyer dated 19.10.2010 amounting to Rs.3,94,450/- and Rs.2 lac on 17.01.2011 are simply estimate slips issued by the said party and the documentary evidences does not contained serial numbers of purchased invoices and also does not state or mentioned the VAT No. of the gold dealer. 8.1 As such, the ld. DR argues that the authenticity of this invoices are unverified and cannot be accepted on its face value. 8.2 Regarding the source of deposit of Rs.5 lacs on 23.12.2010 it has been said to have come out of sales of two family vehicles are also supported by self- declaration without any confirmation from the motor vehicles authorities regarding I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 9 the transfer of vehicles. The declaration issued by the purchaser alongwith the ID card also need proper verification. As such, he prays that the addition of Rs.11,43,445/- on account of cash deposit in bank account may please be sustained. 9. We have heard the rival submission and consider the materials on record and we are of the opinion that the ld. CIT(A) has not adjudicated on the issue of service of notice u/s 148 specially when the same was a part of the grounds of appeal containing in form no. 35 and similarly, the first appellate authority has also not adjudicated on the issue of reopening of proceedings on the basis of AIR Information. 9.1 Apart from that, it is also seen that the documentary evidences regarding sale of gold jewellery has been filed in support of the contention that cash received on such sale has been deposited in the bank account. The verification and inquiry in respect of such fresh evidence should have been conducted and the said documentary evidences cannot be simply brushed aside without verification. 9.2 Similarly, also regarding the evidence in respect of sale of motor vehicles, should have been verified from the party before accepting or rejecting the evidence. As such, in the interest of justice, we set aside the matter to the file of the ld. CIT(A) to cause necessary verification and inquiry through the jurisdictional AO in respect the evidence that has been submitted with respect to the sale of gold I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 10 jewellery and ornament and the motor vehicles and thereafter to decide the issue on merits of the case based on such information or report furnished by the AO. Moreover, the specific ground taken by the assessee regarding service of notice u/s 148 and initiation of proceedings on the basis of AIR Information may also be adjudicated by the first appellate authority, after affording a reasonable opportunity of being heard to the assessee. The assessee is also directed to fully co-operate in the appeal proceedings by filing all necessary documents and evidence in support of its claim and in support of his arguments contained in ground of appeal before the first appellate authority. Penalty, ITA No. 60/Asr/2024 10. This appeal is filed by the assessee against the order of the ld. CIT(A) dated 12.12.2023 for A.Y. 2011-12 against sustaining of penalty Rs.11,55,748/- imposed by the AO u/s 271(1)(c) of the Act dated 17.06.2019. 11. This penalty is arising out of the quantum assessment order for the assessment year 2011-12, which was a matter of appeal before the first appellate authority. As per our order in ITA 59/Asr/2024, we have remanded the quantum appeal back to the ld. CIT(A) for fresh adjudication on merits. As such we find it proper and justifiable to remand this penalty also back to the ld. CIT(A) to be decided in consequence of the outcome of the quantum before him. Needless to I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 11 say, the assessee should get reasonable opportunity of hearing in set aside proceeding before the ld. CIT(A). 12. In the result, both the appeals of the assessee bearing ITA No. 59 & 60/Asr/2024 are allowed for statistical purposes. Order pronounced in the open court on 21.08.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DAS GUPTA) Accountant Member Judicial Member AKV 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 I.T.A. No.59 & 60/Asr/2024 Assessment Year: 2011-12 12