SMT.BALWINDER KAUR W/O SH.AJIT SINGH, JALANDHAR V. ASSISTANT COMMISSIONER OF INCOME TAX , NAKODAR

ITA 622/ASR/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5594 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 09-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Opportunity of being heard; Principle of natural justice; Additional evidence; Set aside
• Section: 147; 144

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. RAVISH SOOD, JUDICIAL MEMBER AND DR. M. L. MEENA, ACCOUNTANT MEMBER I.T.A. No. 622/Asr/2018 (Assessment Year: 2010-11) Smt Balwinder Kaur, W/o. Ajit Singh, VPO Chakpeer Pur, Nakodar, Jalandhar PAN: BQNPK0543G Vs. Asstt. Commissioner of Income Tax, (In situ), Nakodar (Appellant) (Respondent) Assessee by : Shri Ashray Sarna, CA Revenue by: Shri Trilochan Singh PS Khalsa, DR Date of Hearing 22/12/2021 Date of pronouncement 24/12/2021 O R D E R PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-2, Jalandhar, dated 17.10.2018, which in turn arises from the order passed by the A.O. u/s 147/144 of the Income Tax Act, 1961 (for short “the Act”), dated 30.11.2017 for Assessment Year 2010-11. The assessee has assailed the impugned order on the following grounds before us: “1. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 147/144 and that too without assuming jurisdiction as per law and without complying with the mandatory conditions u/s 147 to 151 as envisaged under the Income Tax Act, 1961. 2. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 10,87,000/- u/s 69/69A of the Act as income from undisclosed sources on account of cash deposited in bank without considering the submissions of the assessee and without observing the principles of natural justice. Page | 2 2. That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in passing the ex-parte order and that too without giving adequate opportunity of hearing. 3. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. Briefly stated, the case of the assessee was reopened by the AO on the basis of information available with the department that though the assessee had deposited cash amounting to Rs. 10,87,070/- in her saving bank account with Capital Local Area Bank, Shankar, during the year under consideration, however, she had not filed her return of income for the said year. 3. During the course of assessment proceedings, the AO called upon the assessee to put forth an explanation as regards the nature and source of the aforementioned cash deposit in her bank account. However, as the assessee failed to come forth with any explanation, therefore, the AO being left no other alternative was constrained to frame the assessment vide his order passed u/s 144 r.w.s 147 of the Act. On the basis of information gathered by the AO u/s 133(6) of the Act from the Capital Local Bank, Shankar, it was therein affirmed that the assessee had made cash deposit of Rs. 10,87,070/- in her bank account. As the assessee had failed to explain the nature and sources of the aforementioned cash deposit, therefore, the AO treated the same as her income from undisclosed sources within the meaning of Section 69/69A of the Act. Accordingly, the AO vide his order passed u/s 144/ 147 of the Act dated 30.11.2017 assessed the total income of the assessee at Rs. 10,87,440/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). In the course of appellate proceedings, it was submitted by the assessee, that she was an agriculturist and all the deposits in her bank account in question were sourced from the amounts which were received by her from her husband and father in law. For the sake of clarity the submissions of the assessee before the CIT(A) as regards the source of all the cash deposits in her bank account is culled out as under:- “4.1 The appellant has submitted as under:- This is the case of assessee, individual, belonging to an agriculturist family. Case of assessee was reopened u/s 147 of the Act, notice 148 of the act was issued for the reason that there was cash deposit amounting to Rs. 10,87,070 in the bank of account of the assessee. The assessment in the Page | 3 case of assessee was completed u/s 144 of the act due to which assessee could not explain the source of cash deposit in her account. Thus, the entire deposit in her account was considered as unexplained by the Ld. AO and assessment was framed against the assessee at the income of Rs. 10,87,440 and also penalty u/s 271 (1 )(c) of the Act was aggrieved by the order assessee preferred appeal before the worthy CIT(A)-II Jalandhar. Ground 2& 3 That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in making an addition of Rs. 10,87,000 u/a 69/69A of the Act on account of cash deposits in bank account from undisclosed sources and without observing the principles of natural justice. That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in passing the ex-parte order that too without giving adequate opportunity of hearing. In this regard it is submitted that assessee, individual, belong to an agriculturist family, having no source of income of her own. The deposits made in her account were on account of cash received from her husband and father in law received from time to time. Ld. AO has considered all the deposits made by the assessee as unaccounted receipts but has not considered the fact that assessee belongs to a pure agriculturist family having only agriculture income. Thus all the receipts are on account of agriculture sale proceeds which are exempt from tax. That assessee has made following deposits in her account: Amount Date of deposit Rs. 3,00,000 18.05.2009 Rs. 3,61,270 16.07.2009 Rs. 99,900 20.07.2009 Rs. 99,900 15.09.2009 Rs.80,000 20.11.2009 Rs. 25,000 21.11.2009 Rs. 1,21,000 21.01.2010 That as regard to deposit of Rs. 3,00,000 made in her account on 18.05.2009 was the amount received from her father in law Sh. Gurdev Singh who sold rural agriculture land on 20.06.2008 for Rs. 3,88,000 situated at Chak Vendal Tehsil Nakodar. Sir, father in law of the assessee sold this aforesaid land and gave the entire proceeds to his son and daughter in law. Assessee and her husband out of the total proceeds of rs. 3,88,000 deposited Rs. 3,00,000 in her account on 18.05.2009. A copy of registered deed of sale of agricultural land situated at Chak Vendal, tehsil Nakodar is enclosed herewith. Also a copy of affidavit from Sh. Gurdev Singh confirming the fact that he gave entire sale proceeds to his son and daughter in law are enclosed herewith. That as regard to deposit of Rs. 3,61,270 made in her account on 16.07.2009 was the amount received from her father in law who sold eucalyptus /popular trees grown on his agricultural land. Sir, father in law of the assessee had grown eucalyptus/popular trees on the boundary of his agricultural land which were ultimately sold by him in four phases/parts in June & July of 2009 to Surjit Kumar S/o Sh. Amrit lal and the amount was Page | 4 finally received on 15.07.2009 before execution of last phase i.e sale of last part of eucalyptus/popular trees on 16.07.2009, in presence of the Lambardar of VPO chakpeer Pura, tehsil Nakodar and this amount was deposited in the bank account on the very next day i.e 16.07.2009. A copy of affidavit of Sh. Gurdev Singh confirming the fact that he sold eucalyptus /popular tresss and the proceeds amounting to Rs. 3,61,270 received by him on 15.07.2009 on its sale were given by him to his son and daughter in law are enclosed herewith. A copy of registered transfer deed of the agriculture land by Sh. Gurdev Singh to his son dated 06.01.2010 substantiating the fact that father in law of assessee sh. Gurdev Singh had agriculture land in his name is enclosed herewith. A Copy of affidavit of Surjit Kumar S/o Sh. Amrit lal confirming the fact that he purchased eucalyptus /popular trees from Sh. Gurdev Singh S/o Sh. Kartar Singh r/o VPO Chakpeer Pura, Tehsil Nakodar for the consideration of Rs. 3,61,270 in which Nambardar of VPO chakpeer Pura/village Chak Vendal, tehsil Nakodar has signed as the witness is enclosed herewith. A copy of receipts of sale of eucalyptus /popular trees, are enclosed herewith. That as regards to the further deposits in the bank account it is stated that the all the further deposits made in her account are out of sale of agricultural proceeds by Sh. Gurdev Singh and out of the withdrawals made from the bank account. The copy of J Forms in the name of Sh. Gurdev Singh are enclosed herewith. A copy of Affidavit from Sh. Gurdev Singh confirming the fact that sale proceeds of agricultural produce was given by Sh. Gurdev Singh to his son and daughter in law is enclosed herewith. Further assessee has withdrawals amounting to rs. 30,000 and Rs. 20,000 on 12.10.2009 and 19.10.2009 respectively which together with sale proceeds of agricultural produce were deposited on 20.11.2009 and 14.12.2009 which together with sale proceeds of agricultural produce were deposited on 21.01.2010. Sir, assessment in the present case was made under section 144 of the Act due to which assessee could not explain the deposits in her bank account. It is humbly prayed that assessee may be granted an opportunity to explain the source of deposits in her bank account, in the interest of justice and as per Rule 46A (l)(b) of income tax rules which states as Under- Production of additional evidence before the (Deputy Commissioner (Appeals)(And Commissioner/Appeals)) the appellant has stated 46A(1) The appellant shall not be entitled to produce before the (Deputy Commissioner (Appeals)(or as the case may be the commissioner (Appeals ), any evidence whether oral or documentary other than the evidence produced by him during the course of proceedings before the AO ,except in the following circumstances, namely (a) where the (AO ) has refused to admit evidence which ought to have been admitted or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the (AO) (c) where the appellant was prevented by sufficient cause from producing before the AO any evidence which is relevant to any ground of appeal: or Page | 5 (d) where the (AO) has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. As the above stated evidence being filed now, go to the root of the matter, and are very essential for adjudication of appeal in an effective manner, it is humbly prayed that these evidences may kindly be taken on record to grant justice to the assessee. The appellant has further submitted as under:- In response to the remand report No. ITO/Nkd/18-19/1193 dated 13.09.2018, it is submitted that during the course of remand proceedings, in order to verify the evidence filed by assessee Ld. AO issued letter to assessee, but assessee did not turn up due to some unavoidable circumstances. Sir the assessee regret not articipating in the remand proceedings, it is therefore / requested that one more opportunity be provided to the assessee to produce the additional evidences filed by her. In view of the above circumstances one more opportunity be given to the assessee and the case be remanded back so that the additional evidences be corroborated and be not rejected.” 5. In order to substantiate her aforesaid claim that the cash deposits in her bank account were sourced from the amount which was received from her husband and father-in-law, the assessee had filed with the CIT(A) “additional evidence” in support thereof. The CIT(A) forwarded the “additional evidence” to the AO and called for a remand report. Vide his remand report, it was stated by the AO that though the assessee in the course of the remand proceedings was directed to produce certain specific information/documents, however, she had neither attended the office nor sought an adjournment. Backed by his aforesaid claim, it was stated by the AO that as the assessee had failed to substantiate the authenticity of the additional documents that were filed by her in the course of appellate proceedings, therefore, the same could not be verified. 6. After receiving the aforesaid ‘remand report’ of the AO, it was observed by the CIT(A) that as the assessee had not only failed to cooperate in the course of the original assessment proceedings, but had also adopted a same approach in the course of the remand proceedings, therefore, it could safely be concluded that she had failed to substantiate the authenticity of the additional evidence that was filed in the course of the appellate proceedings before him. On the basis of his aforesaid observations, the CIT(A), finding no infirmity in the view taken by the AO Page | 6 that the assessee had failed to put forth any explanation as regards the nature and source of the cash deposits in her bank account thus, upheld the addition made by him. 7. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. 8. At the very outset of the hearing of the appeal, it was submitted by the Ld. Authorised Representative (for short “the Ld AR”) for the assessee, that as the assessee being an aged lady had failed to compile the requisite details as were called for by AO in the course of remand proceeding, therefore, for the said reason she had failed to furnish the same in the course of the said proceedings. It was submitted by the Ld AR, that as the requisite details have now been obtained by the assessee, which she for the aforesaid reasons could not earlier furnish in the course of the remand proceedings, therefore, the same in all fairness considering the totality of the facts involved in the case be restored to the file of the AO. It was further stated by the Ld AR that as the assessee in the course of the remand proceeding would fully cooperate and comply with the directions of the AO. 9. Per contra, the Ld. Departmental Representative (for short ‘Ld DR”) submitted, that as the assessee had failed to avail the opportunity of substantiating the authenticity of the additional documentary evidence that was filed in the course of the proceeding before the CIT(A), therefore, he had rightly upheld the addition made by the AO and dismissed the appeal. 10. We have heard the Ld. Authorised Representatives for both the parties; perused the orders of the lower authorities and the material available on record. Admittedly, it is a matter of fact borne from the record that though the assessee in the course of the proceeding before CIT(A) had placed on record certain “additional evidence”, to substantiate her claim, that the amount of deposit in her bank account in question were sourced from the amount which was received by her from her husband and father in law, however, she had despite having been afforded sufficient opportunity had failed to comply with the directions of the AO in the course of the remand proceedings, as a result the authenticity of the additional evidence was filed by her with the CIT(A) could not be verified by the AO. At the first blush, it appears that as the assessee had adopted a lackadaisical approach not only in the course of the original assessment proceeding, but also in Page | 7 the remand proceedings, therefore, it could safely be concluded that she had adopted a non-cooperative attitude, pursuant whereto her claim as regards the source of the cash deposits in her bank account had remained unexplained. At the same time, we find substance in the claim of the Ld. AR that though the assessee, an aged lady, had placed on record additional documentary evidence in the course of the proceedings before the CIT(A), however, due to her old age she was unable to gather the requisite details as were called for by the AO in the course of the remand proceedings. Before us, it was submitted by the ld AR, that assessee had as on date gathered the requisite documents to substantiate her claim that the cash deposits in her bank accounts were sourced from the amounts which was received from her husband and father in law. In the backdrop of the aforesaid facts, we are of the considered view, that considering the totality of the facts involved in the case before us the matter in all fairness requires to be revisited by the AO, for the limited purpose of verification of the authenticity of the claim of the assessee as regards the source of the cash deposits in her bank account. Needless to say, the AO in the course of the set aside proceedings shall afford a reasonable opportunity of being heard to the assessee, who shall remain at liberty to substantiate her aforesaid claim on the basis of fresh documentary evidence. We, thus, in terms of our aforesaid observations restore the matter to the file of the AO, with a direction that the claim of the assessee as regards the source of the cash deposit be verified by him in the backdrop of her explanation and the supporting documentary evidence that would be filed by her before him. The Grounds of appeal Nos. 1 to 3 are allowed for statistical purposes in terms of our aforesaid observations. 11. Resultantly, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24/12/2021. - Sd/- Sd/- (Dr. M. L. Meena) (RAVISH SOOD) Accountant Member Judicial Member Dated: 24/12/2021 A K Keot Copy forwarded to Page | 8 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT TRUE COPY BY ORDER